Do you know why you are struggling

[Georginana]

I really hope this doesn't come across in the wrong way and people can understand I'm coming from a place of genuinely wanting to know.
Yesterday at work I mentioned about a holiday, someone told me I come across very out of touch.

Now I'm not well off by any means. I'm a GP receptionist, I only work 2 days a week (admittedly 10 hour days). We are mortgage free. My husband is a painted and decorator. He works for a company as he doesn't like the bookkeeping side and makes about £33,000 a year, I make £13000. We sold our family home for £220,000 2 years ago and bought a smaller home for £140,000. We live in a very cheap area, but the village we are in is lovely.

The only person who I any real understanding of the finances of is my son. He has 3 children, lives in a HA home. He makes £34,000 a year, his partner makes £10,000 and they get some benefits. They aren't struggling, they go on holidays, don't scrimp on food and their children are always dressed in new expensive clothes. However they have no debt and don't drink. I provide childcare on my 3 days I don't work.

This has me wondering, I know a lot of people are struggling but what is the biggest clincher? Is it rent? Mortgage rates going up? Fuel? Debt? Childcare? Living in an expensive area?

For example. I know a family it's 3 children who probably make similar to my son, but they always seem to be struggling to get by.

What's the biggest clincher for you if you feel you're struggling? I'm really trying to educate myself as I've never been out of touch before in my life!

AIBU to wonder whats the biggest financial pressures people are facing?

I struggled alot more when my children were smaller but i always made it work.
But now they have their own lifes i dont struggle as its just me now.

Exactly.
I don’t agree that she’s out of touch and I don’t get why someone would say that to her, unless she had said something insensitive to them.
She and her DH have worked for what they have, they live in a modest home, they are not high earners, they don’t have an extravagant lifestyle. There’s nothing “out of touch” about going on holiday. Millions of people do it every year, including people on very modest incomes.
Some people on the same income as OP and her husband would claim that they struggle, because their expectations are high. The fact that OP can have holidays and has paid off the mortgage doesn’t mean she’s massively privileged.

@Georginana I used to be better off but then rent went up, shopping went up, petrol went up and gas and electricity went up. Also spend a lot of money on tyres due to pot holes everywhere

Perhaps the family making similar money to your son are having to pay childcare for three children and that accounts for the significant hit on their income?

What i used to be able to buy in aldi for £35 is now £60. You do the math.

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I’d say at the moment two of our biggest spends is the food shop and fuel. It is never ending! We are a large family of 6 though so I’m aware our outgoings will probably be higher.

Mortgage around £900, nursery £600, debt for car £600... credit card debt £150, gas and electricity £200, council tax £140, water £90, that's all a month... food and entertainment around £500.. our issue we spend everything on the above and whenever something comes up like a boiler that needs fixing or our roof we have to go into credit.. both high earners with no family around to help with childcare or inheritance or anything like that

Both you and your son are lucky, financially.

You have clearly been able to benefit from times when housing was much cheaper to come by, cheap ineterest rates and rose a lot in value. This now makes you mortgage free, able to release a lot of equity when you downsized. You are also lucky you have a partner.

By contrast, all I could afford was a £160k doer-upper house at nowadays rates, which means decades of paying out more than you probably did for a better quality, larger house, on something basic that is falling apart everywhere, so has associated repair costs. I also don't have a partner to share bills with.

Your son, on the other hand, not only was lucky to have been able to get a HA house (something I was offered 3 months after being made homelsss as a pregnant woman, so I had to find dodgy accommodation elsewhere and was then bound by my rental contract at the time, so had to refuse), but also still have childcare provided for by you 3/5 days a week.

My childcare alone is a significant percentage of my outgoings. I have no family help. I will never inherit.

Therefore, my bills are much larger than both yours and your son's. It doesn't take much of a genius to work out just how lucky you are compared to many, many people out there, which is why some on here have reacted the way they do, because your post can come across as incredibly smug in the process.

I'm confused how on 43k income your son and parter gets UC? Social housing makes a huge difference too. In many places private rent is more than twice the amount of social housing. Your family are very fortunate.

We were okay a couple of years ago but have gradually been having to watch the pennies more and more. Thee last couple of months we have struggled. All the bills have gone up. Mortgage gone up by over £200. All the insurances (car, house, vet etc.) have gone up. Food costs gone up - now shop in Aldi and Lidl. Nursery costs have gone up. As a couple with one child in a fairly comfortable financial position a couple of years ago we are now keeping an eye on everything. This will be relieved quite a bit when our child starts school in September but until then we will have to be careful.

You make £13,000 as a GP Receptionist on 10 hours per week?

Interesting post.

It sounds like your DIL works about 16hrs a week on the days you provide childcare with a wage like that she would pay no tax or NI and still get her NI stamps from child benefit so essentially they would have just over 800pcm from that alone.

Your sons wage would bring in about 2.2k pcm so together that's 3kpcm

We earn slightly more than that. I work 3 days a week and pay for childcare for those days. Not having 'free' childcare is a big factor in not having more than 1 child for us. We try and put money aside for emergency situations and a holiday (eventually) we have had to cancel the last 2yr of holidays as can't justify the money.

So for us
Mortgage
Childcare
Putting aside for savings and emergencies

I buy 90% of my child's clothes second hand but do admit our grocery shopping could be less but that's another chapter!

20 hours - 2 10 hour days.

I've already mentioned this, one of their children is exempt from the 2 child rule so they claim child element for all 3.

How is your son getting UC at those wages, OP? Especially in a HA home. DH is on 30k and I'm on 15k, our mortgage goes up from £1100 to £1600 next month (3 bed terrace in SE) and we have 2 DC, one who doesn't get any funded nursery hours yet. But the benefits calculator says we're not entitled to any UC.
We don't go on holiday, everyone except DH (who needs to look half decent for work) only ever buys second hand clothes. We don't eat out or get takeaways. It's crippling.

As I've mentioned - all 3 children are eligible for the child element and I imagine having a mortgage means you aren't eligible for the housing element at all, while they still are.

For most people struggling the biggest factors are rent/mortgage driven by extortionate house price rises and the general cost of living. In the south west wages are fairly low but house prices are similar to many parts of the south east. The difference is in the south east people have access to London wages. If you are lucky enough to be able to get a ha property like your son then thats great but they are few and far between so many people are paying huge rents in the private market. Interest rates have gone up for mortgages and house prices have too.

I just used rough estimates by doing some quick maths but this is what it gave for my son's situation.

They also get the 85% help too. They have it made.

@Georginana i earn over double what you and your husband earn. I have equity exceeding 250k but still have a large mortgage. I struggle to get to the end of the month as school fees are 24k a year and mortgage is 900 a month.

However, I want to live in a big house and hope it will go up in value. I also want my dc to go to private school. I’m well aware that I’ve made expensive choices and that’s why I have to watch what I spend. If I downsized and stopped paying fees I could probably retire by 40! And I do think about it! I think you’ve actually been very sensible and made sure you can enjoy life - it goes to show that what you earn is never really the marker of what makes a good lifestyle, it’s how you’ve set up your life.

How did your son end up in a HA home? There's not a chance that we could get one in very similar circumstances. How do two people on a decent income get benefits and a HA home?

I agree with the sentiment of your post, but the math ain't mathing here.

Maybe you have some missing details, are very very young, have a high-earning partner also, or a load of pension/savings already, expect inheritance. Or perhaps there is some hyperbole in your post. But I'm not sure how a salary of even £150,000 could allow someone to retire at 40, even with £240,000 equity in your house, and without a large mortgage or private school fees.

Imagine you're 30 and you save £60,000 in a pension for 10 years, that isn't enough to live on for a family for the next 40-50 years, even with interest and 4% drawdown and no mortgage. I'm genuinely interested to learn more, as I'm interested in early retirement and maximising pension savings.

*I'm assuming you're in your late 20s- early 30s, and don't earn more than £150k because you didn't say you earn 3x their household salary.

His partner grew up in a council house, they continued living in that once her parent left. Once they had 3 children they were moved as they were classed as overcrowded.

We used to have about £700 disposable cash per month a few years ago which was enough for us to have a nice life and save for 1 holiday a year and be able to afford our dd's hobby.

But our mortgage has gone up by £250, electricity by £100, food about £100 a month not to mention all the insurances, oil, petrol etc. we now often find ourselves at the end of the month with nothing. Our dd is a teen so no more childcare etc, if that were the case we'd be minus each month.