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.

Oh here we go. Can’t get over our spite and envy so we drag a woman down with a misogynistic stereotype. How very extreme left.

I'm desperately searching for the 'get a lodger ' or 'take in some ironing' posts , but I can't see them!

OP, I may live in a small northern town, earn @ 15% of your annual wage, but I understand its all relative.

You've built a life based on your income, as we all do. Yes you could move to Carlisle or Grimsby and save some money, but I doubt your £175k a year job would exist there.

The cost of living crisis and Tory mortgage fuck up has affected us all. If you think high earners have pots of cash lying around, think again. The OP has proved this.

You're possibly lacking education in the widest sense if you are not aware of living costs in the south.

It was you who assumed the OP was living in a mansion (paying £2500 a month mortgage)?

New grads who are looking for a room in a house share pay over £1K a month in London.

You do seem a little out of touch with costs.

Not budgeting is a HUGE luxury!

The normal way to live is to watch your money and to account for everything mentally. You are getting hours of your week back by not doing that.

OP you are Ok and not doing anything wrong. Your joint salary is not huge for London. It doesn't go very far. You are investing in a property by buying a home, your kids are at peak childcare cost, you are paying into a pension.

You are doing everything right and will reap the rewards in the future.

If you want really good advice i would consider posting in money matters and putting your budget down so people can see and advise. You will get lots of advice there and if you are a high earner you don't get inverted snobs making unpleasant comments.

If you are able to manage i would keep going and wait for the children to start school. Grin and bear it until then. When the childcare bill drops i would divert as much of this money as you can into overpaying the mortgage and putting money into savings.

I didn't say she was living in a mansion. But I don't consider it to be "lacking education" that I choose not to live in the most expensive parts on the country when I can't afford it. That's just common sense.

@Alltheunreadbooks The mortgage crisis is more the Bank of England's reticence to raise interest rates over many years. This has been explained by economists many times (including yesterday by chief economist of the group Oxford Economics)

Interest rates are lowest historically for decades (ours was 15% at one time).

This allowed a lot of people to buy, which had a twofold outcome- low housing stock and a rise in property prices (supply and demand.)

And because some people bought when the interest rates were almost negative/ zero, they were caught out when mortgages rose. The banks have been irresponsible by allowing 5x income loans (it use to be 2.5 max and on one salary only) so some buyers are in trouble.

This is nothing to do with the Tories as the Bank of England is independent of government. They may be guilty of not building enough houses but the global situation around inflation as well (Ukraine, oil, food) and Covid are factors too.

It's a lack of education and understanding how much the cost of living differs and also to assume that whatever job she has can be found in Grimsby or where ever you are.

And she can afford to. She's not worrying about bills.

Do read carefully.

Thought you'd get a hard time on here but I do know what you mean. Husband and I on joint income of approx 200k. Obviously taxed high. 3k a month mortgage. Childcare now approx 1600 a month (only one in nursery now and the other in after school). I know we earn well and we do eat what we want / go on two holidays a year / save a bit but don't have loads spare at the end of the month. We're in London too but not as expensive an area as Islington. Will be better when both kids are in school (assuming not private). Living in London is just expensive!

Then he wasn’t talking about you

Have you heard of "commuting"? Live in a cheaper place near a train station, or get a car.

Let me guess though- she has one of those silly "PCP deals." Lol.

You are very out of touch if you think the price of commuting into London via train or car is either reliable or will save OP any money

What have Victorian times or the 1950s got to do with the fact that heavy industry provided jobs? Or that those jobs literally disappeared when the Tories decided said industries weren't needed? I'd have thought that was a no-brainer. The 'times' are irrelevant.

Competitive overwork and tiredness. How very constructive.

What a nasty post.

OP we are v similar. 5k childcare 2 children nanny (know a luxury) but NW London nursery for 2 under 3 will be same cost. We have no holidays, no meals out, Tesco deliveries. One family day out a month. We will be worse off under Labour who might take away the tiny NI drops we got from the current state. We pay for everyone else’s childcare. Colleagues part time are way more extravagant. This is how it is in the U.K. I try and enjoy the small things and remember that working full time is a privilege.

Of course anyone with a 2 or 3k mortgage who struggles to understand how "people manage" is going to be given a hard time.
Own that you've taken on a huge financial responsibility.

OP we are v similar. 5k childcare 2 children nanny (know a luxury) but NW London nursery for 2 under 3 will be same cost. When nanny tax added it’s a bit more than nursery but not much as tax so high. We have no holidays, no meals out, Tesco deliveries. One family day out a month. We will be worse off under Labour who might take away the tiny NI drops we got from the current state. We pay for everyone else’s childcare. Colleagues part time are way more extravagant. This is how it is in the U.K. I try and enjoy the small things and remember that working full time is a privilege.

Who on earth does that?!

@175allgone I totally get this. I earn less but live outside London.

Nobody can fathom that (far!) outside London a net pay of over 6k can be gone with little to nothing leftover.

I am regularly questioning the point of going to work!

With those figures there actually doesn't seem to be a lot left. However, the nursery years will be over very soon and you will have an extra £4000 a month which is considerably more than my total household income. You will have wrap around care to pay for but you will find that is not much and probably covered by any pay rises you have in the meantime.

If I were you I would probably borrow now to increase current disposable money, knowing I could easily pay it off as soon as the eldest child leaves nursery. Or you could put less into your pension for a year or two and then put extra in once you had your £4000 a month going spare.

You have lots of options because you have lots of money and there will always be options for you. It is not the crisis someone with no money to feed their children experiences. Everyone is not in the same boat.

And also, she is putting money into a house which is likely regarded as a financial asset rather than a place to live because our distorted economy views property as an "investment." I wonder how OP would manage on an average salary.

This is capped at circa 50k (the statutory pension). Employer pays 3% of circa 50k and so does the employee. Someone on 50k on the statutory pension scheme is paying the same as someone on 175k into their pension. And it’s definitely not 12k a year.

I feel like 2 kids in muswell hill in full time childcare was £3k a month a few years ago. But I do understand not wanting to move kids from a childcare if it’s caring and nurturing and your kids love it.

It's a perspective thing I think.
Set yourself a shopping budget as if you had minimum wage jobs. After a few weeks of budget loo roll, 25p pasta and walking round aldi with a calculator (normal life where I am) will make you appreciate that the money does actually buy you a good quality of life.
Other than that, like everyone else I'd look at your childcare options. Nanny/ nanny share or something.
We live paycheck to paycheck, bouncing bills. It is a little disheartening to think that if we had 6x the income we could still feel life was financially hard.