Exhausted with current situation - money issue

[Dreambow]

I don’t really know what to expect from this but please be kind.

We are a married couple both in professional jobs (doctor and DH works in the city - not a banker).
I have been contracting the last few years as NHS salary doesn’t cover enough outgoings.
We have a 2.5 year old and a 8 week old.

All we do is work work work. The cost of everything is eating up everything and we have several credit cards (interest free). We live frugally as we can but our outgoings are huge and have increased so much over the past two years. I am so worried that this is going to get worse over the next few years.

We have a large mortgage as live in London for DH work - since the rate of interest has gone up we are now paying £1200 per month extra. Still better off in the long run than rent and we are grateful for this.

Nursery fees were £1050 per month in Jan 2022 and now £1600 (£550 per month increase) for full time. This is for one child (not eligible for government help). Absolutely dreading when the second one starts nursery and when they go up again next year. This is for a cheap nursery - most are £2000 per month for one child full time.

On top of this energy bills and food bills all increased. We have a Victorian house and it’s freezing cold (apart from the ground floor which has underfloor heating). Currently 10 degrees in the house (not ground floor). No insulation (apart from loft) and heating bills are huge so try and turn off as much as possible but harder with children.

We never go out, no date nights (babysitter plus cost of going out would be too much. No coffees out, no meals out, no cinema. No holidays. Clothes from Vinted.

Our living costs have increased by around £2000 per month including increased mortgage £1200 month, increased nursery fees £550 month, energy and food bills etc

For the past two years I worked every weekend (apart from Christmas and Easter) and 2-4 days in the week. Some of my work is adhoc so unpredictable with childcare and have to put DC in nursery for full time.

I feel like we are working a lot harder but wages are not going up. Our outgoings have increased by £2000 month over the last two years but our lifestyles are much much worse.

We used to be able to go out for coffee/ meals/ cinema dates comfortably. We used to go on holiday a lot. We were able to buy high street clothes without thinking twice. House is currently freezing cold and on top of it all we also have a mouse problem (coming in from next door).

I know we are in a better position than some but I feel pretty down-beaten and exhausted with it all. I think inflation will back up again next year and I am not sure how we will financially and mentally manage it all.

To expect to have a better quality of life, working full time and working hard?

Give me a break.

I lived in London until well into my 20s and my adult daughter lives there now. Neither of us has ever experienced machete welding thugs or relentless noise at home.

Every big city has dangerous areas of course but that’s not representative of the whole of London. I’m sure OP lives in a nice area and there are plenty of those.

Have you looked into this, OP?
https://www.gov.uk/apply-great-british-insulation-scheme

@LivingLaVidaBabyShower this. When we brought this house we could afford it as mortgage and bills were cheaper. We probably could afford to whack up the heating etc. Now money is haemorrhaging left right and centre and we can’t keep up.
Most of the issues are COL.

Plus on top of this childcare fees. However before COL we could afford the childcare fees when they were £1050 - that was less than 2 years ago.

COL has increased by £2000 a month which is the bigger problem.

Like you we cannot move out of London without a change of career for my DH. He had built up his career and is reluctant to change it.

Some of our friends moved out (different sectors) and I agree it’s been detrimental when they have lost jobs as harder to get another one.

@TwigletsAndRadishes i don’t believe I am being defeatist but realistic. A 1.5 hr commute each way for my DH 5 days a week is 3 hrs a day. Yes it’s possible but he will never get to see his babies or be able to help and then it will all land on me and affect my career etc I think our quality of life would be worse.
With the rate house prices were going up we would struggle to move back into London if we need to. It might work for other people but it would not work for us (unless DH completely changed career)

@doodleschnoodle
As a PP pointed out you were able to do this because of government subsidies which childcare and child benefit which we are not entitled to. You did well with your mortgage rate! Very jealous!

Maybe you are right and we should take paycuts and keep under tax brackets to get the help we need!

@80smonster I don't disagree- when we lived in Copenhagen yes you were whooping tax but childcare payments were both very reasonable indeed and same for everyone-

I'm actually very social minded but I admit at the moment ( and this isn't something new by Labour- it was the same under the Tory's) we are disincentivising high earners, and not always individual high earners, families earning 100k plus pre tax combined - I can appreciate people in cheap parts of the country think this is huge but it really isn't when either rent or mortgage can easily be £40k a year for something relatively modest - plus nursery fees etc - and no not everyone can move to cheap areas fir all kinds of reasons ( which would no longer be cheap if there was massive demand) -

@EssentiallyItsTrue it’s crazy. Everytime I go to the shop it’s more expensive. Prices seem to be still jumping up.

@dutysuite that’s so tough. I really feel
for you. That’s a lot of interest. I hope it improves.

@scandiloving that’s a big move but sounds like it has paid off for you. Airbnb for your DH sounds tough though and I hope he finds a local job soon. I am definitely getting an insulated house when we move again!

@miniaturepixieonacid thank you -
I totally get it. It’s so crap. Working harder/ the same and being worse off. Standards in life dropping for a lot of people I think.

@Completelyjo thank you- you got lucky with your place but such a hefty mortgage increase. I hope it improves.

You can say what you like about wherever you are from, I don’t claim to be a UK expert. But as a Londoner of 44 years, London is a safe place, as safe as anywhere can be (backed by data and crime stats). We also remain the financial backer of UK in terms of taxes paid to HMRC. People who choose to be dismissive of hardworking Londoners are the same who will face issues if there was a mass exodus of tax payers, as they would see house price drops in less desirable areas of the UK and also taxes soar.
New York is my next favourite city in the world (after London), I’ve been there many, many times and have never ever felt unsafe, though I am sure this is area dependent. As for Dubai, the only people we know who’ve opted to move there have struggled to find work in more developed places.

I presume you don’t get the funded childcare due to one or both of you earning over £100k. If you only just tip over could you consider paying a bit extra into a private pension to put you back under the £100k mark. I was chatting to a friend about this a few weeks ago, he is also a NHS consultant. He has to pay £200 per month into a private pension and not pick up any extra shifts to put him back under the £100k threshold. Next year he will have 2 nursery aged children so will be saving over £2k per month in childcare with the funded hours and the 20% tax free element on the hours he needs to pay for.

I agree that decentivising high tax payers seems to be something that the Tories and Labour seem keen to do. Sadly, Labour has the edge, their inability to tax everyone to achieve robust public services will remain problematic, the government borrowing our way out of trouble won’t work since this unsettles inflation and will push up mortgage rates. The country is pretty much at breaking point and chasing off the last few who are highly educated, earn well and pay taxes isn’t the solution.

If the numbers allow, remortgage in the first instance and get on a cheaper rate.
Failing that downsize to outskirts, it's seems you have transferable skills..
Not sure why so many people are wedded to remaining in London when they just cannot afford it. You're just existing at the moment and cold with it, life is not a 'Working Title' movie..

@80smonster we won't agree on some aspects as I'm not a Tory but nor am I a radical lefty either. As you say though it is pointless disincentivising high earners as ironically these are the people that are more likely to have a fair degree of freedom of movement still - be it via careers, buying their way in or nomad visas on high freelance earnings.

@TheSecondMrsCampbellBlack thank you so much. So kind. I do wonder where did it go wrong. We were comfortable before covid despite earning a lot less then.

For some people moving out of london works but for us it would mean a
reduced quality of life. Longer commutes and less time with babies in the evening and morning.

Your increases are steep as well- it’s frustrating paying off more interest and not capital and not being better off. I am worried about the next few years.
I can see high prices coming next year due to the NI increases and NMW (although I do think wages should go up). I hope it all settles down in the new future but not sure it will.

@Epli I know how you feel. I think if you are lucky enough to be helped from the bank of mum and dad earlier you are more comfortable and steps ahead.

As a PP pointed out you were able to do this because of government subsidies which childcare and child benefit which we are not entitled to.

But those are not worth the £40k+ plus gap in our finances, not even close. One of you must be earning in excess of £100,000 to not be eligible for anything, and if it was only slightly over you would salary sacrifice back down to get access to some of those benefits like TFC, so presumably it's far enough over that the benefits don't outweigh the extra income you receive anyway.

Your problem is that you're pleading poverty while sitting in what must be an £800k-£1m+ freezing house with a mortgage of that size, earning six figures, apparently unable to afford to buy a coffee, go to a baby class, or heat your home adequately but say you couldn't possibly live elsewhere.

You've made that choice. We can argue all day about whether it's right or fair that you can't afford this particular lifestyle, but it doesn't change the fact that you can't.

You could buy a detached 4-bed house outright within 30-45 mins of a major city somewhere else for £350k. I refuse to believe your DH has no transferable skills to allow him to work anywhere other than London for a decent salary, which would give you a much nicer lifestyle. If his job doesn't allow you to live the lifestyle you want in the first place, then what's the point of grimly holding onto it?

You also have a child in nursery full time when you don't work full time in the first place and aren't working at all currently and won't be for some time. You could save money by cutting nursery hours and having your first DC at home with you for a couple of days and then increase again when you're back at work.?

If you do actually want to sort out finances, there's a lot you can look at doing! But if you don't want to make changes, then nothing will change.

I’m a centrist by nature and a Lib Dem voter, I don’t approve of the Tories or Labour. Those with multiple properties and high earnings are far more likely to have a degree of flexibility that those in middle income brackets simply don’t have. Those middle earners will be the same people who will have to accept the high taxes and house price falls as they do not have other options easily available. This brain drain was exacerbated by Brexit and the same issues continue to encourage high net worth families and individuals that their money, investments and lifestyle will fare better in other countries - and are able to rejig these arrangements depending on governments/taxes etc.

@Negroany - thank you. Will look at the lodger options during the spring - autumn months. I did think about it before but would feel so bad asking someone to leave autumn time but it might suit someone.

@Anyotherdude - thank you will have a look into it.

@doodleschnoodle you are totally missing the point. We could totally afford our lifestyle including nursery fees 2 years ago. Yes we have a large mortgage but we live in London and the prices are stupidly crazy here.

We made a decision to start a family etc however the main issue is increase in COL which has seemed to hit us from all angles. Of course costs increase over time but I am in shock that we are now paying £2000 extra per month in mortgage increase, increase in childcare, food, energy etc This £2000 per month is over the last two years. Our salaries are stagnant now. There are redundancies in my DH work place although I think he will hopefully be ok.

Our quality of life has gone down. I am just venting about it because it’s depressing.

I went back to work after 12 weeks after baby number one because of finances. I have had baby number two 8 weeks ago and spent the first 6 weeks recovering from a traumatic CS and post op complications. I would love to take baby one out of nursery but the waiting list is 18months to two years so then I would not be able to work. No places in childminders here either so it’s tricky.

Current rates for my nursery are £1600 a month so for two £3200. That is £38400 a year. That is the cheapest nursery. Most are £2000 per child. We earn over the threshold so on a 40% tax rate that’s lot of money we need to earn pre-tax to pay it.
The nursery rate will be hiked up again in a few months.
The nursery fee was 1050 less than two years ago for comparison.

Believe me my DH cannot undertake his career outside of London. Of course he could do something else but he would be starting again and he likes his job and has worked hard for it.

I am finding it depressing we are in this situation despite working hard we seem to be worse off.

all i do is work work work

and post multiple very long and detailed posts on mumsnet!

but I feel pretty down-beaten and exhausted with it all.

you started a very long Op at 01.30am
4 hours later you were back on it posting and then every hour of the day since then

Today you could have done something besides work but you chose to mumsnet for the entire day

almost 5 years ago you started a thread saying you were looking for a property in london with a budget for £1.6 million

5 years ago!

Did you miss the bit where she was probably up at 1:30am with an 8 week old?

I wanted to say a massive thank you to everyone for listening and for all the suggestions - they have been super helpful.

Will keep an eye on the post but difficult to reply to all the comments.

Really appreciate the kindness. I was scared to even vent on here as I was worried what people would say but most of you have been awfully kind and it’s put a smile on my face ❤️

I threw in the south east towel and went to live in Somerset. Everything here is half price, the countryside and beaches are amazing. I have no idea why I suffered in the soth east for so long.
My friends are moving here one by one.

So what, Miss Marple? It was obvious that OPs house was very expensive from her posts but again, so what? They haven't claimed to be poor and have been honest about having professional well paid jobs. They are just struggling temporarily as their mortgage rate has gone up significantly and nursery fees are extortionate.

@Gettingbysomehow well we live in Bath and clearly I have missed the beach - as has father in law shortly to move to Frome- are you near Weston super mare? If so wouldn't say beach is amazing however much I love Somerset !! Lots of south east folks here though - lots of lovely born and bred here's too, which I like

This is us. Should be okay as on a combined income of £65k in the north but we really aren’t.

My mortgage went up £400 due to interest rises. Every single bill has gone up, some by hundreds. Childcare went up. Petrol. Food astronomical.

Now workplace has cut all overtime due to the new budget. Such an awful place to be yet there’s people worse off so I feel guilty for complaining.

@Dreambow I'm afraid you won't get much sympathy the minute you mention £100k salaries and properties over a million- but it's all relative I know - all I will say is be honest with yourselves - if your mortgage is a killer then look at other options- if you want to stay in London then maybe look at a decent rental for a couple of years or if you insist on buying then start looking at more peripheral areas that are cheaper than where you are but quick commute in- places like Woking, Reading, Chelmsford - or London peripheries like carshalton, Bromley, Wanstead, Beckenham, Bexley , Enfield etc , none of these would kill your DH commute wise.he might like being as central as possible but at the expense of a freezing house and no spare money - it isn't worth it. He doesn't have to retrain- you both have to rethink type of home and location

It's clear you overstretched and yes as you say it's almost impossible to have predicted mortgages would rocket or childcare -so stress test it - check what it would be at 10% and maybe buy quite a bit under what you can realistically afford- the only problem I see (and which is why I suggested renting for a bit) is that your mortgage affordability will be way down with that level of childcare payments