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.

Woe is you...

I assume you haaaaate living in Islington, completely regret both kids, despise your house and general lifestyle...

No?

You have huge outgoings, and a lifestyle to match, which you presumably enjoy. That is the price of that lifestyle.

Don't like it - don't do it, move, leave, live somewhere else, do something else.

Don't bloody moan about it though, these are all a result of choices you made somewhere along the line.

Private school after nursery?

4k for wrap around childcare for 2 sounds atrocious even for London. that's 48k a year! you might find it cheaper to have an aupair? especially if you consider school holidays

DH and I earn a similar amount, about £200k. We only have one DC so our childcare costs are only £2200. The answer for where our money goes is pensions. How much are you putting in? I forget we’re contributing so much (20% of income) and sometimes wonder where the F all the money is going. I don’t think most people, even those on high salaries do.

And people have too much debt. My neighbors earn only a little bit more than us but just bought a £70k car, constantly buying new furniture, going out to eat at nice restaurants etc. it’s possible that they have secret money from somewhere 🤷‍♀️. But one of them told me if one of them lost their job it would be catastrophic so it’s more likely that they’re over stretched and at best living close to pay check to pay check.

@175allgone
SE London zone 4, 2 nursery age DC
Take home pay - £10.5k (household)
Mortgage 2.1k
Childcare 1.5k DC1
Childcare 2k DC2
Fixed bills - 1655
= 7155
1000 into additional pension
250 commuting
600 card repayments
500 food
= 9505

Plenty left over to do stuff....eat out, day trips, savings, renovation etc

You're just in a v expensive part of London....

OK?

You know full well that it's the childcare that is the killer and once that's gone you'll have £4k extra every month.

Most people I know wait 3 or 4 years between having children nowadays so they only have one set of nursery fees at a time.

Should add, I also (now) account for the yearly additional tax bill courtesy HMRC so that's another 400 each month into savings ringfenced for that.

Why are so many people so nasty when someone earns more than them?

people are blinded when the see 175k

but to busy sticking the knife in to realise
you'll pay
71k deductions
9k pension
leaving you 95k take home in your hand
48k child care
30k mortgage
leaving 17k a year to live on which is comparable to someone on benefits

would it be cheaper to employ a full time nanny instead of nursery

Get rid of the kids? 😉

I suspect you make a lot of tiny spending decisions because of that large salary. Of course I can take a foreign holiday, eat out, get takeaway, get a taxi… because I earn 175k!

But the fact is currently you are spending too much while you have that huge bill to service, AND living in one of the most expensive parts of the U.K.

I suggest you sit down and work out a budget (You Need A Budget is excellent) and stick to it. And make peace with it - it’s short-term.

Spiteful and nasty response
People seem to forget that there are MANY expensive areas and it has to be occupied by someone. Other reasons include work too.
Op I'm also in an expensive area, in fact you would need 200-250k minimum to live where I am. A decent rental is 5k minimum.
You are also allowed to feel that its tough now...just not on here.

£600 card payments? Listen to Matin Lewis and get rid of credit card debt. The interest is a financial drain.

Might you be better off with a nanny than nurseries or will one be in frrr hours soon?

or get an au pair (or a couple of au pairs) to live in, although that can be hit and miss. Use school wrap around care rather then a nanny.

childcare costs are a temporary expense but will finish at some point

work from home some days

Temporarily elongate mortgage period as last resort.

Move as the very very last resort if desperate.

There’s no magic solution - your mortgage payments aren’t huge relative to your salary. The childcare costs are a killer. I guess the issue might be that they are replaced by school fees when the kids go to school?

your answer about how ‘everyone else’ manages; well I guess they earn more money than you. you earn decent money but not really in London terms. Me and my OH earned 300k between us (with a bigger mortgage admittedly) but didn’t feel like we were rolling in it either.

Or compress hours at work if possible

We’re on a bit less (~£135k) in south London, but childcare is a kicker and we also feel quite stretched. I’m not wanting to wish this time away, but I’m treating it in my head like a loan repayment, e.g. X months until it reduces, Y until it is all done. I also worry about money in a way I feel we shouldn’t given our income, but it’s a very expensive season of life, and we are in the lucky position of being able to cut back until we’re on the other side.

I read Ramit Sethi’s book ‘I Will Teach You To Be Rich’ — rubbish title, IMO, but so helpful. You’re spending a huge proportion of your taken home pay on fixed costs. This is why you feel broke. The key is to either reduce this category, or accept it’s a season, and plan for how you can use that money — savings? Investments? Holidays? When the costs reduce. Ideally you’d be able to do a bit of both.

The food shop is a key target, also subscriptions and if you can cycle this will enormously reduce any commuting costs, it also makes for a great free family activity at the weekends, but I appreciate it’s not for everyone. (Same for camping holidays 😂)

BTW if your kids are nursery age, you’ll still see a huge saving even after wraparound care and activities. Breakfast club, holiday clubs, swimming, football, coding club, and Cubs for my eldest all adds up to only 20% of my youngest nursery fees. I’m mindful of what we add to our fixed costs (thank you Ramit) so we shop around even for clubs. We’re also very tactical with our holiday days to reduce holiday club costs.

Yes it is the childcare - mine are older and have a bigger age gap (DD was in nursery with free 15 hours when DS was born) once they are in school wrap around care will be cheaper

anotjer thing is age - we bought our house 13 years ago so the amount we owe on the mortgage is less than if you bought now

Choices choices.
£115k household income, no kids, £500 a month mortgage, £40 a week on commuting (£20 train twice a week). We relocated to an area we aren't from or familiar with to achieve this, plus have refurbished 3 homes in the last 15 years to gain equity. We're very comfortable.
Make some changes OP. Sell up and downsize, relocate, get a lodger, get a job closer to home to cut commuting costs, cycle to work.

It is a today problem but not a tomorrow one. You have to wait op.

you can remortgage when rates go down…you won’t have chilcare cost forever if you don’t want to (amid choosing private etc)…

if hou really struggle, diminish your pension pot. I should think that your 2,5K mortgage house can be downsized later on if you need more cash.

It is a little bit of a none problem. You should consult your financial advisor.

😆

2.5k isn’t a particularly big mortgage & the OP must have serous equity if moving will cost 50k in stamp duty. That’s the approx cost for a house worth 1.1m.

It’s the childcare which even by London standards is ridiculous, would a nanny be cheaper?

Childcare costs will finish at some point but do you to pay school fees?

But I agree 1k a month isn’t a lot leftover.

School fees are a choice, nursery not so much.