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 don't get why you can't move out of London. Your job is very portable. Whatever your husband does it will be possible to do it somewhere else in the UK.

I think these are the crunch years really (speaking as another person with young kids in London who sees ££££ flying out the door each month.

Your eldest will presumably be eligible for 15 (not 30) free hours the term after they turn 3. Not very near but in a year max that will be a few hundred pounds less in outgoings at least. Does the nursery offer a sibling discount?

What would a childminder cost for two, as opposed to a nursery?

Any room for manoeuvre on the mortgage? Extend the term by a few years? Has the value of it increased so that the LTV would shift in your favour when you next remortgage?

A friend’s spouse was a GP and picked up extra remote work for an online private GP service, fairly flexibly - would something like this be feasible for you?

Lifestyle creep. Once it happens, it's very hard to see how you can make cutbacks.

We earn a lot less than i imagine you do, have two kids, and don't really worry about money overly. We can afford nice days out, nice clothes, we run two cars, have holidays. But we don't live in London, we live in a house that hasn't overstretched us so have a modest mortgage, heating bills are low as we chose a newer home, that sort of thing. You want a particular lifestyle in a particular place and this is the price of it. There's places we can't afford to live, so we don't live there (we don't particularly want to live in those places but even if we did, we wouldn't be able to).

I'm not suggesting it's right that stuff should cost so much, but while cost of living crisis is obviously a thing, where you choose to live and the lifestyle you have matters to and you're got the salaries and job prospects to be able to choose. There are lots of cheaper cities to live in, cheaper homes to choose. But it's about priorities: not many of us can have it all, we have to make compromises somewhere.

Hi OP, don't be hard on yourself, your house is annoying right now because of the weather I bet. Those wacky victorians didn't bother with building regulations! On the plus side I bet your house is larger than others at that price point and more elegant.
My cousin stayed in the lovely village at home we were brought up in in Cambridgeshire, I do envy them their cost of living but if you can't move your family out you can't. This period of your life will end and the children will age out of needing so much paid for care.
In terms of the mortgage rate it was something we couldn't really predict but you could extend the period of your mortgage I expect, then shorten it later when the pressure has eased. Mortgage lengths are a cultural thing not economic, as I discovered when I visited Japan.
And I know what you mean about other people spending money! I booked some tickets at the opera recently for an Xmas present and you would have thought I was trying to get a Golden Ticket for the chocolate factory! I would raise the prices of those tickets if I was running the ENO. This is a joke, please don't if you read this and you are actually running the ENO.

Anothrr thing - reducing eldest’s nursery hours by a day for now?

I feel sorry for young people now-and can quite understand why many are just not having children. Nursery fees are crippling you even though you have high income jobs along with paying silly money for your mortgage due to hugely inflated house prices. You’ve had good advice on here-it will get better. But it is possible to commute into London by train-don’t dismiss it as undoable. Are you in an expensive area? Is it really impossible to move?

Massive sympathies. Childcare costs crippled me and that was 10 years ago before COL.
What helped me was an interest only mortgage. Much hated for good reason but I was able to just pay the interest when the kids were small and now I am overpaying as if it were capital and repayment (and more when I can) I'd speak to a mortgage advisor to see what's possible or extending term of mortgage. It's just temporary until you get past childcare costs.
I have a love hate relationship with my Victorian house. At the moment my conservatory is a balmy 9 degrees but at least I can shut that off.

I think if you are struggling and have no family near you keeping you there, that you should consider something drastic like moving north or to Scotland.
Can you and your husband target Glasgow or Edinburgh for work. Housing will be cheaper and it can be a new life for you all.
You have nothing keeping you where you are the now, it's just personal choice. It's harder to move when kids are settled at school.

You're basically free to move to where ever you want to.

The only permanent things you have just now are a house you can sell and your husbands job which he might find in another city.

You could get work in a hospital in a cheaper place.

How much equity do you have, maybe you can buy a house outright in Scotland and be mortgage free? I live in Central belt Scotland.

I’m pleasantly surprised with the responses you’ve had on here.

i literally have no clue how people are doing it.
we have “London jobs” that don’t exist elsewhere… when buying we looked outside London but the commute costs and time and additional childcare meant it wasn’t viable as the houses weren’t that much cheaper due to how popular commuter towns have become 🤷🏻‍♀️

we make very good money (over 200k gross) and feel the same. The only difference is we fixed the mortgage so could save a bit for both the Mat leaves and so we break even ish each month.
nursery fees are going to kill us BUT we are SO lucky we did a 10 yr fix as we’d be truly crippled if it went to 4% (we stress tested it when buying and up to 5 was fine but increases in COL have totally changed that…mortgage it will expire just as youngest starts school and then we will hopefully cope as smaller childcare fees).

I am trapped in a job I absolutely hate and it just feels so grim sometimes.
i am paying an okay amount into a pension but that’s the best I can say about it

What about a permanent consultant post with a subsidised hospital nursery?

Also,regarding the lodger. They would pay at least 500 a month in London I think and its tax free.

You say that wouldn't even pay for the heating to be on. I don't quite believe that, but frankly at least your heating would be on so that's one less thing to worry about.

Hopefully lots are reading this post and realising that Labour is making many people’s lives rather unbearable. I have a read a number of these posts, penned by high bracket tax payers, as the OP has stated, those with education and flexibility will seek a better quality of life in other countries. The UK is sadly a dust bin of inequality, things have got slightly worse for those who pay the lion share of the tax. With growth set to be very slow (and wages stagnant due to employers facing higher NI costs), and inflation and mortgages set to increase again, it’s hard to see a time when it will be different. To all those chorusing ‘leave London’, highly paid professionals all making this move would leave the country destitute, so this hardly seems the answer.

I think the person who suggested you look into renting out your house and then you can rent a smaller and cheaper to run place, perhaps a flat in the same ish area, was the right one. You will be able to work out if this is a good idea if you look at the numbers.

You will also be warmer.

You can return to your house when things improve.

I do know Drs get paid very well in Australia so perhaps spend a year working there while the children are not at school in England and rent out your UK house?

I mean the OP has partly made their own issues. They don't NEED to live in London, people have commuted in to London to do professional jobs for decades and decades.

She didn't NEED to buy an energy hungry Victorian house. A £500pm energy bill suggests a very big house or an absolute wreck.

I have a BIL GP. The reality is I earn more than he does from a few hours of work a week.

GP pay in this country is appalling

I don’t think it’s Labour making people’s lives unbearable! Hugely inflated asset prices are the result of policy decisions over the past decade. So a modest London home is completely unaffordable for normal people. Nurses costs are massive compared to other countries-that hasn’t happened under a Labour government. I’d look at the state we’re in and see who has been in power for most of the last 45 years.

Gosh the ‘leave London’ chorus is so boring and repetitive it’s actually tiresome. If everyone decided to do that house prices would fall in every shitty part of the UK… Causing a nationwide recession. If someone in Birmingham complains about cost of living, do we tell them to move to Spain? No, but London city dwellers are fair game?

I think you will find homes in large cities have unaffordable for decades. One can’t decry the cost of housing whilst pocketing the profits from buying and selling themselves. Do you own a property? Have you bought and sold in the last 45 years?

@80smonster I live in London. I cut my cloth though. I realise if I want a Big Victorian house I would have to move further out. So I remain in London in more modest accomodation.

Are you a doctor/consultant? Obviously those earning modest income live in modest property and locations. What the OP is posting about is the highly educated and taxed finding basic items unaffordable.

If you can address the problem of poor insulation and your home is more comfortable, you may find things a little less miserable.

Have you looked at intermal insulation? Even just your main living-room would help. Our previous house had lowered ceilings which made a big diffeeence too. The expense could be offset by savings in fuel bills.

Congratulations on your new baby. Don’t ignore any signs of slipping into pnd. 💐

With respect @Dreambow you do seem to have an answer to every solution that anyone suggests as to why it wouldn't work. This suggests you don't want a solution just a safe place to rant, which is fair enough.

Moving to a cheaper house would definitely make things easier financially, that is obvious as your mortgage would be a lot more manageable plus lower heating bills, etc. Yes you would have to pay stamp duty on the cheaper property but after that your mortgage payments would be cheaper every single month. And you have a lot of months/years ahead of high nursery fees.

I think in reality you just don't want to move from your lovely big house, or from your desirable location to one further out of London, or to get a lodger or a live in nanny/au pair. Which is your right. but it might be better to frame it in your mind as you are choosing to have a few tough years knowing that things will get easier financially once your children become older.

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.

I don't understand why the conversations about moving out of London all seem to involve still working in London/commuting as if moving out of London means still hanging onto the rest of your life as you have it now. Is there really no option to live somewhere much more affordable and base your lives there?

That's a huge increase in your outgoings and sounds really tough. I'm not surprised you're fed up! Lots of people commute into the city from west of London on the Metropolitan line. It makes the costs far cheaper as part of TFL and is more reliable than trains often. You'll get substantially more for your money and can reduce your outgoings. Is it an option for you to look for permanent work elsewhere to reduce your travelling on contracts? Another thought on the childcare, I'm a high earner and when I went back to work it made financial sense to drop a day so I could access the childcare and spend a day with my DC, else I worked out I was losing hundreds a month to work an extra day, which is madness really. I know it's controversial on here, but could that be an option for you? Then you get tax-free childcare and 30 hours for the eldest which might help?

Pay restoration

I feel like I could’ve written this post.
I'm a doctor too, husband works full time. Have a toddler with another on the way. Mortgage and nursery fees increased suddenly and we are struggling. We don’t live in London, we live in a relatively cheap area. Drive old cars so not paying monthly. No recent holidays, going out for meals is off the table.
No wonder doctors are leaving in numbers. Crap pay, COL insane.
Can’t take the full year off for mat leave as we can’t afford it.
it’s a mess really.