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.

Hi OP - really disappointed to read some of the bile and unpleasant replies here.
I’d suggest moving out of London, perhaps to somewhere like N Hampshire, where childcare costs are less expensive and you could commute in.

I’m going to assume you are at the nursery which has a single letter in its name, which examples the cost of childcare. There are cheaper places around.

We are in East London, our household income is less than your salary and we survive.

I think you need to reconsider childcare, look for a childminder or even a nanny share.

The £1k you have left after bills (and assuming your partner’s salary) should be enough?

Some people manage to live on £30K or less, and they simply live within their means. If you each took a career break (consecutively) for two years, you'd save about £200K. Great stealth boast though.

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.

wage stagnation is hugely overlooked. In the late 90s/early 00s I earned more than today’s minimum wage working in a shop.

Then you would just end up paying a fortune to commute instead.

Get an au pair? Or ask someone with a nanny to split the bills and take on your kids?

If you each took a career break (consecutively) for two years, you'd save about £200K

what?

No-one needs to live in Islington. It's one of the most expensive parts of London, one of the world's most expensive cities.
Having said that, once the kids are in school you will find your bills drop dramatically. I would just tighten your belts until then and count your lucky stars you're not living in poverty.

I'm in the Midlands but lived down south for years, your bills are the reason I moved tbh 💐 although 2.5k on mortgage where you are isn't bad imo

Not sure why you are posting if it's just for sympathy.

Yes, I get it.

You're losing 60% of your income to tax anyway.

Youre paying a HUGE amount in childcare £4K a month so you have to earn around £70K+ gross a year to cover that alone. That must cover more than one child unless it's a live-in nanny.

That's London life with a big mortgage, fares and childcare.

Most people end up living to their income. So, because you can afford it, you probably look at differently nurseries and think "1600, 1900, that's basically the same - I'll choose the nicer one". But if you had a harder budget, you would have to choose the cheaper one.

Same with property. 2.5k is a huge mortgage. Because you can afford it, you've made the decision "well, for an extra 700/800/900 per month we can get something bigger/closer to the station/nicer garden" etc etc, and it's quite possibly a wise financial move if you can afford it, because you'll spend less in moving costs over your lifetime, and it's probably a good financial investment. Takes money to make money, and all that.

And some (most?) of us don't have a budget for "extra curriculars"! This is a luxury that people choose to spend their extra income on.

Op I live in London as well and your situation is very similar to many people who pay mortgage in a good location and wraparound care for kids, so yes I do understand your situation very well. Are kids going to go to state schools?

Single parent on £175k or combined two salaries? If the latter what's the split on salaries?

How old are the children?

W have two salaries that are a bit under that combined and 2 kids and whilst it's not the opulent life I thought that kind of money would get us when I was younger we definitely can't complain.

Look at what you do have - pensions, savings, days out, holidays, take aways - then read some of the posts on the Cost of Living board and be thankful.

count your lucky stars you're not living in poverty.

Cant we aim a little higher?

Well quite. People keep taking about OP's enormous mortgage giving her an amazing lifestyle house but £2500 mortgage repayments is 25 year repayment on a £400k mortgage.

£500k (assuming she has £100k equity) buys a 1 bed flat in Islington. Or a small house in a very ordinary part of zone 4.

I'm assuming she has significantly more equity, built up during their pre-DC years. Hence not having saved up for childcare.

Not sure whether this is a real thread, but the points being brought up are very real. 2 professional-salary parents working in London get totally screwed over by taxes and high housing, childcare and commuting costs. It does make you wonder whether it's worth it.

But the economy is totally screwed if the part of the tax-base who pay for most of the country's costs decide to work less for a more relaxed life in a cheaper part of the country.

The top 10% of taxpayers paid 60% of all income tax last year, and the top 1% paid 30% of income tax.

Now admittedly some of that top 1% is going to be skewed by the crazy wealthy. But given that top 10% salary is £67k and top 2% salary is £100k, it's taxpayers in the OP's category (approx £80k each, in a couple with both parents working full time in professional jobs) who are paying 30% of the country's running costs (schools, hospitals, benefits, pensions etc). And who could move to a more relaxed job in an area of the country with low housing costs with no real reduction in disposable income after housing, a big improvement in time spent with kids, and the main difference being a much lower tax bill. The main downside is not having paid off an expensive house as an asset on retirement. But if your kids remain in the SE for work, you probably wouldn't want to cash in your equity at retirement anyway: you need to live somewhere, and won't want to move 200 miles away from your kids and possible grandkids. So that asset isn't doing you much good.

I agree OP that it's all a bit shit.

It's not the mortgage.

I know people in London who are paying that for rent for 2 bedroom flats.

It's your £4K a month for childcare.

Sadly, this is why many high earning professionals can't afford more than 1 child because childcare for 2 is too much unless family step in.

I know people living in North London with 2 kids and they each earn 6 figures so at least double what you're talking about.

I know it sounds a lot but if that's a joint income of someone on £100K and another on £75K, it's not a huge income for central London plus nursery.

Same with property. 2.5k is a huge mortgage. Because you can afford it, you've made the decision "well, for an extra 700/800/900 per month we can get something bigger/closer to the station/nicer garden" etc etc

It’s not a huge mortgage today & likely cheaper than renting. And it may not be big, have a garden, 2.5k doesn’t go far

Horses for courses, if you choose to live in an expensive area, and have expensive childcare you can burn through a hell of a lot of money on a monthly basis

Yes, I found this confusing too

@strawberrybubblegum exactly

People forget tax.

That income as a JOINT income is not great for central London or even the Home Counties although it may sound wonderful if you live in the north. Housing in commuter belts has shot up and a 'normal' 3 or 4 bed house near a station will cost £800K+. Cost of housing is a HUGE issue as is supply.

If you move out and commute, the train fares can be over £6K a year, then you need a car usually to get to the station, add on parking fees of another £3K a year.....

Shut up 🤣 what did you even want from this thread?

My friend earns £150k a year and her husband on £175k a year. Neither have children yet and they chose to live up north and commute once a week to their London jobs (the rest is WFH). I would recommend living up north in maybe the posh Cheshire bits (to feel more like London) and saving a fortune

That income as a JOINT income is not great for central London or even the Home Counties although it may sound wonderful if you live in the north

I think the income would be high statistically it’s just a lot of people don’t have the associated housing & childcare costs.

@175allgone Can you clear this up?

You say you live in SE London.

Then you said it was Islington.

Islington is N1.

So which is it?