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?

Hardly anyone can afford to live in London. What about all the teachers, nurses, police, social workers, etc? They all live outside and commute.

This is the most challenging time financially with young family and childcare fees. When I went through this OP, it was awful. All I could do was head down, work hard and get through it.
A quick coffee at lunchtime, hopefully with an entertaining colleague.
Planned date nights at home. Lights off, popcorn etc.
This too shall pass. When your lovely children hit school, then big school, things will gradually ease up.

Good luck.

To be fair being able to afford your bills and childcare for date nights while having your grandson isn’t remotely comparable to the OP’s situation.
As out of touch as she is for moaning that she can’t afford a coffee so are you for suggesting that the financial situation between a young family with less equity at the start of their mortgage is remotely similar to someone looking after their grandchildren.

I can afford all my bills but the reality is despite us both working FT with two children in nursery we cannot justify the £100 for a babysitter on top the cost of a meal so we certainly aren’t able to have regular date nights and certainly wouldn’t be able to do it on one of us working 2 days.

A few people have suggested the OP should rent her house out. The OP seems to be aware of this being not viable due to the tax implications but to explain to others...

The OP would need to do a self assessment for the income from letting her property.

To use some round figures to illustrate the tax due: imagine OP's mortgage is 4k each month and 2k is mortgage interest and 2k is reducing the capital owed. Imagine the house rented out for 4k each month covering the mortgage exactly.

The OP and her husband would need to pay 40% tax (as higher rate tax payers) on the 2k each month reducing her mortgage capital owing so that's £800 each month.

Then they would owe 20% tax on the mortgage interest paid (40% tax and then 20% credited back) so £400 each month.

= tax due of £1200 each month or £14,400 each year even if the rent only covered the mortgage. It would be slightly less after the deduction of insurance/gas safety check/maintenance from profit but still a hefty chunk of cash to find for someone struggling with cash flow and likely cancelling out any benefit of renting somewhere cheaper themselves.

we don’t just look after him, he lives with us full time and we have to pay for everything for him as his mom and dad don’t contribute at all. We don’t go out for food, just a couple of drinks and we’re lucky enough to have my MIL living round the corner and she will watch him the two hours we’re out for.

what I’m trying to get at is OP is complaining about not having any money when she’s a doctor who contracts out to the NHS and her husband earns a fairly decent wage for them to live in the house they do in London where prices are sky high and wages are more when there’s people who work FT out of London scraping by on food parcels because they can’t afford not to work because of the COL

We had kids who are now 18 and 20 and honestly even then the cost up to school age was unbelievable. So many mums stopped working for the 4-5 years and then found it hard to get back in. We both worked full time and in the end had a nanny for 2 of the years - which was insane with taxes too. Honestly though when the the first was at school and the second hit 2 we brought in an au pair and nursery for one and suddenly we were fine again. You potentially have 2 more years to go. You can do it x

@Winter2020 - thank you for explaining- I can see that's pointless- she either needs to flog it then and downgrade a bit - or use the basement for a live in nanny or rent the basement flat out

@Completelyjo yep I agree- but no one forced them to buy a 1.5 mill house- and have such a massive mortgage- I have every understanding as to why they might have wanted to buy in London and don't disagree with doing that - but back in 2020 when they bought they could have bought a perfectly nice 4 bed family home in many decent areas for £900k or so - they had a big deposit - nor why last year the OP was debating whether it was worth buying the £30k kitchen etc - the OP clearly has flash tastes without the millionaire bank account and it's bitten them on the arse - it's not jealousy by the way- I don't like the idea of the OP or her kids living in a cold house with no money to do even basic fun things- I think she needs to look sideways -

It’s tough and I really feel for you but everyone is squeezed, try and get out of London. Lots of places are commutable to London and you and your children will have a better quality of life.

Maybe it's time to consider a relocation for a better, more economically eased way of life? I know that sounds radical but there is no need to continue in such misery. Maybe the universe (and the cost of living) is giving you an opportunity to consider something different, more qualitative and affordable. I hate the fact that you're working so hard and seeing so little for your efforts. Sometimes an about turn can be perfect but you really do have to choose it. I wish you well with it in any case, concentrate on getting joy and time back into your life.

Move up north and role reverse. You work as a doctor, DH can get another job of some sort or be a stay at home dad and save on childcare - you could live well in the north east on just your consultant salary.

When do you plan to go back to work?

I know this might sound mad, but once you return, and assuming you'd be working regular days, would you consider taking your older child out of nursery and getting a nanny? Pretty sure that would be less costly than two sets of nursery fees.

Our COL has gone up a similar amount and it’s very stressful! We aren’t in London but doing anything enjoyable / going on holiday just seems out of the question. Getting the eldest to school came at the same time as the mortgage increase so every-time we think we’re getting a break we don’t!

I hope it gets better for you - I’d be keen to know if it does for a bit of hope.

Others might have mentioned the government warm home scheme if there’s anything in that for making the house more energy efficient without the monumental cost!

Journalist and hospital consultant here. Moved out of London to have our kids. But what nobody tells you is it will improve and quickly. Hang on in there. Childcare costs will fall fast. Both your salaries will rise. Lots of great job opportunities in London. House will increase in value faster than anywhere else in the country. Don’t compare yourself with other Londoners. That way madness lies.
You will look back on this time and wonder how you did it. But it all gets easier from here on in.

Vis a vis not being able to afford a coffee, 30 years ago there was no coffee culture. We invited mothers and their babies to our houses and made coffee and served biscuits. We took it in turns.

Nobody expected to spend money on shop bought take away coffees. Just saying. Similarly 30 years ago, we had a bottle of wine on a Friday night as a treat. We didn't expect date nights. We were just glad to have each other, a baby and a home in London. I was a banker at that time and we were lucky compared to many of my colleagues who weren't independently wealthy.

Our son is nearly 30. He and his wife have relocated to a nice Northern Town, admittedly for his job. Their quality if life there is better. I suspect they will be overseas within two years.

Our dd is 26 and teaching. Her bf is a professional and a trustafarian. I suspect they will be overseas within a couple of years.

Our DC are privileged. Neither have notions about six bedroom, 6 bathroom houses in London at this stage. And won't for many years, if ever.

My daughter is 32 now & I don’t recognise the picture you paint of 30 years ago.

I agree that coffee culture wasn’t such a thing but my husband and I certainly had date nights where we got a babysitter and went out for dinner/cinema/etc. I also met up with friends for meals & drinks out, if not coffees.

And we lived in London at first. I actually think it’s pointless so many people advising OP to move out of London when they have stated that’s not something they want to do due to partner’s job. Two highly paid professionals can afford to live in London and millions do. OP & their partner may want to downsize if things are that tight with their current outgoings but they don’t need to move away from the city they work in. They could downsize to a 4 bed house and still be better off.

I actually think “coffee culture” is a symptom of society and the housing situation though.
“We invited mothers and their babies to our houses”. Cool for you but many people have to start in flats these days or flat shares and live in them for way longer than they did 30 years ago.
30 years ago my parents had me in a semi detached 3 bed house with a large garden with low skill jobs after leaving school at 14, by contrast I went to uni and did a professional job as did my husband and we owned a 1 bedroom flat when we had our first baby. No space for hosting mothers and babies so it was pay a tenner for a baby class and another £4 for a coffee or have no opportunity to meet people.
In my 20s I lived in flat shares which was obviously worse for having friends over.

Life is so shit now for many you’ll get people saying think yourself lucky etc but a doctor and city worker should be able to live comfortably. Just try and hang on until nursery years are over. That will make a huge difference.

OP reading back over your earlier posts it seems like some of the decisions you made may have contributed to where you are now.

You mentioned making a significant profit from the sale of your first home and choosing to invest all of it into a renovation project—a "doer-upper" that was larger than your needs, with the expectation of selling it, down the line, for a substantial profit.

It also sounds like the costs of the renovation exceeded your expectations due to rising material costs. This, combined with the addition of two children and an economic downturn, has made things even harder.

The economy is always subject to cycles of growth and contraction, and the assumption that the good times would last indefinitely seems to have been a gamble that didn’t pay off for you.

Wow if you are struggling what hope is there for the rest of us. I mean that sincerely OP. I would seriously consider moving out of London, you can find work anywhere, could your partner commute or find a similar job elsewhere? You’re clearly working very hard you should be able to enjoy the odd date night or at least have a warm home.
Good luck, I hope you work something out so you can have some money to enjoy your life.

I agree, it's sadly nothing new though. Personally I think there should be housing set aside from certain professions, or something to make it accessible.

OP although life is pricey anywhere at the moment living in London is a huge factor. I'm not saying move away, but we live an hour from London and live somewhat comfortably in a nice area with brilliant transport links on less. It shouldn't be this way, as has been said in your roles you should be able to live comfortably enough, but sadly it's not going to get better anytime soon.

Can you move to a cheaper part of London ? A flat rather than a house? East/southeast/northeast London? A large new (newish) build flat will save massively on energy costs and flats are cheaper than houses.

I think some are missing the point - it isn't that OP can't live in London- it's that she can't live in a 6 bed house and spending money on renovations and that level of heating- I suspect this couple are on £200k a year or close- it's the choices here that are the issue- not the income or the COL - yes she thought they could manage it because they had a game plan but clearly it's too much -

Exactly. Op has many options as has a huge house four floors six bed . Invest in making one or two self contained apartment (s) rent out and voila. Income increases by 3k a month. No need to move.

Move to the North. Why fixate on London?; It is a killer.
Beautiful places to live don't have to be down south and your jobs can take you anywhere