To not understand the cost of living crisis?

[tiggerbouncy]

Fully prepared to be told I’m being tone deaf here.

Before I start I want to caveat this and say I live in the North and I am comparing to other Northerners, as I know the South is a bit of a different ball game.

I earn less than the national average salary. I have recently had my biggest ever pay rise which has put me on 25k for 35 hrs a week. My partner is on similar but has a lower hourly wage (works more hours though). In total our household income is approx 45-50k ish?

We own our home (via mortgage) and we paid for the deposit with no family help.

We go on at least one or two foreign holidays a year and frequently enjoy meals out and day trips to different places.

We have two cats (one of whom has needed very expensive vet treatment) and soil them rotten.

A lot of my peers constantly moan that the cost of living being so high is trapping them either at home with parents, renting, not being able to go on holidays etc etc. Basically, I’ve had a few comments recently about our lifestyle being really hard to achieve and how it’s unfair we enjoy so much.

I just think that we have put our money into things we enjoy (ie holidays) and obviously don’t have children. But I genuinely don’t find like difficult? If our washing machine breaks we buy a new one, if the car needs work we pay etc. We both saved from having full time jobs out of sixth form in order to fund out deposit (again, big bonus of being northern I know!) but our mortgage payments are easily manageable etc.

I’m not suggesting that the world has our circumstances, but a lot of my peers either earn more than me or the same and moan they can’t do anything!

AIBU to think it’s about how you prioritise life and that “cost of living” isn’t an excuse for just being poor with money?

Again, I’m not saying that a single mum in London with 5 kids has the same options or anything like that, I’m meaning in our specific situation. Lots of people moan we earn nothing but to me it feels like quite a lot!

I also see loads of people on here moaning their 100k salary doesn’t go far anymore and they’re missing out on things. If I made 100k I’d be planning to retire in about 5 years!!

Soil them rotten 😅

It’s a crisis because costs are rising much faster than wages than usual. This means more and more people are falling downward, with 21% of the population now in poverty, including 1 in 3 children as of 22/23

The government has recently redefined poverty as % households with less than 60% of median income instead of on an income vs cost to live hand to mouth comparison. This understandably only measures wage growth and not poverty at all as the cost of living isn’t even being counted. So the recent figures are nonsense.

That is probably why you don’t understand it, all the charts are misleading, they say poverty but actually show a declining trend of fewer people making less than 60% of the median wage.

When in fact, if you look at the buying power poverty is climbing and very quickly.

You also can’t understand it because it’s not yet affecting you. Like many in similar positions, you are attributing your good fortune to good choices and hard work. It’s very human to be in that kind of denial, it’s a way to reassure yourself you are safe, you won’t end up struggling or in poverty because you have the right priorities, you work hard (although not as hard as many on your part time job) and you have made good choices. Sadly, most people in poverty also have the right priorities, work harder and also make good choices.

I think for you, you need to exercise your empathy and critical thinking 🤔 rather than patting yourself on the back and burying your head in the sand on what is a growing national problem. Even if you are never personally affected by poverty, you can still become a victim of the crime and civil unrest that inevitably grows in desperate times.

We've been fairly sheltered from the cost of living crisis too but that's down to pure luck.

We (myself and my partner) both came from dirt poor families who had to skip meals sometimes, counted every penny. Things improved financially for my partner when his mum moved back to her home country with her younger kids and the council asked my partner if he wanted to keep her council tenancy and then he at the same time got his first full-time job. I met him and moved in. We pay £500 rent a month, we both bring home £2000 a month so £4000 in total. Because the rent is so cheap there is plenty surplus and we've managed to very quickly save up a £20,000 house deposit whilst also having plenty of holidays and meals out. We don't want to stay in the council house as it feels morally wrong when we are more than comfortable enough to buy and we want an asset for our future kids to inherit.

We're buying a £140,000 house with a large garden, 3 bedrooms, 2 bathrooms (we're in the North). The mortgage will be about £650 per month. We're expecting our first baby and my partner's mum has decided to move back to the UK and will be doing 3 days a week childcare so we'll only need to pay for 1-2 days a week nursery and we've been quoted less than £200 a month for 2 days.

We've got plans for a new kitchen and bathroom in the new house, planning a big holiday to Mexico next year.

So yes we don't really feel the cost of living crisis either but that's because we've been privileged as fuck and benefited from being from a cheap area of the country and benefiting from way below market value rent allowing us to save up. I've no doubt that the cost of living crisis exists, I work for an insurance company and I've spoken to customer's who are in absolutely horrendous situations and working 3 jobs (a full time job then doing Amazon parcel delivery as well as takeaway deliveries) just to make ends meet. And my own parents are still struggling themselves and my 68 year old dad still has to work full-time.

I'm more than happy to acknowledge I have it good and cushy. But I won't then go on to make smug comments about how I don't understand why others are struggling...that's being deliberately obtuse

How much is your mortgage per month?

I have recently had my biggest ever pay rise which has put me on 25k for 35 hrs a week. My partner is on similar but has a lower hourly wage (works more hours though). In total our household income is approx 45-50k ish? We own our home (via mortgage) and we paid for the deposit with no family help.
We go on at least one or two foreign holidays a year and frequently enjoy meals out and day trips to different places.

The take home on 25k salary assuming 5% pension contribution (the bare minimum you'll likely need for a comfortable retirement) is £1,731. Lets assume 2 x that = £3,460 household income.

You've said where you are about £15k would be 10% deposit on a starter home. Lets assume £135K mortgage, 5% rate, 30 year term. £725 a month.

Typical elec & gas for a 1 bed property is about £100.
Lower band A council tax in north tends to be about £1,600 a year so £130 or so a month.
Typical/low water bill for 2 people will be maybe £30 a month
Most will spend c £100 on other bills including tv license, internet, insurances.
Petrol or travel to work costs - for most people this will be at least £100 each (including insurance & mot) without assumimg car repayments.
Food & cleaning products for a couple of adults & 2 cats is going to be at least £400 a month, assuming shopping in aldi etc, no alcohol.

So thats £1,685 just to basically be housed & exist in the cheapest possible way in the cheapest part of the country. Leaving each of you £887 spends a month, to cover:

• clothes
• haircuts and beauty products
• car repayments/saving to buy a car
• gifts for christmas/family birthdays
• mobile phones & tech
• books/music
• subscriptions eg netflix/disney/spotify
• gym/swim other exercise costs
• holidays
• meals out or takeaways

Its fine, if you are naturally frugal.

Now imagine you have 2 dc. You need a bigger house, so that mortgage is £1,000. Oh wait, you live in the south. Now its £1,600, because a "starter home" requires a £300k mortgage - this is assuming £350k price for a 2 or small 3 bed semi or terrace in a less salubrious part of a town like Aylesbury. We won't get into where you are supposed to get the £50k deposit from.

Then you have a childcare bill of £800 a month (hint - you are fucked already and thats a cheap childcare bill).

Now add:

• school uniforms & shoes
• school trips
• school dinners at £3 a day per child, 39 weeks a year

• kids swimming lessons or cheaper activities like brownies/scouts/cadets

• kids clothes, food, gifts, parties,

Yes you can live a modest but comfortable life on 2 lowish incomes with no kids in the absolute cheapest parts of uk. But nowhere else, and certainly not with kids

@Shatenoeuf
Brava! I love when someone does the maths.

The COL crisis doesn't mean we are all in a critical living situation, it means that essential living costs have gone up far more than people's incomes so their disposable income is far, far less. Everyone feels the impact, but obviously those on lower incomes feel it more and then rely on borrowing more just to get by. People are unable to save for emergencies (boiler, roof, big car bill) never mind save for their future.

Sounds like you bought your house at the right time. You would be lucky to buy a house on your incomes.
I'm on a decent wage (but not 6 figure territory), single parent. I have a mortgage (which isn't too bad - NW too) but my income is eaten up with rising costs of food, fuel and childcare. I'm skint. I just seem unable to save anything. I don't spend money foolishly, clothes are usually second hand and rarely for me. If I'm lucky enough to go out anywhere, it's usually the pub for a couple of drinks and never more than about £30 including an Uber. That is a massive thing and a big spend. One evening out or getting my hair trimmed (it's short so can look unkempt quite quickly) is a big decision.
I'm glad you're not struggling, but don't bat off what doesn't personally effect you - synonymous with "let them eat cake" if you can't appreciate the difference in people's lives around you.

£100k doesn’t touch the sides anymore if you live in the south east and have children.

YABU. You live in the north, don’t have kids and presumably have a tiny mortgage.

Enjoy your privilege.

£2.3k after your 30 hours free? How is that even possible?

Bear in mind too op, your peers saying they cant afford life are probably thinking "sure we are ok now but how will we ever afford kids".

Its not 30 hours free. Its 30 hours funded, term only. The funding rates dont cover nursery costs so in most places in the south its just a discount on the bill. If you or your spouse earn 100k you dont get 30 hours worth, only 15. Again term time only, so only 38 weeks out of the 46 most employers require you to work each year.

Fucking hell , well done 👏

@tiggerbouncy maybe your friends could afford your life but have different tastes so are currently saving for a property in a nicer area or a bigger property to start a family one day and maybe when they search for foreign holidays their criteria maybe no less than 4/5 star accommodation only which is unaffordable to them.

It’s all relative. If you eat crap, cheap food, dine out in Bella Italia and go to the arse end of Bulgaria for your holidays, then you probably are fine.

So what would the cost be for you per month without the funding?

If you earn £100k you actually get zero hours and £0 tax free childcare under the age of three.

I don’t get the funding.

If I did it would be ~£1,100 Inc tax free childcare, so I’m almost £15k worse off a year.

how it’s unfair we enjoy so much

They seriously said this?

Are you spending most of your salary or are you putting a % of into a pension and extra % into savings in case of redundancy or long-term illness? A lot of people on 100k don’t feel rich because they’re building a decent pension and saving for kids’ university fees, and other milestones and also creating a cash buffer for emergencies. It’s a privilege to do that but if you add it together with a large mortgage it doesn’t leave you with the massive disposable income every month that others might assume.

Enjoy the attention you so crave. I guess they're right when they say money can't buy happiness.

I was the same as you before kids. Now I've barely a penny at the end of the month.

I’m interested in this - would rent for a similar property be less than the mortgage and associated insurance in the area? Ofc need to also take into account repairs and other costs a landlord would otherwise be liable for but I’m wondering what the cost of mortgage vs cost of rent is? A big part of the issue where I live is that you might be rent a property at vast expense but not have a high enough income to raise a mortgage even if the repayment amount (and associated costs) is not more than that £££ rent.

Raise the mortgage required that buy a similar property that is

Cause we don't all wanna live up north.

No joke some days as a student I felt more scared there than I did in London, especially if it was somewhere deserted.

The answer is very simple:YOU DON’T HAVE CHILDREN. That’s why you don’t feel the financial pressure, therefore your circumstances differ. You also are probably smart with your money but not having kids is the major factor.