Living beyond our means.. will it ever end!

[Wharawho]

Aibu, to be completely fed up with living month to month and barely being able to pay for everything?

For context, we're a family of five... me, DH and 3DS.(7, 6 & 3)
Household income of £70k
3 bed semi- mortgaged (nearly £1k a month- this double last feb when the interest rate went up 😞)
2 cars (15yo car paid off and family car on pcp at £450p/m)
For context we need the family car to fit all 3 kids carseats in and I also require a big car for my business. I hate having finance, but we can't work without two cars or even go out as a family if we had one small car! And we definitely don't have the money to buy another outright.

Despite what I think is a reasonable household income, 1 week after being paid, almost every penny is claimed by our household bills and expenses and we spend the rest of the month penny pinching.
We're one big unexpected bill away from not being able to buy the shopping and I'm fed up of it to be honest!
We don't have big expensive holidays or eat out/ have lots of takeaways.
If anything I'd say we live quite modestly... we've lived in the same house for 6 years and still haven't be able to finish renovating it, as we don't have the money!
I haven't had my hair cut for 2 years, as I can't commit that much money to myself... I'm also in desperate need of a new pair of glasses, but I can't afford to buy a new pair ( I have to wear them all the time!)
Days out tend to be outdoor places, with a homemade picnic and maybe an ice cream for the kids!

We buy our clothes from places like Tesco and primark, rarely do me and DH get anything only when we really need something, just the kids and we pass down clothes through our boys as they grow to save on money.
The kids attend swimming lessons once a week, this is their only "luxury" or "extra thing" they do I'm all honesty, and something we prioritise, as we think it's important that they can swim! Even this I price shopped for the cheapest lessons to make sure we pay as little as possible!
We do have the typical Netflix, Disney etc and go for a Costa 2 times each month, but again nothing extravagant... just living and trying enjoy small pleasures and have something to look forward to!

I paid myself today and after all of our bills and food money we literally have £160 to last the month,.. which includes entertaining the kids, buying school clothes/shoes, treats, covering unexpected expenses or car/house repairs!
We don't have enough to save for a rainy day fund and the minute something comes up, any savings we do have are gone and we're back to square 1!
Last month the 15yo car needed new brakes/ discs and a few other bits to pass its mot, setting us back £500.... we paid for it on our monzo flex (we only use this in emergencies when we really can't afford and pay it back ASAP!) but now this has left us short last month and this month paying it back! (As I say... one bill away from despair)

I work for myself, from home and my business requires lots if space (I've converted our garage)... however my business is limited by my space and to grow and make more money I need a bigger work space/ bigger home.... which we can't afford!

How do people afford to go on holidays, have big flash cars and big 4 bed detached houses?!?!
18 year old me would have been thrilled to bring in £70k... but here we are struggling to make it through to the end of each month!

I guess this is just a rant really, as I'm feeling so deflated looking at our bank balance before the month has even started! 😞
Please tell me I'm not the only one experiencing this!

In your shoes I would find a way to up our income. Either you need to action a strategy to make bigger money with your business quite rapidly; and I think your DH needs to try the same- find a way to boost income. I think 3 kids on that income today is a hella stretch tbh. Best of luck x

How do people afford to go on holidays, have big flash cars and big 4 bed detached houses?!?! - they have different salaries and spend different amounts and live in different places and have different lifestyles and different numbers of children.

18 year old me would have been thrilled to bring in £70k... but here we are struggling to make it through to the end of each month! - you're not 18, you have a husband, mortgage and three DC.

The £450 a month on PCP is ridiculous. You could get a bank loan for a decent car more cheaply, and would own it in five years.

1 week after being paid, almost every penny is claimed by our household bills and expenses and we spend the rest of the month penny pinching. - you're not living beyond your means, you're living to your means and that's a valuable thing which too few people do. It's a brilliant achievement.

Debt. People have debt. Or they live within their means like you and I, and forget that comparison is the thief of joy. You have a safe home, DH and DC, and enough money to live on.

There’s a stress-free job and there’s a job that you actually pay to do though (ie a hobby ). My yoga sessions are stress free … I pay £20 a session

I do think house price inflation has changed society a bit sadly. My impression (from books and films, maybe I have this wrong!) was a generation ago you could get a fair house as an artist or writer (eg). By not having a well paid finance type job, you just couldn’t go skiing and drink loads of champagne but could still have a nice simple MC life. Now it seems very hard to have a creative job you have for love and actually have that lifestyle

Your food bill is enormous. See if you can try and reduce that. I second scrapping the swimming lessons. Just go one or twice a month by yourself and they can learn that way.

I lived at home until I was 25, then rented for two years before meeting my partner, but I've been saving since doing summer jobs as a young teen, and my partner was able to live in her Nan's old apartment and wasn't charged rent at the time, so had a good amount of savings, and from our savings we both had some investments. We eventually bought something together outright, but this was a good couple of decades ago. I suspect now would be much harder.
It was a combination of frugality and good fortune.

I'm guessing OP is running hers off the business and writes off the costs against tax. She might argue she needs a smart large vehicle to give the impression her business is thriving. Turning up in a Land Rover Evoque says something to some people.

It doesn't sound like a particularly great business plan, but I guess if her minimum wage payment comes on top of having the car and writing off the costs of fuel, insurance etc that means she's actually 'earning' more than she appears to be.

I hope you didn't borrow money from the bank to start this business, OP? Did you increase your mortgage to finance your capital outlay?

Another one who thinks the food bill is enormous tbh.
oh I’m also in the Honda Jazz thought club too 🤣 cannot knock it. I have the newer one which is bigger but my previous 2011 was just brilliant too.cheap insurance and car tax yet still shockingly decent for the family

It’s definitely true. We are in same bracket and we have had loads of help from my parents over the years. They generally pay for a holiday a year, they pay for some of my kids classes, they buy a weekends away or theatre tickets for Christmas & Birthdays, they’ve gifted us thousands towards work in the house/our original deposit.
Other things that give us extra are that over the years one or both of us have always had a bonus & my work does various employee awards so most years I randomly get a few hundred up to a couple of thousand in gift vouchers for various retailers or even in extra cash. Each individually doesn’t feel like a huge amount and I often don’t think about it but collectively it’s thousands extra a year.

To be fair, quite often I DO think "get a grip" (the poster last week "struggling" on a £130k income, for example) but ops case is pretty reasonable - everyone saying £70k isn't that much is missing the point that its still above the average household income and, significantly, she's only asking for an "average" life - she isn't complaining about why can't she afford an expensive holiday abroad, she's asking why she's struggling to pay for a few coffees a month!

You only have one life and if you are happier with your own business and seeing more of your DD then go for it but the trade off is to live more frugally for now.

Ditch all the streamers, only subscribe to the free or cheap month offers and cancel your DDR the day after subscribing - the trial will still run on to the end of the month, only subscribe when there is something you really want to see (or find free things on youtube and bookmark them for future viewing, or check sites like FreeVee (Amazon), Tubi, Dailymotion etc). If you aren't fussed about legality then learn to torrent.

Kids are at school so much that they often hardly wear their casual clothes, so I'd pare back on buying those. Except for cheap summer stuff.

Set a budget for Christmas/birthday gifts - we always got along fine with a £30- 40 per person limit - we told the kids this upfront and they were happy and now as Uni age adults - they say they genuinely really were happy with the budget and still are. Buy secondhand on ebay/vinted/charity store/ Amazon sellers for things like books and toys where possible. You can then get a lot for your money. If the DC want something special like a games console or games for it then they can pool money and money from grandparents etc. to try to get it for Xmas. Another upside has been that our kids aren't very consumerist.

Sign up to Prolific (Academic) - they actually (unlike other survey sites) pay out from £6 for doing surveys and they pay a good rate- you get the money instantly to paypal. You may not get offered as many surveys as you want but doing them in downtime is a great way to build up a bit of spare cash.

Get NHS glasses and frames - I'm upfront saying that NHS ones are all I can afford - our local independent place charges £85 inc. for lenses and the frames .I think big places like specsavers do even cheaper ones. I honestly can't tell the difference to designer frames unless you want a brand on the arms, a bright colour or rimless/wire framed ones.

This is a temporary stage- when the DC are older and don't need childcare you can have more time free to earn more. A happy mother is better than a stressed, burnt out one.

Earning what sounds like pocket money on your hobby is a luxury it doesn't sound like you can afford but there is middle ground between that and your old work life - get a PT job that either can be done evenings/weekends, or, run your business then and get some work a few days a week.

I'm in a similar financial position to you albeit slightly lower income & teenagers. I love my job and appreciate the flexibility it gives me whilst my children are still at school. I too feel I couldn't go back to my old stressful job so accept I'm stuck in my current low paid role. However something had to give so I've taken on a 2nd job doing something I really enjoy (sport coaching - I found a funded training course so didn't even cost me anything) which has given us a bit more each month plus allowed me to start topping up a rather measly pension. If you do something crafty, could you teach this at the adult education centre? Easy to get and usually quite flexible is supermarket, bar or restaurant work - a couple of shift a week evening or weekend wouldn't be the end of the world could bring in a few hundred pounds extra each month. It's such a small amount of time you can surely put up with that for the financial gain whilst your children need to around in the day.

I'm sure someone has pointed this out (long thread sorry can't read it all) but your tax debt of £350 a month equates to roughly £7,000 a year pre tax and your car PCP even more at £9,000. (assuming top band 40% tax and not faffing around with NI)

So your £70k income without those two things is in reality £54k

Still managable but it's not a surprise when you get a few bigger bills that you don't have the headroom to deal with them (well you do but it spills over into other months. You can obviously save money but it would mean thinking to yourself - we're choosing to have an expensive car so we need to cut back on holidays/discretionary spending to pay for it. I save to buy a car say 50% savings 50% bank loan and when I pay the bank loan off I replace the car with what I can afford. Plenty of second hand cars are reliable but all cars will need brakes, exhaust, tyres and battery done from time to time so you have to factor that in.

I don't think your mortgage is unreasonable.

I think that the solution here is to work out how you can make your business more profitable.

You’ve identified that space is a limiting factor so I’m wondering whether you can brainstorm ways of having more space.

If your space is for storing equipment could you get a shed? Or use the attic? Or see if a neighbour has an empty garage which you could rent? Can the equipment be changed for something smaller which does the same job? Or something which does multiple jobs? Or folds down?

If it’s for storing stock can you change the packaging to take up less space ? Or look at a just-in-time ordering model? Or re-do the shelving to hold more stock? Or purchase the biggest item just before the event and keep in your car for 24 hours?

If it’s for production and you don’t have space for more people can you look at shift work (ie you work 8-3 and a staff member works 3-8).

Once you’ve eliminated barriers to growth, also look at profit margins. Can you do more local advertising to reduce travel costs? Can you source product cheaper? Can you increase profit?

Also look at increasing sales per event. If, for example, you’re a decorating company can you offer a bubble machine as an extra for x amount; can you recommend a dj and add a mark-up on their price? Can you pass bookings you can’t fulfil to another decorator for commission.

Often when we run a business we focus mostly on the day-to-day but this type of strategy work can really really improve profit.

Oh, and as you already know your car finance is huge so that's the first thing I'd sort out. Surely you'd be better off selling the smaller car and putting the money from that along with a small loan to buying an older /less flashy car? I've got a VW Touran that is clean and runs well - cost me £6,000 last year. It's 11 years old, low mileage. On finance this is would only be around £200pm so I'm guessing you have something quite a bit more valuable which is where you may need to compromise.

If you are not commuting to a regular place of work it can be business use. The husbands car and usage cant

As someone else pointed out this is a result in part of poor budgeting over many years.

When your H was self employed and you were earning as his secretary, that was the time to put money away each month for unexpected bills. Ideally everyone should have 3 months' for emergencies.

Packing in your NHS job without much planning for your future was short sighted.

The truth is you can't afford what you want as your income is too low.

You've made a choice.

I assume your H is on something like £55K and you're earning maybe £15 K net or less.

Your food bill is high.
Almost £200 a week for 2 adults and 3 young kids is high.
Even cooking from scratch, it's high.
You could probably reduce that by £30 a week at least by having 3 very cheap meals (dinner) that are based on pasta, rice, or pulses. Cheap as chips but more healthy. I can make a vat of chick pea curry for next to nothing.

I am sorry but your business is really self-indulgent hobby so if you want anything to change you will need to wind it up (or regard it as a top up income) and take on part time work alongside.

OP we are in a similar position but our income combined is around 56k, we also have three children aged 11, 8 and 2 yet we seem to have a lot more than you do after bills etc. My mortgage is £892 per month along with council tax, bills etc it all comes to around £1900 per month and we are left with around £1100 to live on for the month. It can be tight with three children but I don't understand how you can be on nearly 20,000 more than us and have less money at the end of the month, the only thing I can think of is your car finance, it's extremely high and is a luxury... you do not need to have a huge car just because you have three children as we have a Citroen and it's not a family sized car and we manage just fine. Maybe you should think about getting rid of your car and getting a less expensive one if you're fed up having no money at the end of the month

Yes I go to a training salon £5 for cut and blow dry.

that's interesting. I am in a very similar position and close to your age but i've very rarely heard people admit it, and I don't tell anyone either. "you get to go skiing". Yup, I do, because I take on debt, and I am fully aware that it's a really financially stuipd thing to do because of the interest. I must pay 100 - 200 in interest just on a short ski break by teh time i've paid it back. Although recently I have actually stopped doing that, and now I just realise how little money I actually have. Maybe I preferred the fantasy land.

Look after the pennies and the pounds will look after themselves is largely bollocks though.

I don't think it is tbh.

It might be "only this much" per month, but too many "only this much" & you're living beyond your means.

Of course if you want to keep that level of spending then you do have to earn more.

Your problem is £70k just isn't that much money. You need to adjust expectations. I think the car is the first one - I have 3 kids and reckon my car is about £200 a month including depreciation, tax, and insurance. That extra £250 a month is £3k a year so you're effectively working for about 3 weeks of the year just to have a bigger car than you actually need.

I feel comfortable on 16k. It's all relative

Hate to be that person, but please can people stop quoting the original post? I normally don't say anything but this thread is really bad for it happening over and over - the first post is long and people are quoting it and adding one line or two in reply below it. Just post your own post, we've all read the OP. Thank you!

Not necessarily I presume the payment is so high because they had little to no equity to put down for the car. I'm thinking a car loan may have been a better deal even if the comparison payments were similar because at least at the end of the term you own the car. PCP usually means you have a balloon payment to pay or you roll into another PCP deal. But some people go with a PCP deal for car maintenance packages and so on. Vicious circle to get out of!

You need to earn more. The wedding business is a nice hobby but someone with three kids to support can’t afford that indulgence. Time to cancel the contracts and look for a job with higher wages.

I understand not wanting to work but that option is off the table once you’ve chosen to have kids.