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?

Find a childminder - much cheaper than nursery and often more flexible.

I would sit down with your DH and have a go over your finances to see if moving or one or both of you going down to PT would actually make you better off

Following others’ nosiness I went and peeked at the house and old threads. I can see it’s a shock to go from “Devol kitchen or not?” and “six en-suites or a big bathroom?” to suddenly needing to absorb £2,000 a month in costs with nothing to show for it.

We’re also in a (more modest!) fixer-upper, with small children, and it is hell not being able to make a house a home while also working round the clock and it all going on mortgage and bills that didn’t exist a few years ago.

I don't agree with calls to move out of London – that brings its own set of lifestyle changes and problems. We’ve got a nice house and neighbourhood but the local swimming pool is closing and so are all the public toilets because of funding cuts! DP still commutes to London which comes at a financial cost and impacts on my ability to work. You’d swap one difficult situation for another. Whereas staying put, you just need to weather the nursery years.

I think it’s a choice between: weather the nursery years and when you emerge from them, make more budget-conscious choices with the house – a glammed-up Ikea kitchen instead of a keeping-up-with-the-Joneses Devol, so you’ve got money to stick in the rainy day fund for the next cost of living rise (because this shit is only going to bite harder as climate change impacts the world). Or, you sell up the mega reno double-fronted dream house and even with small equity and stamp duty, you’d easily find a suitable semi in London. You just have to let go of the idea that you’re Devol people. You could get a 4-bed Edwardian semi in Sydenham near the excellent park for £800k. If you choose to stay and weather the storm, stop trying to tackle the whole house – close off the top floor, use the hairdryer plastic stuff on the windows to improve insulation, blast the heating with impunity and get a lodger in to cope with the costs, accept that you’ll be working extra hours until nursery years are over – with the payoff of an amazing investment house that will only appreciate. Or sell up and get a still wonderful house that most people could only dream of.

I think a large part of this is grief and hormones and winter: you’ve got a small baby and it’s November, everything sucks, and you’re paying out £2k without anything to show for it. It might be a “rich person problem” which is why you’re getting some stick, but you’re allowed to be gutted that last year’s Devol dreams are now “fuck, I can’t turn the heating on, let alone think about Farrow & Balling the door”. But do consider whether you want to hunker down and be miserable in this big house that’s no longer a dream, or jump ship and enjoy your babies while they’re small by finding another dream house that’s still out of a lot of people’s leagues.

@nationalsausagefund I think that's exactly the case- as I said below I think there is a realisation that the master plan has turned out to be somewhat of a money pit that doesn't work with young kids. I blame all those 'look what we did' homes in the design and home mags whilst often failing to say that Jasmine inherited a million and they still have a moderate sized mortgage plus the money on top to 'do up'

I’m finding all the people saying that the OP should move out of London and either work elsewhere or commute in.

If a doctor cannot afford to live and work in London then God help us. London needs doctors

I don’t think that’s what they are saying. The OP’s or husband’s salary is well over £120k, plus the spousal salary. If the OP is on mat leave then it must be the husband as otherwise they would use the tax free childcare. The OP must be earning near that amount too, so you’re looking at £200k household income at least. It’s totally affordable to live in London on that salary. I have friends living in Z3, in 3/4 bed houses with 2-3 children on much less than that.

I think people are saying that they overstretched themselves and didn’t have any contingency for mortgage rate rises (something your mortgage company quizzes you about when you take out the mortgage!), and they can still live in London, but they just need to adjust their expectations and live to their means. For example a 4-bed townhouse in Highgate is lovely, but if you’ve no funds for holidays, treats, etc., you can move to a 3-bed in Wood Green with a similar commute and have some contingency and a bit more fun in your life than scrimping.

A doctor can afford to live in London. Just not necessarily in a 4 storey 6 bedroom house.

@Dreambow
thanks to the snoopers on here - I have seen the floor plans for your house 😅

lucky you!! That is not a “slightly nicer than3 bed semi house” 😅😅😅 it’s bloody massive !!!! and you have options for self contained units (our house is 5 bed 2000sq ft but does not have this flexibility at all!! )
our mortgage is prob about 300k less though

At 1000sqft per floor and 4 floors I would 💯 make a 2 bed self contained unit in the bottom and rent it out.
it already has kitchen and bathroom even if you need to throw a few o at it you’d make it back.

You’d get 1.5k pm or thereabouts in zone 3 with zero impact on family life.
ie you wouldn’t have to actually share any part of your home with a stranger

this seems like a no brainer even with tax it would pay all the bills and prob fund a small holiday annually

as a second cost reduction id look at a live in nanny.
you can offer acccomodation which would radically reduce childcare bill.

you need to leverage your assets.

have a think...
you could do it for 5 years or so then review

Yep. Op just needs to look at what they have and use it .g rent a floor out or realise equity. Op does not need to live in 6 beds house! She wants to. She knew it needed eg insulation and good heating. She has space for a nanny. Etcetc

What a joke of a thread. A six bedroom house in London is absolutely astronomical. I can’t believe she has the auacity to come on here and complain it is cold. Of course it is - unless you are a multi millionaire you won’t be able to afford to run a house of that size in central London on drs salaries! Or similar.

@Artistbythewater Thing is the OP has got options - the problem is I think they've backed themselves into a bit of a corner and probably are reluctant to admit it's not the dream they envisaged - a house is just a house - if it's the house I think it is it was pretty nice anyway , but probably not minty fresh - I would either be letting it out for a couple of years ( I think they would get enough to cover mortgage- just) and renting somewhere a bit more compact and a bit cheaper - maybe around £1000 a month cheaper or selling it and buying somewhere for £300.000 less to bring the mortgage down- in good nick and warm and cosy!! They don't have to move anywhere they see as crappy, just downgrade the house a bit.

Also if you can’t afford a coffee while you’ve still been on 90% maternity leave and likely enhanced leave anyway if you’re in a role earning well over 100k then how do you think you’re going to have 1.5k spare a month for nursery in however many months?
Either your issue is you don’t feel as well off as you thought you would by the time you earned X salary or you can’t actually afford to heat your home, buy the odd coffee or the occasional weekly £10 baby class. Two very different problems, if it’s the first I think everyone sympathises. Through a mixture of COL, kids and therefore essential expenses increasing I definitely have less spare cash for frivolities compared to when my wage was less than half it is now.
Or you’re in a 1.6M house not being able to “afford” to pay into a pension on a 150k+ salary or the occasional £4 a week coffee, in which case you really need to evaluate your lifestyle and choices.

I think it's a nightmare for everybody, and this government is just making it a whole lot worse! Ideology and resentment envy this government has only made me sad.

I lived through the 60's 70's and 80s that were bad, with power cuts, three day weeks, etc, but you could see a way out.

I saw this ideology we are now being dragged into without choice and no manifesto. In 1978, I went to Russia during the Cold War behind the iron curtain. I went there shortly before Kier Starmer went to Czechoslovakia. There were the ELITE who wanted for nothing, then the masses scratching around for an existence with almost nothing. They were living in fear of having an opinion or stepping out of line. This is his ideology Kier Starmers' government is heading for. He's going to destroy the uk by the time he is finished.

I actually don't see a way out for four years until the next election. By then, there will be so much damage we may never recover!

I feel sorry for my grandchildren and your children. What life will this be? We can only sweat it out!

This really OP. To be honest if you want to improve your lives you'll have to consider moving to a cheaper area.

You have massively overextended.

@Dreambow "his job is very London centric. When I looked at the numbers we could move to commuter areas but the cost is now similar to London plus unreliable costly trains in the mix".

It all depends on where your DH works. You'd be surprised by how much cheaper it is to live in, say, Kent or parts of Surrey such as Epsom; many places have excellent, reliable, fast trainlines. I know people who have successfully moved to both areas in the past few years.

Now that the Elizabeth Line is working there are far more other options too: Twyford to Farringdon just under an hour for example

I'm older and can absolutely see why you'd prefer to stay in London - that's what we did because of my DH's job in central London and his need to be near Heathrow for overseas travel. But it was always a real struggle as we earned less than you and lack of any nurseries in those days meant that I either paid for more expensive childcare or didn't work until the children were at full-time school. Today I think that we'd probably have moved further out.

Perhaps you could take a longer look at options for bearable commuting for your DH? Presumably you would still get a good salary in any large hospital so could avoid the commute yourself.

My DD and DIL had horrendous nursery costs, they just sucked it up because they knew that it wouldn't last forever.

The trouble is the op bought at the top. Things have changed dramatically and they now have a semi complete renovation project that is not ready to sell in a falling market. It's an issue of misjudgement. Many did the same in 1989 and suffered. One would have thought that two very intelligent people might have done a better risk analysis.

Hang on, you’re blaming OP’s predicament on the government that’s been in power for less than six months, but not on the last lot who merrily fucked us all for 14 years?

It isn't a government issue it's a cyclical issue. The market was long overdue an adjustment when the op bought.

I bought in 1981. Bottom of the marker.
Silly move in 1986 and broke even in 1993.

In 1993 bought a finished renovation when the builders went bankrupt. It was in an area under development and we took a risk. It came off. BUT it was finished because we were starting a family. I had a substantive job, DH was self employed. We had 50% equity and options if anything happened health or work wise. We had taken incremental steps and had headroom if two incomes dropped to one.

The op and dh made a choice. They now have to deal with the consequences and cut their cloth and/or their losses.

OP you bought an expensive do-er upper house a few years ago and have apparently spent a fortune doing it up, at the same time as starting a family. Your current problems are the result of those decisions and not COL. That is not to blame you, we all make decisions that turn out to be unwise.
You are in the short term 'massive child care costs' phase of your life, but it should get better in the long run.
Please don't let the financial crap or comparisons with consultant colleagues prevent you from enjoying baby no.2. You are a high earner and it will come good int he end.

It is tough op.

I am sorry things are really not looking like things will get cheaper anytime soon…

It is probably not something to lightly consider but could you get some help from your parents? Financially? Or his? Maybe they can spare a few each months to get you through?

If not, I am afraid it is just like everyone else and to wait out the dreadful nursery years… it gets better after these.

Good luck op 🌺

Do you need to rethink on a bigger scale? You will find work wherever you go. If you move somewhere cheaper your husband could take a lower paid job and/or retrain. There is absolutely no point living in London in misery if you could be happier living on less elsewhere.

Would a nanny work out cheaper than nursery fees for 2? This would leave you free to accept shifts at short notice and you might even be able to have an occasional night out. You said it's a large house would you have the room to accommodate another adult?

1. If you pay into your pension so that your take home is under 100k. This means you qualify for the funded childcare so both look at doing that.
2. Cancel nursery while you are on mat leave. Yes you might lose the place but you will probably be better off with a nanny anyway with 2 so save yourself 15k and spend more time with your toddler.
3. Husband look at other jobs. I work in the city and mostly wfh. This will also help with school runs etc.
4. Arrange your work to have fixed days, this reduces your waste spending money on childcare when you aren’t working.
5. Find things you and the kids enjoy which are free/low cost. Take picnics and have lovely days out and feel joy.

I still can’t get my head around you complaining about not being able to afford things with you being a doctor and your husband having a good job leaving you ineligible for the free nursery hours. COL is high everywhere not just London but other people manage to live on what they have coming in. My husband works for the NHS (band 2) and so did I (also band 2) until I was forced to give up work due to having to care for our grandson full time. We manage to pay all our bills, have date nights once a month AND pay for childcare (not eligible for 30’hours free as baby 10 months and 15 hours doesn’t kick in until January) on one FT salary, me working two days a week and a tiny top up from universal credit. Maybe think about downsizing if you can’t afford your mortgage and utility bills instead of complaining on here expecting sympathy