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.

I live in Islington. Our joint income is half yours. I had to work part time to reduce childcare costs. If working in city could you cycle instead of using transport? We also had a smart meter and water installed which reduced both significantly.

A major difference is we rent, we will never be able to afford even a basic flat in this area or most of London. So will have to move out to buy. So you are lucky that money is going to an asset. And depending on age, childcare will dip as they get older.

A full time nanny in London costs around £60K plus employer NICs and pension contributions and obviously they take 4+ weeks annual leave and sick pay.

Yeah, I live in an unfashionable part of SE zone 4 and we’d still be paying more than 2k a month if we had to renew our (currently pre-Truss rate) mortgage on our 3-bed today. You’d need a big chunk of equity to be below that number at the moment. Presumably OP has that if they are only paying £2.5k in Islington on a current-rates mortgage, but in this particular scenario I’d probably ride out the nursery fees (which wouldn’t be much less at all here!) and stay put tbh.

@Matronic6 if you take on the OPs childcare you'll be able to save to buy somewhere in no time 🤣

Double your income in one fell swoop.

Because they hardly live an extravagant life apparently...

It’s a great salary OP but where you live is very expensive so instead of being the big fish in a small pond you are now in a lake surrounded by much bigger fish instead.

You know the childcare costs are the killer here. Kids are expensive (but I’m glad to know how much you spend as I’m going to tell my DH I save him £4k a month on childcare 😅) However, this is only temporary and you will feel super rich as soon as they go to school.

You just need to get some perspective. Your mortgage is on an expensive property in a desirable location. It’s likely to continue to go up in value with inflation and eventually you will be sitting on a sizeable asset that most people could only dream of. Your childcare bills (and even wrap around care) will eventually reduce to nothing and you will have a great pension. In the meantime, you are able to feed, clothe and pay all the household bills just on one salary which is an insane achievement in itself! You should be very proud and there’s lots to be grateful for.

I don’t understand how you jump from Islington to an area where you’ll cause gentrification.

there are loads of lovely areas in london In between.

This is why most people move out when they have kids.

It's an insane salary and you know it. Is this one salary? Are you a single mum? If you live with the children's dad then why isn't he at the very least paying paying half the childcare costs? Why are you paying for everything? Could he be a SAHD or one of you work part time?

The answer is that a lot don't. They get into debt. Or they buy absolutely nothing that's not essential.

They don't get to choose where they live, they live where costs less, even if its a less desirable area or its further away from work, family etc.

They work opposite shifts if they have a partner, compressed hours, go part time or give up work entirely even if they don't want to, to save money on childcare. They don't choose their preferred nursery but a cheaper childminder or informal care by relatives.

Your high income has freed you from all of this.

For you a nanny might be cheaper but possibly not as a nanny salary, plus employers NI and pension contribution could well be around the same or even more than the £48k pa that you pay now.

Providing you don't have any more DC this is the worst time for you and when they start school, presumably you'll only need wrap around care and your bill will drop substantially?

Your high income might also mean that you'll actually pay off your student loans if you have them, meaning another drop in living costs. People on lower incomes often pay more because they keep paying a lot longer even if its a lower amount each month.

The thing is op, you live in a decent house, good area, great childcare and it costs. Others manage by buying the best they can afford. You've got the best and it costs a lot.

Interesting you live in Islington where 3 schools have closed/are closing. There are far fewer people living in the Borough with kids as it is unaffordable.
We used to live in London and moved out as we couldn't afford 2 kids there and couldn't afford a house only a flat. The people I know who live in London with kids often live in flats in cheaper areas than Islington or they were given very big deposits/whole houses through family money. I live in a town of people who used to live in London.

A lot of people I work with pay similar prices for childcare if they live in the city or even outside of it. At that salary, your hours expectations are high. Your work expects you to be available when they want you available and a nanny presents a single point of failure people don’t want to risk.

I don’t make as much as OP, but the point of static fixed expenses in London being high is true. We lived in New York previously and it’s just acknowledged that until your children are five and in school you save little.

If we end up staying in the UK, we’re moving out of the city because it’s just far too expensive long-term.

But they won't only be paying £150 pm into their pension. Even if its the most basic type the contribution is well over £1k pm when counting employer and employee contributions and tax relief.

Reckon you might want a lift nip over to Money saving Expert. They'll be able to offer some excellent tips and advice on how to eke out £175k a year.

£175k after tax is £8711 after tax and NI with NO pension deductions so the OP may not have a massive pension! It’s the tax and NI that impact the take home pay. They will be paying around £70k in tax and NI.

And? 🤷🏻

is this after food bills as well

I feel that the lack of awareness is astounding.

It is and it isn’t. Childcare costs are exorbitant and it’s a way to effectively push women out of the workforce at all economic levels.

That childcare bill is insane. What is the kind of nursery they go to, some sort of private elite mega ultra fancy one, to be charging that kind of insanity?

This. You don't HAVE to live in an expensive house, you don't HAVE to have kids, but you do and you have so it is what it is.

I live 40 miles from London in a rural area and all the nurseries charge £1400-£1500 per month for a full time place so it’s not a suprise to see that they would be 25% more in central London.

Doubt it. That’s standard London pricing in certain areas. One near me charges 2200 for under 2. We didn’t select that one. It was also utterly basic.

A range of 1600-2200 for standard nursery (8-6 with meals) is pretty standard in central London.

A mixture of both I guess. We bought relatively late in life and had saved for many years to build up as large a deposit as possible (25%). Bought it as a 3 bed, then saved for a few more years so we could add a bedroom. Interest rate is currently fixed from before the Truss disaster, but when we have to renew we may well have to pay just over £2k a month.