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?

If you're in a victorian house, could you downsize to a flat? I know it's not an attractive option but it could change so much for you. We bought a 2 bed, ex council flat in zone 3 for 350K (3 years ago) and mortgage payments are 1500 per month. Your kids are so young they can share a room. Just anything to relieve the pressure in the nursery years.

We have looked into moving out but DH and I do long hours (unable to compress). He has to go into the office and WFH is not encouraged so it would make nursery and later potentially school drop offs and pick ups viable if in London. I don’t think we could make it work out of London unfortunately as trains are too unreliable (and very costly).
Also I tend to work outside of London and need to travel really early to get there so being in London gives me the opportunity to do my job. If I lived out of London it would make by job unviable as I wouldn’t be able to make the hours work due to increased commute times.

You are being too defeatist about this, but it's a solution to your problems. London is extremely expensive. Millions of people live outside of London and commute in every day and many of them work long hours in stressful positions too. Yes it's a bit shit, it's expensive and lengthens an already long day and it's exhausting, but it's a damn site cheaper than living in London, and money is your big issue right now.

This is the price you pay for earning well in professional careers which will ultimately make you relatively rich and comfortable. Apart from juniors, does anyone know any poor doctors? Most doctors tend to end up very well off indeed. If you want an easier life, do a simpler job. You'll have far less money in the long run, but that's a choice we all need to make. The early years of building any professional career are hard and require sacrifice and delayed gratification.

You can move somewhere much cheaper with a commute of around an hour to 1.5 hours from where your DH is based. Pick the nearest mainline station and go outwards from there so he can walk from the station without having to add buses or tubes.

You can change jobs and work more locally which will save you time and money. Childcare will be cheaper outside of central London too. You may even find that as you have a career that you could park for a couple of years and then go back to easily enough without being damaged by a shortish absence, you are no worse off for staying at home for a year or two. Especially if you can cut your outgoings hugely by buying in a cheaper area. Both people in a couple trying to juggle demanding careers with long hours and a young family is always hard and there is no magic bullet.

Well yes, @80smonster, simply because it's an incredibly expensive place to live!
There is also a fairly significant part of me that cannot comprehend the desire to live there, but that's a personal chip on my shoulder which I apologise for.

I don’t want to denigrate your position, but those early years have always been brutal. When I had kids your age 30 years ago we had to extend our mortgage twice to pay our bills. At the time we were told it was the cheapest way to borrow money.

I used to invite my parents down for the day and go shopping with mum so she would buy my kids shoes because we couldn’t afford them. Haircuts - did our own. Holidays were houseswaps with relatives. Going out for coffee was unaffordable - it was instant and a bourbon biscuit at each other’s houses. Or bring a bottle (and your kids) parties.

But it passes. The older the children got, the longer hours I worked. DH got promoted. Our equity increased. Try to see it as a stage, enjoy the free stuff like the park with a thermos and try to find pleasure in the everyday.

This is easy to say but not really fair.

When we bought place our bills were £130 for a 2000 sq ft 4 bed semi, they are now pushing £400 pm 5 years later.
You can’t keep a house at 14 degrees all day when you have 2 small children and one is a newborn.

regarding London
similar to OP we weren’t even wedded to living in London but the reality is my DHs job doesn’t exist outside square mile and mine doesn’t exist outside soho.

if I had switched to a ft remote job in Covid and we did move out…. I’d be stuck in role unable to move due to my companies return to office policy, and unable to move to a new job as stuck in the middle of no where*, I’d have no family support and my DH would be doing a 2 hr each way commute.

*I have several colleagues who DID do this… they are mostly not in a good place

the OP isn’t unintelligent she didn’t make a plethora of shitty decisions culminating in this. She (erroneously) thought that with a household income of 200k plus per annum she could dare to dream of raising 2 kids in a house slightly nicer than a standard 3 bed semi, buy a few treat from M&S and go on a nice holiday once or twice a year

I'm in a similar situation as the OP and there’s been no “lifestyle creep” over here.
Are your kids in nursery? Have you recently been on maternity leave? Did your mortgage go up?
Your comment isn’t very helpful.

Everything has increase significantly in the last year or two and that does make a much bigger impact when you’re at this stage - big mortgage without building up much equity and also childcare.
Sometimes I feel similar and think ‘if things feel hard for us how do so many other families make it work?!’

However you must have a decent buffer between your income and your outgoings in order to go down to MA and still pay your bills so surely before Mat leave there was spare money for the little things like coffee that you say you can’t afford? So I imagine this must be exaggerated due to all the shit that comes with being 8weeks PP.

The great thing about London on mat leave is you don’t need to pay for expensive classes. My borough have a map showing all the family hubs and at least 4 are within a 20 min walk from me with all the baby groups being free or £1.5 at the most so look into that where you are.
I did all the expensive classes with my first and this time around I’ve mostly stuck to the family hub groups or library classes.

Blimey OP this is no life you may earn well but it sounds like you're drowning and thoroughly miserable. What's the point in living in London earning all that money if you can't even afford to go out. Life is too short to live like that IMO.

You say you can't move you, but you really can. We live in an affluent part of commuter-belt near a big hospital so have quite a few consultant pals and lots of city workers and they all live ridiculously comfortable lives. Yes very long hours (plenty on that 5:30am train) and the vast majority had nannies to manage childcare when DC were younger, but that's not forever and they live in beautiful homes and want for nothing financially. Plus now we are all a bit older, they all now work PT or more flexibly and many are retiring in their 50's and living the life of riley!

Practical tips
+1 on council run and church run playgroups

also recycle at boots scheme. It won’t change your life but if you recycle 5 items (baby items feature heavily) you get 500 points for a £10spend.
i break my buys down into nearest to ten pound groups and buy stuff like sudocreme when on offer, i have over a thousand points now

Not sure how the CoL crisis is Labour's problem. I also really despair at the commonly spouted nonsense that higher rate tax payers resent paying more tax and would rather leave family and friends to emigrate elsewhere to shirk civic duty by paying more tax. Me, my husband and all our other friends who are high earners all voted Labour/Lib Dems, and would all happily pay more tax for better public services. We appreciate we're the lucky ones. Not everyone votes for selfish interests, lots of people vote for the greater good.

Only some commuter towns. If you insist on living somewhere like St Albans or Sevenoaks or Chislehurst or Oxshott then yes it will be very expensive. But if you are prepared to be somewhere less chi-chi then it's far more affordable. That's the problem with some people who can't countenance life outside of London. They will only move to somewhere they consider to be leafy, beautiful and sophisticated with all of the same benefits of London living but none of the downsides (grime, crime, crowds.) When they've found their handful of utopian areas that appear to offer that, they realise that the relatively small savings are not worth the upheaval.

If they'd widen their net and be less...I'm trying not to give in to my urge to say 'snobbish' so let's say..discerning, then suddenly everything is much more doable. You need to decide exactly what it is you are trying to achieve and what you are willing to compromise in order to do achieve it.

Is there any particular area outside London where you tend to work more? Might it make sense to move out in that direction? It sounds like if you had a consistent area of work you could reduce commuting costs and improve your own quality of life by ensuring you have short commutes, which in turn would make things like nursery drop-offs easier.

@Beemum2 yes I've taken two maternity leaves (both SMP only) and have had two children in nursery at the same time.

We earn about £65-70k combined. I work part-time and one day is at a weekend to cut down on childcare fees. Our mortgage hasn't increased because we fixed for five years when it was 1.7%. But it's low to start with as we didn't overstretch, so we can manage the increase.

We just don't live in an extremely high COL place 🤷‍♀️

Yes lots of city workers live round here (45 mins down train line into waterloo). Houses (and nursery probably) far cheaper!

@80smonster yes we are both educated and yes we earn well in senior public sector roles.

But we accept reality. We are both from working class backgrounds with no family money or hope of an inheritance. It is what it is. If we want a big house we will, like many colleague and friends, have to leave London. We chose differently, mainly cos Mr Monkey was born here and doesn't feel he should have to leave. No point in whining about it and on the plus side our "modest home" doesn't cost a second mortgage to heat.

Now if I were in charge I would actively enact deflationary measures on the housing market. But i'm not.

Have you done the figures on moving out of London? Leicester to London is an hour by train and you could probably get the same size house there for £1000-£1300/m.

And the excuse of trains being unreliable or too costly is also nonsense. I commuted for 10 years and I can count on one hand the number of times I was properly late or couldn't get in (I got in half hour early so 'being late' was just never an issue) ditto getting home - one day I had to get a taxi when all trains were cancelled but that was 7/7 when all trains were grounds so pretty exceptional circumstances.

Costly, yes but £6/7k a year is NOTHING when you consider the difference in COL/house prices and how much more money you could have in your pocket.

Well firstly you are benefiting from two child benefit payments, tax free childcare and the free hours that OP isn’t entitled to. Perhaps consider how much easier government subsidies make your outgoings before being snarky about the OP making bad choices.
Never mind the fact that fixing because your mortgage was due for renewal just before the huge overnight change in interest rates was luck not good planning.

Also does DH HAVE to stay working in the city? As a doctor surely you can go anywhere and the family could have a whole lifestyle change! How great is that??

There's your answer then, OP, just reduce your earnings to £65k between the two of you and you'll manage fine as the government will throw money at you. Seems simple!

Two things are causing the bulk of your money problems:

1. Childcare. These are the tough years. If you can just get through the nursery years things get so much better. Consider a shared nanny or child minder for when you would otherwise have nursery fees for both.
2. Your house. OP, your house is a disaster and it is making your life miserable. You can't enjoy it because it's so cold. Heating it would cost so much that it's not worth your having an au pair or lodger. Get rid of the house! Sell it and buy one that is energy efficient!! You can then have a lodger now to help with costs, and an au pair later to help you manage school runs when the kids are at school.

For what it's worth, I totally agree with you about the downsides of moving out of London when you are tied there for work - living nearby cuts down commuting costs and time hugely which is essential with young children.

It sounds really tough, the silver lining is that nursery fees are an investment for a few years for you to be able to keep your job. Just make sure you send your children to state school. If you think about it that way, you just have two more years to fund with two kids in nursery. Hopefully, in two years time your eldest can start school and your outgoings will drop (perhaps your salaries will increase at the same time).

I am not advocating getting into debt but if you know it is just 2-4 more tough years in terms of nursery cost, you could get a small personal loan around £10k spread over the next 5 years and just take the pressure off a bit, as long as you commit to sending your children to state school. Make a calculation of what your budget will look like once one and then two children are attending school. You will have some childcare / holiday camp expenses even then but I am sure it won't amount to two sets of nursery fees.

You do have options OP, which is a lot more than other people - if you are on maternity leave you can take your older child out of nursery for the duration. You can move out of zone 3 - there are plenty of areas that would be much cheaper but still commutable.

I know you say you have been stung by the COL crisis, but that has been going on for a couple of years now, and I know people who have put off having a second child for this very reason - but I agree it is not fair that you have two wages coming in, but can't afford to do anything fun. Have you thought about getting a bank loan to be paid over over 5-7 years to cover the nursery fees? We did this and although we paid interest of around 8%, it made life so much more doable at the time and was worth it.

I don’t think you need to move out of London. For £650k you could get a 3 bed in Highams Park or nearby which has a direct link into the city. It’s a few stops from the Victoria Line for anywhere else in London.

I am guessing you or your husband (or both) earn over £100k a year for you to not get any government help. You could easily afford a place like this, have enough room for your family and have a sensible commute. You could even afford zone 3, somewhere like Blackhorse Road, Tottenham, or Seven Sisters (the latter two will be a bit more) and you’re looking at a 10 minute journey into the city.

Your current mortgage seems unsustainable, with your income you could easily afford a decent 3-bed in London (people afford this on a lot less than your salary), you just seem to be overstretching yourself with your current mortgage.

OP, some great suggestions from other posters are popping up, had you looked into a) a live in aupair, this is usually much cheaper than FT nursery and you should still be able to access the 15 free hours and have the au pair wrap the rest of the days/holidays?
b) same as above but use a childminder to wrap instead (this will be slightly more expensive).