175k salary and all gone

[175allgone]

This will ruffle some feathers, but after tax, mortgage , childcare, living expenses….there doesn’t seem much left. SE London, commuting, wrap around care. Whilst I appreciate I’m not having to watch my bills I’m hardly living an extravagant lifestyle.

And after all, it’s people like OP who Labour will be relying on the most if they get in at next GE, to pay for their policies.

Agreed, and saying "all gone" is deliberately misleading when there's £1K surplus each month, so that's £12K a year contingency funds that most people can only dream of.

Check your affluence OP! Read the room.

The Tories have literally been telling the ‘working poor’ and people on benefits to move to a cheaper area for a decade. It’s only when they say the same to people on 100k+ that those people suddenly feel affronted!

Cameron and Osborne’s bedroom tax meant that if you had a spare bedroom in your house you had to pay up or move to a smaller house which many were forced to do.

Many disabled people and cancer sufferers died unable to claim the dreaded pip they were entitled to.

You ask how others on the U.K. average salary of 30k manage to live?

Your solution; either downsize/move somewhere cheaper like others on lower incomes have done before you or accept that our country is broken and vote for a change.

We could improve the high cost of housing by stopping people from owning more than one property. No more holiday homes in Cornwall meaning local people can't afford to live in the towns they grew up in because half the town is sitting empty for half the year, no more properties "invested in" by foreign companies sitting empty in London meaning people can't afford to buy property there. Let's make it fair. Houses are for living in, so let's make it accessible to everyone.

I am assuming that there are two earners in your family (as you mention “we” and a joint account). How is the £175k split between the two of you?

If roughly equal (ie two lots of £87.5k) then you will get all the funded hours. When will they kick in and will they reduce your bill significantly? It can’t be long so probably worth hanging on until then.

If different but not too different (say £105k and £70k) then it is worth doing some sums about whether it is worth increasing the higher earners pension contributions to get their earnings below £100k and so mean that they get the funded hours and also their personal allowance back. Also worth noting that the lower earning is earning less per day than the childcare costs. So you would be better off if they were a SAHP. You probably don’t want to do that as it would damage / destroy a pretty decent (if not good enough to cover the cost of childcare 😱) career but reducing to 4 or 3 days a week would save you money. (And the tax system is such that their “earnings per day” will increase by reducing their number of days. It is a magic trick that I use to justify only working part time even though my youngest is now 11! 😂)

If very different (say £140k and £35k) then you would be a lot better off if the lower earners became a SAHP or dropped to part time.

Whatever you do - the situation you have is very temporary. Your kids will be in school soon and things will get cheaper. Wrap around and extra curricular activities are much much cheaper than nursery - even at high level. My eldest competes at the top end of national at a sport that involves expensive equipment. Cost is quite a few thousand a year but nowhere near £50k a year. And most kids don’t compete at that level.

Are you in SE London or Islington?

But she would probably be paying a lot more tax in the Scandi countries too.

@ExasperatedManager I always though scandi style taxing meant more tax on middle earners and not much change on higher earners?

Lots of people will overpay a fair whack into their pension as there are tax advantages.

OP, my partner and I together earn about the same amount as you do and we lead a very comfortable life. It's because we moved out of London. It's not just about being out of the capital with its increased costs or having a lower mortgage, it's about not being around (in my case) colleagues who spend money like water in the most expensive restaurants and shops in the world. There are plenty of decent places to go and things to do where I live but you literally cannot spend as much money here as you do without thinking in the capital.

My ex-DH was a similar person. He couldn't fathom how he earned £100k pa, yet had nothing in his bank account. He wanted holidays, new clothes weekly, eating out, taxis, festivals, subscriptions, hobbies, etc, because "he earned £100k and deserved it". But, we were paying for student loans, a mortgage, credit card bills, pensions, household bills, childcare.....

@Dibblydoodahdah your comment makes
No sense! The OP probably has very different mortgage circumstances to you. Just because you pay the same amount a month doesn't mean anything! The likelihood is, even if she moved to a different borough that was still on a tube line, to save costs she'd still save money! I lived in London for twenty years. Many, many people move area to get more for money etc! Islington is a very, very pricey area! Even if you live in a two bed flat, it would be worth £600k!

No confusion. I didn’t say you said it personally, l was referring to the government’s position on disability benefits. You asked why it should be ‘either, or’. This is why.

I think it is very interesting to see how it breaks down really quite depressing, being older now I had no idea of the cost of childcare and I can see why my daughter doesn’t want children. It isn’t just the financial aspect for her but it plays a part.

We do need people to pay tax and I think it is important to remember this. I hate how much the division in society that has been deliberately created comes into play time and time again and we are all turning on each other. A divided society like this is no good for anyone.

She likely wouldn’t in Sweden, however in here little world Sweden is likely very different considering Islington is in south east London.

Hi OP, sounds tough but at least childcare is temporary.

How does your remaining 1000 break down budget wise?

I also think that there's something about the assumptions we make about being rich and the lifestyle we should have. When I started out in my job 25 years ago, the people who'd been in it for 25 years lived in glorious townhouses in Islington and Hampstead or vast country piles, because they'd made those choices in the 60s-80s and money went further. These days people of my age who live in London are in Victorian semis or terraces in Clapham, Camberwell, Finchley, Hendon etc. These are now £1m houses, which was unthinkable when I was a kid. The window has shifted. £175K is a seriously good income but it doesn't buy you what it would have bought you twenty or forty years ago.

On those figures I think you are overspending. You don’t mention food or bills or cars etc.

I think you have to go through every single penny you spend

Put everything on a card for 1 month and then categorise everything. Look at yearly expenses for holidays and any other one off payments you make to see exactly what you spend

Obviously childcare (which I presume is nursery fees) will get a lot less the older your children get.

You were the one who said she must have an incredible house. Why did you say that? I merely pointed out what a £2500 per month mortgage payment gets you in many parts of the SE. I used to live in London so I am quite aware of the prices thanks.

Where we are (about 40 mins on public transport from Islington) wraparound for two primary school kids at our nearest school works out at c. £5k per YEAR - nowhere near the costs we had when they were in nursery. I also went part time until my oldest turned 3, as that was the best financial option. You just have to suck up the cost of childcare for now or look at alternatives to what you're doing currently.

OP I haven't read all the messages. But like lots of people, as they've been earning they've been spending more. But as it is now bothering you, I recommend you check out some UK podcasts about financial planning.
Maybe you need to ask yourself questions about - whether your bills are unnecessarily high? Do you waste a lot of groceries? Eating out a lot? I once had a spouse that spent crazy amounts of money and eventually I realised he was constantly skimming money from everywhere to support his bad habits. (not saying that's happening but it can be surprising to see where money is seeping out like a leaky faucet).

Start breaking it all down in a spreadsheet and see where you are spending money that's a waste.

32k in the SE 4 kids and a mortgage and travel costs.
child care costs reduce once everyone’s at school, breakfast clubs and after school clubs still needed but much cheaper than nursery fees!

They aren't asking for sympathy.

^ this. I keep hearing people saying “I’m just not sure I trust Labour/Starmer!” It beggars belief - like it’s a massive risk to vote them in - when the Conservatives have proved time and again over 14 years that they are not trustworthy.

@CarterBeatsTheDevil my parents were immigrants who bought in a cheap part of London which was a bit grubby (London wasn’t always like how it is now). Everyone in the street were pretty much immigrants with only one parent working & most had 2 plus dc. DH is from a then very rough part of East London, similar story one working parent in normal job eg teacher. To live in these areas now if just getting on the housing ladder you need serious money 175k won’t do it. It’s houses that were 50k or whatever now worth 1.8m

Except that she doesn’t mention food costs in her breakdown or things such as dental and optical costs. So it’s very unlikely that there is a £1k contingency per month.

I do have some sympathy for the OP.
I think it is the contrast between having what sounds like a huge income but actually it just demonstrates how little salaries have gone up compared to house prices and childcare fees. 20 years ago, when I started work in the City, all of those who were a decade or so older than me and having children either lived in places like Islington or Clapham or had moved out and bought huge houses and had a nanny. That just isn't viable any more. I'd be interested to know what the OP's house is like. I could be wrong but I imagine it's an apartment or a terrace rather than the sort of place some people are imagining.
I think this also shows how out of touch (understandably) a lot of people are with the cost of childcare. Suggesting a nanny would be cheaper than the £48k they are currently spending is unlikely given the hours a nanny would probably be working and the rates in London plus, whilst they will probably look after your children when they are ill, there is the lottery as to whether your nanny is a complete star or a bit of a shirker.
The real problem for the OP is that, for the area they live in, neither she nor her husband are actually earning that much. The advantage of Islington is its proximity to the City but they're not on City salaries.
In terms of what to do, though, the suggestions have all been made. You move or you put up with it.