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!

you are asking two separate questions really @Wharawho

Why don’t you have enough money?
Because regardless of how necessary these things are to your life the sum total is just too high. £450 is a huge amount on a car. I used to have a decent size family suv for £250 a month, a couple of years ago but it’s paid off now. No matter how much you say ‘but we need it’ which is fair enough, that is where your money is going: equally 3 kids are expensive that is an expensive life choice and there is a cost of living crisis going on so everybody is really feeling the squeeze. It’s not just you, life is expensive right now. £70k is the new £40k (I read an article about that the other day actually) but people are still surprised that they can’t live the perceived £70k lifestyle anymore.

How can others in the same bracket afford these things?
so we earn about 100k. We have 2 kids. Our circles are very much the 70-120k young families and honestly although we all seem quite ‘middle class’ the biggest difference is family support. We just spent the Easter holidays at centre parcs, did we pay for it? Nope. ‘Cash gifts’ household items being bought and paid for, use of family owned holiday properties, renovations being sponsored, it’s absolutely rife amongst both us and our friends and when you scratch the surface of ‘oh we are actually getting/going to/buying’ you realise quickly how it is being afforded by these families. It’s toxic that people aren’t more up front (I am) because those who don’t have family support see others doing it and try to keep up thinking ‘we earn the same we should be doing that too’ and just dig themselves into debt.

Really?
I'm surprised. I have never seen or read what you are claiming.
My experience of mumsnet is that if someone says "I can't survive on £70,000" people reply to say "70,000????????? That's barely any money at all!!!!!!!! I earn £170,000 and we're struggling on that! No wonder you can't survive, you're barely bringing in any more than minimum wage!!! You need at leat £200,000 as a bare minimum to live just about comfortably!"

I feel for you, and your situation, those putting off needing new glasses, and your sight, could prove unwise, in terms of safety.
Get a money plan, somehow, patching up old cars is very expensive, been there, having no back plan either.
Is there wider family support you could have money wise?
Not being unkind the Netflix and coffees need to go, they could boost your emergency fund, if you saved that money.
If a family member bought a pod machine / gifted / sourced 2nd hand and frothier, would pay for your ‘Costa’ coffees out.
There are alternatives?
Would you be too tired for a second job?

What’s your mortgage situation? You said it doubled when the interest rate went up so it must mean you are on a tracker? Have you looked at whether you can move to a fixed rate with a lower %?

you have 3 kids
Kids are expensive

your job makes you happy but not enough money to give you a decent standard of living - this is probably the main thing
you haven’t adjusted your living expenses to reflect your new minimal earnings

and you have said it won’t make a fraction of what you earned before so at the moment this is your life for the next few years
your mortgage has doubled and everthing has gone up but that not your fault

but lots of people have help from family and you won’t see it
I often buy my son stuff or give him cash
like my sons car needed work doing on it so I paid for it and it was around 1k

i often pay for stuff like car mot and servicing and i also pay my sons car insurance
this alone probably comes to a few thousand a year
if they are going away on holiday I normally give them a few hundred quid

they are planning a 3 week trip to America next year and will be staying with family for 10 days and then a hotel
Imm paying for the flights so it wont cost them much

My son and his son partner are young and you might look at them and think how do they get they afford XYZ and have such a nice lifestyle

earn around 70k between them

mortgage is around 1000
they have no kids and don’t want any

own there cars outright via an inheritance and they had a big deposit as well to put down on house

they have a lodger and they use part of this to overpay the mortgage and put some into savings

They are always away on weekends like Gay pride & holidays and generally have 2-3 holidays abroad each year
and they have no debt as I bought them pretty much all of the stuff for the house

But you won’t see that they get a lot of family help
you will just wonder how they can afford it

Look on glasses direct for a cheap pair of glasses, you can usually pick up a pair for £15. Sign up to the newsletter & they will send you a voucher code. I have had a few pairs from them & they have always been great.

Money isn't as much as it was
I worked out that despite several promotions my salary adjuster for inflation is not much more than what i was on at entry level 20 years ago which is depressing as hell.
But not as bad as my husband whos salary has actually gone down compared to 15 years ago, he took a few years out to be a SAHD and got back in to a skilled professional role on 25k, but it was all he could find. He was on 35k 15 years ago doing similar.

World has gone crazy

You're just managing to pay yourself the minimum wage after 2 years and you have three kids. That's why you're struggling - not sure why you need to ask tbh! You need to increase your income, potentially getting a salaried job. Otherwise you accept the trade off that a stress free work life, picking up your kids etc generally equates to less money. £70k is not a good household income anymore.

Are you a florist?

You need to freelance or get a part time job to supplement your self employed income. There just isn’t the money or the work out there. You will never be rich unless you scale your business and that is very hard with children.

People do not go into floristry for the money!

If your business needs a car then the business needs to pay for it. I think you can still get a commercial vehicle with 5 seats and it will cheaper than the £450 you’re currently paying.
To expand have you considered renting some garage/warehouse space? Thinking you need to personally pay to buy a bigger house to run your business is crazy. The business needs to pay for its outgoings. I think you need a chat with a friendly accountant who can advise you on how to run more efficiently.

Her husband might need it for work, not everyone/ everywhere is suitable to cycle

Honestly i wouldn’t focus so much on the cars a lot of people like me have one through their job and think a lot of people forget this and assume they are leased! That’s why there are so many electric cars about now I’m sure of it, as businesses are pushing EV or hybrid ones on you. If I changed jobs I wouldn’t be driving round in a 24 plate believe me. I would look to see if you can really afford to be doing your business at the moment or if it would be better to go back into employment (not saying your not employed but you get the picture) until you feel more comfortable

A household income of 70k isn't high. If you had two people earning 35k, they would basically both be on the average national salary. 3 kids and two cars on an average salary is a lot to expect.

Is the 70k including profits of your business, or the turnover? If the second car is purely for your business then you need to consider profits after that cost or you'll end up resentful for money that was never yours.

Well you can't get rid of a child, live in a tent or presumably give back the expensive car you are now tied into so you need to work out a plan moving forward.

I get that you want to grow your business but it sounds like it's making slow progress and NMW is a pitiful amount and clearly not working for you. You could earn more delivery driving or working in a supermarket. With the supermarket you could take late shifts and avoid childcare, you could even do that to top up your business income and then be able to afford more storage space.

Have you met with business advisors at the bank? Is a business loan an option? Can you convert some living space to storage in your home? Whats the loft like, could you get it borded out for more storage. Could you buy a huge shed. There must be a solution. Could you offer an additional, more expensive Wedding Service or put your prices up? Could you do more with marketing?

Seems to me it’s 2 things mainly contributing to the struggle:

1 - the £450pm on car is a LOT! PCP isn’t usually the most cost effective way to purchase a car. If we need a new car and don’t have savings to pay outright, we buy nearly new secondhand and use a bank loan which has always worked out less than monthly PCP payments and there’s no balloon payment or anything at the end. Don’t go with the finance options offered by dealers as default and always hunt for cheaper credit elsewhere.

2 - the main one is that you have left a higher paying employed role to go self employed and now earn far far less (you mention only now being able to pay yourself NMW equivalent). The reasons you did it are valid and I get it’s soulless working in a job you hate, but it obviously will massively impact the monthly bottom line for the family budget. Loads of people don’t enjoy their jobs but stick at it because it gives them a better lifestyle, so it’s all about the choices you make (and not saying your reasons aren’t valid)

I don't think £70k is a lot of money for the size of your family. Also £70k isn't the same anymore. I earn similar and if,when I was at school, I had imagined I earned that much I would have been beside myself, so much money. But it doesn't stretch these days. I would concentrate on building up your business, you need more than MW.

Hey OP… could you spend some time looking around for grants for your business to help you expand? There’s loads of potential help out there - it’s just whether you have the time to fill out endless funding applications? Might be worth a shot. X

This.

Disney, Netflix and Costa all need to go.

Can you cut down on your food shop? Aldi?

I was thinking along the same lines. Are you sure you are looking at your tax allowance and business expenses and offsetting everything you can?
The payments for your second car are huge.
As pp said, a small second hand car would be adequate for 1 adult and 3 children for the work and school run.

You have an income problem, imho. £35k each is fine for two people without kids but nowhere near enough with 3, two cars and a hefty mortgage.

The car is the red herring here. You need it mostly for the business - that means the business needs to pay for it. You are effectively subsidizing the business to the tune of £450 month which means you are earning way less than the National minimum wage. I realise this sounds harsh but in financial terms, this just isn’t working. The reality with the car included and the investment in your garage conversion is that this business is only just breaking even. National minimum wage minus £450 a month is what you are really earning.

You must think creatively to improve that.

If you love the wedding industry, either up your prices/rates, or look for a flexible job in the industry that pays at least the National minimum wage if not more. You just have a network of venues etc and given your ability to find customers, one of them may well have a wedding or events coordinator role. Average salaries for those according to
indeed in my are are £27-35k pa. Even if part time this would up your income by around £400 a month, some roles like this pay bonuses and commission on top.

Alternatively can you use your skills from the NHS to provide private therapy/VA services/caring services? These all have hourly rates around £15-20 per hour, so even part time this would bring in more.

You can then look again at the car situation, as plenty of secondhand cars have 3 seats on the back, look at Lings Cars for deals on pcp at less than £300 a month, meaning you have another £150 a month to play with.

Can your partner earn more? Are you claiming child benefit?

@Wharawho I've read all your posts and ultimately this is a choice arising from a work/life balance issue.

You can budget around some of the bits and bobs: coffees, tv subs, your father's birthday present, etc., but dealing with those will barely make a difference and they are the little treats that make life bearable.

Your two big issues are the £350 arising from the HMRC error (ouch) - when is that paid off and could you negotiate down the monthly payments over a longer period? And the car at £454, I think you said.

The car is a necessary evil (although I think you could have bought a reliable, cheaper one, with a loan and owned it at the end of the loan). It is what it is now it's done, but if your business isn't covering the car and life, then you have to earn more. Another £100 a week would do it and be a reasonable investment into further growing your business. You will have to fit it into weekends/evenings:

Babysitting
Ironing
Bar shifts
Early morning cleaning
Pet feeding

Sorry op, but if you need more coming in, then you have to find a way. There's no point saying that costs will fall when the three year old is at full-time school because the children will get more and more expensive.

Finally, please get one of your wedding industry contracts to give you a haircut in return for some mutual recommending.

Try reading the book Total Money Makeover by Dave Ramsey. It's American but can be applied here. Although most people use his method to get out of debt, the principles of his method would really help you I think. You need a small emergency fund because you're an emergency away from being put in debt. You need to start saving for a car so you get out of your very expensive PCP trap. And I think you may need to see if you can earn more? Even just temporarily to get yourself in a better position. His podcasts are good to listen to if you can whilst you work. Good luck!

Find an evening job when your husband is at home. My friend has her own business and is able to pay herself a small salary. She does office cleaning in the evening when her DH is home to look after the children. That’s pays for the fun things.
Get rid of the car on PCP they’re an absolute rip off. Buy a slightly older family car on a personal loan if you cannot buy it out right.