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!

Depending on your income, have you transferred your tax allowance to your DH? Also have you considered/reconsidered your fees recently for the work you do in light of the COL increase? It may be that you need to put some fees up, particularly if you are travelling fairly long distances as that immediately adds to the cost.

It's twice the average household income so not modest in the scheme of things.

How long is the term on your mortgage and how old are you? If there’s a bit of wiggle room on this you could up the term for a few years which would lower your monthly payments. You will obviously pay more in interest in the long run, but if it helps you pursue your business it may work out well.

I had to do this due to my circumstances and my mortgage is £300 a month less. It was either that or lose the house altogether in my case. This was cheaper than renting the equivalent of my house which would have been £800 a month more!

Terms and conditions of some PCP deals allow the person to walk away early. OP should at least be exploring how to get out of the PCP deal. £450 a month is a whopping sum of money.

The regular costs you’ve mention (bills, food, fuel, HMRC) come to under £4,000. There should be another £800 there which is your extra comforts/unexpected extras buffer. You really need to understand where that is going so you can cut out costs which aren’t worth it.

Spending 10% of your income on financing a car in an expensive way is obviously a big burden too.

You’ll have a big boost when you aren’t repaying HMRC any more so keep in mind this is temporary.

The other major item to look at is the mortgage - when are you aiming to repay by? Having a longer mortgage will cost you more overall but there’s no point impoverishing yourself when the kids are young and then being mortgage free in your 50s when you’re still working.

@Willyoujustbequiet It's twice the average household income so not modest in the scheme of things.

https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/householddisposableincomeandinequality/financialyearending2024#:~:text=Main%20points,)%20pandemic%2C%20FYE%202020%20levels.inancialyearending2024#:~:text=Main%20points,)%20pandemic%2C%20FYE%202020%20levels.

Are you sure? This link states that the median disposable income is £36,700 per year (it appears the ONS defines "disposable" income as all money available after taxes).

OP has explained her monthly income is £4800; so not twice the average.

Not meant unkindly, but the reality is that one or both of you need to earn more. Very few people love what they do. I feel that realistically you may need to postpone your own business plan until you have greater financial security for your kids’ sakes & the reassurance of a regular salary…

@Em1ly2023 Not meant unkindly, but the reality is that one or both of you need to earn more. Very few people love what they do. I feel that realistically you may need to postpone your own business plan until you have greater financial security for your kids’ sakes & the reassurance of a regular salary…

"Just make more money bro!"

Thanks for the advice, Emily.

£3500 take home. But even 3k is a lot of money?? Maybe because I was always really poor I feel very well off now.
Rent and council tax 1k. Roughly 1k on other bills and food shopping. Fair amount left to play around with.

@Nursingadvice £3500 take home. But even 3k is a lot of money?? Maybe because I was always really poor I feel very well off now.

Well you feel well off because you are well off; £3500 take home is indeed a lot of money for one salary.

We couldn’t survive on that income - 2 Adults, 3DC and living in the SE. don’t beat yourself up

Yes! Although imagine it will be more when kids are older.

I’d need a full breakdown of your budget to understand this. We’re also on 70k gross household income, only one child but we have about £1,500 left over at the end of the month (after food, takeaways, days out) to save, overpay mortgage or put towards holidays.

We have no debt. One car between us not on finance (both WFH). One child with 15 hrs free childcare and family help. Our income is split between two people almost equally. Northern. Obviously these are all significant factors & just goes to show how varied income needs can be for each family.

70k?
Jesus, I'm a single parent on 24k.
I suggest food banks and shop at Lidl.

Cut out all thecsxtras. My treat this month was a candle from asda and a costa coffee on my birthday.

I was a year out of date sorry. The ONS puts it as £34,500 for 2023. Its now £36,700 for 2024. Which makes the OP £3,400 p.a shy of having double the yearly income.

Also it's only £900 off being in the top 10% of households.

Jumping in to say you are right. A lot of people on here don’t realise it’s after tax including council tax. Household income also includes households where people don’t work eg retired households so not a hugely helpful comparison since they may not have housing costs and won’t have dependents.

Average weekly earnings are £716 (including part time workers who will skew it down as it is) so OP’s household brings in less than average for 2 workers (~£74k) https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/averageweeklyearningsingreatbritain/latest

@Willyoujustbequiet I was a year out of date sorry. The ONS puts it as £34,500 for 2023. Its now £36,700 for 2024. Which makes the OP £3,400 p.a shy of having double the yearly income.

£34,500 disposable income = £2875 a month.
Double this would be £5750.
OP has £4800 a month.

To have double the average (for 2023 figures), OP would need an extra £950 a month, or £11,400 a year going into her bank account.

????

@suah Average weekly earnings are £716 (including part time workers who will skew it down as it is)

It's not clear though whether the "average" in "average weekly earnings" is the mean or median (mean is skewed up due to tiny % of extremely high earners). I would have expected better from professional statisticians.

The figures I quoted from the ONS are annual.

The OP said £70,000 in her opening post. She did not say gross. That is virtually double and puts her just shy of the top 10%.

I think you are splitting hairs tbh. It's clearly considerably more than the majority of people.

https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/householddisposableincomeandinequality/financialyearending2024

Sadly there are a lot of people in your position, or worse. It sucks. We are losing money every month atm and so our savings will be non-existent soon. It’s great you’ve set up your own business! Employees never get rich. Good luck!

No I don't. I know they are expensive as hell though, and as they grow into teens even more so.

No, I live alone and am disabled. I pay for my own food. The house I am in belongs to a relative. I am not sure how that makes me a parasite.

I don’t think you’re being unreasonable at all, in actuality, £70k for 5 people really isn’t a whole lot of money in fairness considering the £1k mortgage, car finance and I’m guessing £200+ council tax before we even look at your other utilities!

I live alone comfortably on £35k, I couldn’t imagine adding another 4 people to the mix for just double that amount in all honesty!

You clearly both work full time and you aren’t living luxurious lives so I’m not sure what to advise other than maybe looking to see if working for yourself is really bringing you what you expected in, I know you’ve said space is the issue but if it’s not working then it might be worth looking at alternatives as painful as it might be :(

That’s the bottom line sweetheart. Wouldn’t we all love to fanny around fulfilling our dreams? I know I would. Needs must, (esp. w 3 kids!) f**$¥ing miserable though it is some days 💅🏻

People are so quick to pour fire on a woman trying to grow a business and you've summed up why. It's jealousy, why should someone else do something they love when you can't.