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 agree that you should consider moving right away. Not trying to stay in reach of London but actually away. There are so many lovely areas outside of the SE with vibrant city living, culture etc but house prices will be nowhere near what they are in London. You're a consultant Dr and your husband is presumably well qualified. Regardless of why or how you've ended up in this situation this is choice: think big and make pro-active changes or stay and bemoan the CoL. You've got a lot of years yet of childcare costs. Do you really want to waste a decade living as you are now?

I think you need to crunch the numbers quite carefully with moves out. Public transport is loads more expensive, as are children's activities and sports clubs often. You may need to go from 0 to 2 cars.

We find all that stuff much cheaper in London than outside. If it works, then great, but you need to go quite far to get out of the leafy commuter belt which is also expensive and move your centre of gravity completely away from zones 1-6- as a Pp said places like Bromley might work better and mean no massive commute.

Mic always come in from next door :-), everyone with mice says that.

Would a nanny be cheaper than a nursery?

You can move out of London. Two professionals would get a job anywhere in the country. If you don't want to leave London then that's different.

by the sound of it, you are exceptionally high earners and well off. Funny how you rattled down all your outgoings but no word of money coming in. Meh, cry me a river.

Looks like housing is a big expense. If you cannot afford to live in London, then move. Most people cannot and therefore don't.

This is precisely why people are choosing to not have children, they are now unaffordable. My dd has said she is not even considering it, why put yourself through pregnancy and labour, feel exhausted every day and pay exorbitant fees to feel broken most of the time. The next generation are watching and want no part of it.

If the government would like future generations they are going to have to do far more to incentivise potential parents.

@Cloudyb yes I really don’t understand how Gail’s is so full and seems to be super popular! I don’t understand how other people are doing it. Wow £70 is steep for a day out.

We buy children’s shoes from Clark’s outlet online which is great and get anything for us in sales. The little independent shoe places are lovely but pricey!

I think you've really got to bite the bullet on the house, whether it is sell up and move, or insulate. 10 degrees is awful.

It sounds like there is no easy answer there, but you need to do something. Can you ask a surveyor or architect to do a report on it to start off with? It would be a first step towards making a constructive decision about what to do next.

The other option is to remortgage to extend your term - we've done 37 years term in the past during tough childcare years

Your current situation is making you miserable and doing nothing is not an option

You are very high earners so the problem isn’t really that you don’t earn enough. The problem is that you can’t really afford the house you own. I imagine it is very big and very expensive.

You would be able to afford it without the nursery fees so in some ways this problem would go away in time if you can manage to make it work for a few more hard years. Or you could discuss moving to a cheaper, smaller house that you can afford to properly heat alongside paying extortionate nursery fees.

You could move to an highly insulated new build? My friend doesn’t even need to use her heating. Period homes are draughty. We have one too. It sounds like it is unaffordable for you to comfortably live there with two very young children. Time to move,

Is this a sort of pity post? Buying shoes from the Clarks outlet instead of going to an independent store?
What point are you trying to make exactly?

Given how young your baby is, did you not work out whether you could afford a second child? You would have a far more comfortable existence with just one child. You are lucky to have so much cultural free entertainment on your doorstep. The arts etc. you don’t actually need cinema money. That needs consideration.

It seems that you can’t afford your house. It’s shit, it really is, but you have to face it.

You either continue to live like this until things improve, or you sell house and move to a cheaper property in a cheaper area of London.

You should be more than comfortable with your professions and the effort you have made, so I do sympathise. I hope things improve soon.

@PeriPeriMam thank you. Yes it’s totally nuts.
Thank you - we have looked at downsizing but not much equity so difficult to make it worthwhile with stamp duty.

Could you rent out your home at ridiculous London prices, and rent elsewhere in the country at less ridiculous price, perhaps near family, for the childcare years?

@Sheepsandcows are you aware of how unpleasant you are coming across?

Clearly you think higher than average earners can't possibly have money worries, but you are wrong. Higher earners with high outgoings can end up with the same in their pocket as lower earners with lower outgoings - and that's the point.

Anyone whose house is ten degrees and they can't afford to heat it is struggling. The numbers are irrelevant.

The chip on your shoulder seems very heavy, maybe take it off.

Might a childminder be a better option than a nursery.

I think the bottom line for professional couples today @Dreambow is where it was for professional couples 30 years ago EXCEPT 30 years ago we were where you are now if we dropped an income to stay at home, ie, one working parent.

When DS was born, we had upsized (zone 2), DH had to work in London (his bar didn't exist outside London), I had a City job (banking) albeit was burnt out in my mid 30s. With me working, and I'd miraculously wangled part-time in 1995 when we went back to work when babies were 4 months old, things were comfy. Then bang! The baby got bronchiolitis, then pneumonia, then diagnosed with asthma and ear infections started. I had given up work by the time he was one.

At that time, DH was early career and fees were slow coming in. Christmas 1995 DS got a 2.99 Mr Man Book for his birthday and a 3.99 Alphabet book for Christmas, DH got a Mars Bar and Ingot a bath bomb (we still exchange those). Shortly after Christmas I had to stretch about £17 over ten days. Then thankfully a wadge of fees came in. That first year was unspeakably brass tacks tight. I could stretch to a mini milk on the way home from the park that first summer.

But the fees started coming regularly and went up and it passed and DS got better. Interest rates went up and down in those years. Had the worst happened, we'd have had to move 10 miles out and we'd have had to suck it up on a non negotiable basis.

Have you actually done a spreadsheet with all your outgoings and incoming, budgeted across 12 months? That may be helpful.

I suspect you have over extended yourself with a house and you wanted a nice looking Victorian one. You don't need a Victorian house or to stay right in London. Where I am in SE London you can get snug sixties town houses for £600k, less if you move out a zone further.

We are fairly well paid professionals and chose to remain in a flat rather than move out further.

That said plenty of people commute in to the city from the outer suburbs or further - I work near the city with people who come in from Kent, Herts, Surrey and further.

People with high incomes, unlike people with low incomes, can sort it by making lifestyle choices. And by the sound of it, OP cannot afford the expensive home in London. It's really that simple. There is no chip in my shoulder. I find it really distasteful when people with high incomes who live beyond their means make such pity poor me posts There is a lot of real poverty and deprivation in this country. The OP isn't one of those.

If you have investigated the possibility of a lodger then you must have a spare room. You could advertise that room for storage for extra £'s. I've just let out my two garages and was surprised at the demand. If you undercut the normal priced storage units then you should receive some customers.

(I used Gumtree to advertise, had to change my house insurance to include it and will declare the proceeds on my tax return).

Do you LOVE London? If not, why live there. It’s sounds as though you don’t have time to do anything or see anyone anyway.

I live in a 6 bedroom house in a nice (considered £££) part of Yorkshire. It was £550, my mortgage is £1600 (will go up to about 2k) We don’t really commute. My 3 year old goes to the preschool at local nursery which we can walk to. You’d have so much money and time free compared to what you are doing now.

I would really assess what you are getting out of living where you are. My husband and I are both financial services and never really had an issue getting roles. Few require much time in the office anymore.

OP the fact that you are not eligible for childcare benefits and have a victorian house in London tells me that you and DH are on high salaries relative to most other people and probably have more options than most. I get that living in London is pricey but at least you (unlike others) have the option of down sizing or moving to a cheaper area to release some money. We lived in London and had to move quite far out to be able to afford cost of living - it’s crap especially if you like an area but ultimately what’s more important where you live or how you live? In the interim whilst kids are in nursery would renting your place out and then renting somewhere cheaper to live be an option? After moving out of London completely DH and I were able to go down to 4 day weeks. Miss London but 100% best thing we did. I expect you are on much higher salaries than us so you might even be able to afford a bowyer work life balance staying in London but a cheaper area….

The people in Gail's bakery either have much lower housing costs than you (due to buying when houses are cheap or bank of mum and dad), no significant childcare costs, or have very high salaries.

The cost of living in London has hugely increased since your older colleagues bought nice houses and had a nanny.

Things you could do

• move away from London to a different city. What industry is your DH in? If his career is London centric, do the sums REALLY add up for staying in London for his job? Rather than him working in a different field in an area with much lower housing costs
• cold Victorian houses need deep pockets. Consider selling and buying a soulless well insulated modern house. I know stamp duty will swallow some of your equity which is annoying. However once you are in the new house you can start paying down the mortgage and enjoy lower heating costs and be warm. Your current house will slowly deteriorate at ten degrees, it's not good for the windows and walls to be that cold for long

If you have space for a lodger, if must mean you have a four bedroom Victorian house in central London. Of course that is going to be cripplingly expensive op!

My sympathy OP - its getting worse under Labour, I know….