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?

This. Hang on in there OP. I lived on a permanent overdraft for several years and had to work OT to keep it in 4 figures.. THINGS WILL GET BETTER

I'm not sure OP if as others say having a 4000sq ft house and numerous bedrooms and bugger all decent heating in parts makes sense if you can't afford to get by generally. I appreciate you thought you could , but situations change , childcare is expensive if you have 2 and having a freezing huge old house and never doing anything is no fun - and it's really not essential - stay in London or edge of if it suits ( and I understand why it would) but unless you want quite a few years of this level of tightness whilst you have young children I would just go for something more manageable and with better heating and maybe gain £1k a month back if not more !! It Doesn't mean you have to go and live in a dump !! I'm not quite sure why you are putting yourselves through this, is it because one of you or both of you gets your personal status from a huge house, was it done to impress family or something or does neither of you want to admit it's a money pit and a bit of a mistake ( it's not a criticism by the way , more trying to understand your motives) you can't do much about childcare costs if you both need to work, but you can do something about the size of the mortgage I would think.

Yes the cost of living is crap- but it's not helped by having an enormous draughty house in a decent bit of London- so I would think about what you can possibly change, not the stuff you can't - or that your H won't change.

4000 sq ft 6 bed property in london for a family of 4 purchased 5 years ago pre children…. just sell up

6 bed with 6 en-suites apparently!

Where in London is this 4000 sq foot, 6 bed, 6 bath Victorian House? Ours was short of that and we sold it in 2015 for £3.8m. There's overstretched and downright stupid if you have little equity, or is little equity just a million or two?

apparently it was a major renovation project from the bottom up

love the fact that a few months ago Op was starting thread about cost of professional landscaping
and fact that considering buying one of those eye watering Hully Pods

@RosesAndHellebores I do remember OP was looking in places like Forest Hill , Streatham etc - so I may be wrong but I think it's SE London- I can understand the temptation with these kinds of places- and probably long term would make money but it's not ideal without loads of back up funds and def not ideal with 2 small kids in the mix- I can understand the OPs frustration but I don't think this is all COL - I think a fair bit is pure biting off more than you can chew- but it is what it is and I myself have done things that didn't work out , so best I think to just look at ways of bringing your costs down if you don't have loads if back up cash, childcare is a tough one, the house is an easier one and no it doesn't mean they have to move to Milton Keynes etc or him give up his job unless they want that- just think it might make sense to trade down somewhat within London

oh and a cinema room!

Goodness if you can’t survive on a doctor’s salary then who on earth can?

You’re not doing anything wrong - the increases in cost of living are insane.

The only real suggestion I can make is would you consider relocating? As a doctor you can find work anywhere. I don’t know what your husband does, but even if he had to take a step down career wise you’d be so so much better off if you moved somewhere like Cardiff (you said family in Wales, not sure what part). You’d not earn much less, he could be in London in two hours by train, you could get a lovely suburban 3 bed near great school for under £400,000. Bring your mortage right down. There’s loads of professional “city” type jobs in Cardiff & Newport. Big employers in finance and insurance etc. I moved here from London as there was no way I’d get on the property ladder there, and I live the way of life here. Less crime, closer to sea, lots to do.

I'm also a bit confused by OP's previous threads. It sounds like pre-covid she and her husband bought a do-er upper/ex-HMO somewhere in south London, with the aim of selling up for a profit within five years. They did some amount of renovation including some major work to the basement (underpinning? cinema room?), which presumably were expensive and wiped out savings. And now the COL has made things much more difficult than expected. Is that accurate?

Sorry to snoop, OP, but some of this is actually relevant context, to explain how you found yourselves here. And you're probably a bit wiped out by having spent a year living in a building site, if I am reading this right.

TBH I would be minded, in spite of what you said above, to consider a lodger or two. I also wonder if, given that presumably the baby is in with you so you're only using two bedrooms of the six, move to one or two (lower) floors of the house, concentrate on heating just those few spaces, and perhaps get a heating engineer to facilitate that - eg the ground floor w/underfloor heating.

Interestingly one of your earlier threads mentioned Telegraph Hill - when you started posting about the impossibility of heating your house I assumed you were there! It's that classic thing of GIANT drafty houses where every bloody repair/renovation costs twice as much as it should, everything leaks or crumbles and the work that seemed just about in financial reach is now very much out of it. We moved out of Victorian when we upsized but many friends went from Victorian flats or terraced to bigger houses and several are comparable to you - young families, albeit often with deposits from families rather than flipping/upsizing, and suddenly they can't afford the fairly basic work they need to do up their doer uppers. I have been on playdates where the only heating for a seven bedroom house is one oil filled radiator in the living room because the whole heating system has conked out, or the kitchen ceiling has half collapsed, or the dining room is accessed via a conservatory built by nuns in the 1970s, or the original 1840 windows are still in because new windows have to fit a conservation standard decreed by a curmudeonly 75yo retired accountant and therefore cost £45,000 to upgrade. These are doctors, barristers, people running hedge funds etc.

Op I feel like you need to downsize and buy a cheaper house to reduce your mortgage fees..
Moving out of London may be an option as you could probably even live on one of your salaries in Wales for example!

I get it OP. I am not in your position exactly as our finances have got better this year as both our kids are now over 3 meaning our childcare bill has dropped significantly (from £800 per month for three days to £100 for the same, we are in Scotland). Our mortgage will rise next year though once our fixed term is up. 😭

It sounds like you have two choices. 1. Keep on swimming, try not to burn out and see the light at the end of the tunnel (the childcare costs will eventually come down even if nothing else eases). 2. Do something drastic like move to a cheaper part of the country and also move jobs, overhaul the whole situation.

We deliberately live a bit below our means e.g could have stretched ourselves to a house but purchased a flat instead with no intention of moving. We also moved to live closer to work (appreciate this not always possible for people). We are still two professionals who are wondering where the money goes though. It's crap.

So yeh down size or live on one floor rent out the other floors.
There are ways around if you have a massive house to make more money

Sorry I posted before I saw that your husband cannot work outside of London. I also think you should move to Scotland 😂

If you pay extra into pensions, could you get the government help with anything?

Or could you use an aupair instead of nursery?

Or condense husbands hours into 4 days, so you can save a day at nursery?

Perhaps air BnB a spare room in warmer months?

I think I just read that you hadn't heard of subsidised childcare? Sorry don't have time to read the whole thread, but if it hasn't been said, get yourself a government childcare account (I think you'd be eligible) which gives tax free childcare (up to £2000 gov contribution per year). Also in England (assuming your nursery does funded places) you should be able to claim 15 hours from age 2.

Good luck! We're not in London, so the numbers are all round lower, but feel the same. There is nothing left at the end of each month. Counting down the days to when our youngest turns 3 and gets their 30 hours funded.

I think I just read that you hadn't heard of subsidised childcare? Sorry don't have time to read the whole thread, but if it hasn't been said, get yourself a government childcare account (I think you'd be eligible) which gives tax free childcare (up to £2000 gov contribution per year). Also in England (assuming your nursery does funded places) you should be able to claim 15 hours from age 2.

@NettieHead the latter has an income cap of c,£100k, above which you only receive 15 hours at age 3, and I think the former is disapplied altogether at that earning level.

Yup - neither above £100k. And it’s applied badly, so two earners each on £99999 - fine; one earner on £100,001 one SAHM - nothing for you, soz. If you’re near the threshold you can fiddle with pensions etc to get under it but it sounds like that’s not where OP is.

Move to a surburban part of London. We are in zone 4. Close to the tube-Kings X in 25 mins

Get a substantive post and work this part time. Being a doctor in the NHS is hard. Find a role that works for you and affords you some protection. Pension/salary sacrifice schemes/maternity pay.

You may need to start with more PAs then drop these in time. DH is now doing NHS work 3 days/week. He started off doing 4.5 days As a consultant 8+ yrs ago.

Do private practice. If you are a consultant this is the best way to increase income. Your current situation is clearly not working and something has to change. GL

@Dreambow one of the targets of being educated and earning well is to be able yo afford choice. It sounds as though you feel you are stuck in your situation with no joy in life.
Life with young kids IS hard anf temporary. You have to decide if you can tough it out in your situation.

I don't understand why living outside London needs to mean a 1.5 hr commute. My DH can get to work quicker when we lived in Kent than West London and he finds the overground less draining than the underground.
I also don't understand why your commute is easier from London than from outside.

Have you thought if renting your place out and renting somewhere cheaper for a while? It doesn't necessarily need to mean an increase in commuting costs.

The subsidised childcare comment was in relation to me saying that some of the big nhs hospitals in London have associated nurseries.

Some offer a discount to staff and as the childcare is offered by your employer you are allowed to pay from your gross wages meaning a huge saving if you are in a higher tax band.

Honestly I think all childcare that is used for the sole purpose of having to work should be deductable from gross earnings. Otherwise its a massive disincentive to work (and therefore pay tax).

Years ago (when in a better paid job than now) I calculated that once I took into account the tax and childcare costs for several children I would be no better off working five days than four.

OP I’m curious to know what changed between buying your home almost 5 years ago with the plan of it being a 5 year house before moving out of London to now not being able to move out?

I get the impression the OP bought at the peak of the market in the COVID and post-COVID delirium, has maxed out on mortgage and maxed out on ambitious renovation plans at a time when builders could basically name their price and you'd have no choice but pay it. She's now feeling the pinch with mortgage rate increases she didn't anticipate or leave a contingency for. She's reluctant to sell at the moment as she won't see the huge profit that was all part of the master plan to allow them to move out of London with a massive wad of cash to put down on their forever home somewhere they can have chickens, an Aga, a Land Rover and a very small mortgage by the time they are in their early 40s.

But that's the property market for you. A giant game of snakes and ladders where timing and luck is everything. Those who don't need to sell at a bad time won't. They will bide their time and ride out any downturns. Those who have no choice but sell because they can't stay afloat will often end up losing money or just breaking even if they are lucky, but at least they are out of the doom loop and can sleep at night.

The OP and her husband are in a far, far better position than most. I get that she's feeling burnt out and frustrated and worried, but there is no magic solution that gives her everything she wants. An easier day to day life, more disposable income, being able to put the heating on and not worry, and hanging in there for the big fat profit on their doer-upper, which by the sounds of things they can't afford to finish, or it's finished but they can barely afford to live in it or heat it.

OP it's time to get real I'm afraid. If your current situation is not sustainable financially or mentally, you need to do something drastic to change it. Sell up and downsize (financially at least) for a better work/life balance and some peace of mind. Or, if you can grit your teeth and get through a few more years of hardship then it will hopefully all pay off. But it has to be one or the other. You can't have both.

@TwigletsAndRadishes yep I think you have nailed the situation-personally my view is it's just a house - and I wouldn't be having a shitty life just to fulfill some 'master plan'

It isn't totally the col in OPs case, it's partly poor decision making - why have 2 kids that close too if nursery costs are a huge issue -

I think the OP ( who I'm sure is a really nice person) bought into the you too can have it all- huge London house, great career, several kids without realising this is incredibly hard to do without a large wodge of spare cash in the background that isn't for a doer upper