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?

I feel the same as you OP and I think a lot of people will be. I do wonder if who is still buying Gail's and getting shoes from a shoe shop rather than the supermarket? We have a decent gaming income and cut these out at least a year ago. We looked at going to one of the historic royal palaces recently and it would have been £70 for all of us.

I also live in London and am surprised on a daily basis that anyone still lives here! Cheaper part of London maybe? We went from a "4 bed terrace for 1.5 million" type area to a nice bit of zone 4 where the same costs around 700k and the trains into town are very good. I don't have any advice that you've not thought of probably. Its nuts.

Would you consider night / weekend shifts to cut down on childcare? DH did nights, including weekends (not as a doctor though) and I worked standard office hours. This was 20 odd years ago, however it trimmed our childcare bills massively as DD was only in childcare about 20hrs per week but the only negative is that it reduces family time as we never spent any weekends together as a family (DH was either working or sleeping).

@PerditaLaChien thank you! Wow that’s a good salary and I can see why you moved out.

I am at consultant level. I honestly don’t know what I did wrong as I look at other consultants 10-20 years older. Nice houses in nice parts of London, kids were in private school, some have nannies to help.
No way could we even dream of having that lifestyle. Maybe they had family money/ brought a house at the right time.

I think money went way further in the past. Things were affordable. Simple things seems out of reach for us now.

Congratulations on your baby OP! That's a lovely but emotional time all on it's own. It's especially hard with financial pressures and a cold house, so be kind to yourself. Are there any free baby meet-ups locally you could get to when you feel physically ready?

These early years with children are tough financially!! Agree with you though that the mortgage, heating and food cost increases over the last two years have been eye-watering, more so than the years before. I'm extremely grateful my DC are at school now and not in nursery. Saying that, nursery is a good social place for them plus it helps build a strong immune system for the future! It also gives you head space to work (after your mat leave) and currently gives you time with the baby.

Someone up the thread gave some advice about insulation charities, that might help with the fuel costs? I think these are the years you have to hold your partners hand tight and hang in there together. The finances will improve once the children are in school and you both have good career prospects which is a major long-term positive.

It’s bloody tough. Some people will sneer because you obviously have high salaries but you have high outgoings too, some of which were hard to foresee and avoid.

If you can keep hanging on the nursery years will end and things will improve.

Is it absolutely essential to be in London - could your husband commute from a less expensive area? I know moving out is far from a magic bullet but it might be worth weighing up the pros and cons and seeing if you could have a better lifestyle in a cheaper area.

I have a friend who lives a nice life in London. He doesn't have kids and he and partner earn £100k between them. Kids are expensive, more people aren't having them nowadays.

It's insane isn't it?

We are both on around 75k each, one kid in nursery and one in school. London suburbs.

I've not had a holiday in literally years. I do a side business in the evenings to top up.

The thing to remember is that when nursery fees are done, you will be able to live better and also start socking hefty over payments into the mortgage to knock down the debt and interest you accrue.

Keep going, it will get better.

@PerditaLaChien thank you will look at the free options when the weather improves! Around me all these classes are full so I do wonder how people are affording this.

Those nursery years are the toughest. Add to that coming out of low fixed rate mortgages and rates having shot up it really does feel like you have taken a step back in life. We have been there and done that and are out the other side. Stay strong. Once nursery years are over it does get a bit easier.

Are there things that can go on hold for a while (eg. Pension contributions) that can pick back up again after nursery?

@dammit88 thank you - I have thought about moving away. Maybe to a a country with lower taxes. My SIL lives a tax free country and even though it’s expensive she has a much better quality of life. They can afford a nanny which gives them flexibility of work and a nicer life! Also weather is so nice! Not sure if it’s a case of grass is greener though. Maybe I should seriously look into it more.

https://www.moneysavingexpert.com/

Complete the budgeting spreadsheet on money saving expert, see where you can make savings. Look at cheaper swaps when monthly mobile/ utility deals come to an end. Shop in aldi/lidl and sell any old kids toys/clothes for the next stage up.

Make sure you get cash back for any online purchases. Consider a childminder or nanny instead of a nursery as they might work out more cost effective for 2 kids. Childminder worked out cheaper than a nursery when my two were younger.

https://stormwindows.co.uk/five-ways-to-make-a-period-home-warm-and-cosy/

This.
You need to move out of London.
Even abroad could be an option?
If you insist on staying you are accepting this is the cost and the lifestyle you can afford in the location you have chosen.
I'm sorry it's so tough.

I might have missed this but could you take a nursery break whilst you are on maternity leave? Then save the money you arent paying?

Also, not sure if this would work for a dr but I'm a nurse and when my kids were little I worked nights around my husband's work to cut down on childcare. Was tiring as I tended to do one shift after having the kids home with me, then a day in nursery whilst I slept then I'd do Friday, Saturday and sometimes Sunday nights, and stay awake on the Monday until dh got home and have an early night. Meant only forking out for one day nursery.

It is crap...a doctor and another full time working person should be able to afford a decent standard of living and treats such as coffee out, haircuts, maternity classes. It should feel that working is worth it and not just working to pay bills

Definitely! Right down to the freezing house. £2,000 increases in living costs is nightmarish. We are in a similar position with mortgage shooting up, nursery increasing, I was made redundant at the end of second maternity leave and jobs in my sector are thin on the ground – plus it’s so much harder when you have one kid in nursery, one in school, you’re used to a flexible job where you’ve paid your dues.

We have moved outside London though so it bites a little less. The pay-off for this is DP commutes, pickup and bedtime falls to me, and this impacts my work.

Re the freezing house, try that window film stuff you apply with a hairdryer to make tight. (Can’t think of the name!) It does cut draughts. Keep doors to rooms shut to create pockets of heat. Add thermal lining to curtains – you can buy ones that you just hook on, no sewing. Big thermal curtain over the front door. Close curtains before it gets dark and the temp drops. Big jumpers, silk thermals, hard-soled slippers for everyone. We’re all much toastier for these actions and a warm house makes all the other shite – budgeting down to the penny, no treats, work work work – feel less horrendous.

@WonderingWanda thank you - looked into moving out of London but it doesn’t work for us job wise, unfortunately. I don’t think it saves that much as you then need to pay for commute and picks ups and drop offs even more stressful.

@ExceededUsefulEconomicLife thanks for being tough- the thing is we could afford our house two years ago even with childcare.
It is the huge increase on everything that is making everything unaffordable. Dreaming about selling the house but we would not have much equity to buy another house and pay stamp duty costs and wouldn’t actually save that much to make it worthwhile. Scared to go into rented as prices seem to go up with houses and don’t want to be priced out.

Looked into au pair and it’s hard to get one since Brexit. Also our house is so cold that the energy bills would cost so much more that it would outweigh the cost of au pair.

How sbout getting a permanent job as a,consultant in London. Lots of the hospitals have nurseries attached and I think the fees are cheaper / subsidised for staff. That's what one of my friends did.

We're on just over £100k between us, 2 kids, and have a nice life in London- you definitely can do. But the key is housing costs- we were lucky to have bought a modest 3 bed terrace in an uncool location 11 years ago and didn't upsize, so the mortgage is very affordable (and the area is now much cooler...). For your mortgage to have gone up that much OP are you in a really bougie area?

One of the disadvantages of that as well is that everything else is more expensive- and there's a temptation to try and 'keep up' at fancy baby classes and cafes. Most of our friends earn similar as well so comparisons are limited, & no one earns 300k like a PP said was essential!

We have always done a lot of free stuff with the kids- it's one of the great things about London that museums etc run constant free events. Can you have a look at these instead of baby classes? If you turn up to the same thing every week you will meet people.

I think you've had some really good suggestions here but shifting to a cheaper area, and sitting tight until nursery fees start to drop are the main significant options. Has your DH properly explored compressing hours? Lots of men say they 'can't' when really they mean they don't want to ask/worry it might harm their career. Which of course women have always worried about.

It's no surprised that you could afford to go out and spend more 2.5 years ago - you weren't paying 2 lots of nursery fees and presumably weren't paying for the extra bedrooms.
You've chosen to live in THE most expensive city in the uk whilst having children on average salaries. Something has to give. I'd be looking at relocating as you can work anywhere and doctors are in demand. DH can commute in or get a new job.

Not all of London is expensive, it really depends on whether you're central or in zones 4/5/6. The outer boroughs of London gives you more affordable homes with a shorter commute time. This is more feasible than moving outside London to somewhere like St Albans. The train costs alone will wipe out any significant savings.

@Dreambow look at places like Sidcup, Bromley, Petts Wood, Chislehurst, Hither Green. These are all zones 4 - 6 in South East London with straight trains into several London termini such as London Bridge etc.

In house nurseries are also a good shout. You can usually salary sacrifice to pay for them which is super tax efficient.

How much equity do you have in your house? Could you potentially by a house outright in another part of the country?

I think you should consider a move and a move of jobs to local jobs. The salaries will be much lower, but your costs would significantly reduce.

A friend of mine gave up her clinical role in the NHS and now works at home for a regional ICB.

Good lord. Your lifestyle is really being affected here, you only get one life and personally I wouldn't want spend it worrying endlessly about Money. I'd be completely relocating somewhere much more out of the expensive south tbh.

You say you can't move because of the commute costs but is your dh's job only available in London? Gently, if really question that. There are large financial centres in Bristol, Manchester etc. Other cities have cheaper areas especially if your dh can tolerate a 30-45 min commute.
Does he earn as much as you? If your a consultant with most specialisms you might consider going back to the NHS and focusing on boosting your earnings by being full time/focusing on additional SPA's or picking up unsocial hours. Dh can then compress hours/drop a day and pick up the domestic stack?
Nursery years after the worst.. I didn't really have any expectations of having a decent lifestyle whilst I had young kids. It's expensive and knackering...

Something is very wrong in this country when a doctor and second professional worker are living like this . It's all very well saying oh yes London is expensive but unless London is to be filled with Oligarchs something needs to change . The economy is tanking , costs are surging and I have zero confidence in labour to improve anything .
Where are normal people on normal salaries supposed to have rewarding lives .