Cost of living

[Blush301]

Looking for a bit of commiseration and wondering if others are experiencing the same. My husband and I live in Bath (admittedly not the cheapest place but certainly not the most expensive) have a joint income of around £100k and have one child in nursery 3 days a week. We live a relatively comfortable life compared to others but certainly not extravagant by any means. We have takeaway coffees and lunch or brunch out a couple times a month max, but that’s it really. At the end of the month by the time we pay all our bills and food and any other house maintenance costs we have nothing left or are in debt and have no savings. I am terrified of putting our heating on for too long due to the cost so we are all sitting here freezing most of the day since we work from home. Also just had an email from our nursery that the daily rate is going up by 12% in January which will add an extra £100 a month to the bill. We will have to remortgage next year which will probably add another several hundred per month. I would like to have another child but at this rate just don’t see how it’s feasible. I am constantly worrying about money and it’s having a strain on our relationship. It seems all of our peer group have much more money than us, despite having similar jobs and in a lot of cases the wife not working full time- expensive holidays abroad, building house extensions etc. just frustrating and depressing that we both work hard, have good jobs but can barely afford to get by. Is anyone else in the same boat!?

I have popped back to check your responses.
I was expecting you to say your mortgage costs were £3,000 per month or so. A couple eating minimum wage would need to find £850 minimum to rent a tiny terrace house as and most couples I know pay £1500 for a decent semi.
Your housing costs are low.
Your child are bill is reasonable.
I used to spend £200 a week in Waitrose, I think about the thousands of pounds i could have spent or saved elsewhere , it was fairly easy to change my mindset and spend less than a £100 and we still have a healthy diet.

How much is £100,000 after tax ?
it will depend on how the earnings are split. Seeing as the childcare is 3 days a week - its possible that one parent is only working 3 days a week. It could be though that both parents work 4 days a week and take it in turns to look after the child as the other works. It might work out better tax wise if they did this.

If one earns £35k and the other £65k they’d be taking home £6210 between them without deductions for pension. So with mortgage at £1400 and nursery at £800 that’s leaving £4010. Council tax at £220, utilities at roughly £520 for gas, electric, water, internet, phone, would leave £3270 each month.

TBH 1400 a month mortgage is really not high, the house opposite me is a 3 bed post war semi and renting for £1595 a month. My DS has just moved from a 3 bed to another smaller place just to reduce the rent from £1400 to £1050
Nursery fees are around £70 per day, so you're coming in at £110 less than average.
Do you want to prioritize and have savings etc though, holidays abroad?
If you do then sit down and spend time making a budget
www.citizensadvice.org.uk/debt-and-money/budgeting1/work-out-your-budget/ this is a great budget tool and it will automatically change expensive to monthly, 4 weekly, weekly, annually for you so it all synchronizes.

Having more than one bank account is useful - as at the beginning of the month or on a weekly basis you can set aside pocket money for you both, this would cover takeaways, coffees, brunch etc and once it’s gone - then it’s gone. You can set up a simple standing order to come from your main account to the pocket money account each month or week. I suspect that your spending on these additional sundries is way higher than you realize. I’d put money on sundries for coffee and brunch coming in at no less than £4000 a year.

@MikeRafone thanks for this. Interesting to know our housing costs are fairly reasonable compared to others as always assumed they were higher.

my husband and I both have separate accounts which I think we’d both like to keep, but I like the idea of doing this for myself.

I’ve gone through my bank statement today and petrol and pet are costs adding a lot at £250 each, plus another £100 in train/bus to work. Food comes in at around £850. I think what’s also thrown us off recently is additional maintenance fees- boiler service, plumbing issue and roof repair all coming in at the same time, would be good to build up a pot of savings to have as a cushion when these things happen.

Ok so your petrol and pets cost is high, anything you can cut from there? Your food bill is very high, that’s around £200 a week. You should easily be able to save at least £300 a month there. For comparison our family of 2 adults, one toddler and a baby, including formula, is about £110 per week and we don’t skimp on food.

I thought your mortgage would be double that tbh for you to be struggling.

I'd be going through the bank statement with a fine toothcomb because I suspect you're wasting an awful lot of money here and there.

Consider using an envelope system for treat things. So, if you decide to allow 100-200 a month on treat stuff, just take that out and put it in an envelope in cash. Be strict on what a treat is before you start. When it's gone, its gone.

@MikeRafone £110 a week on food! Wow where do you shop can I ask?

I do not understand how two adults and a toddler are spending £850 a month on food. My income is low as a lone parent/carer. I don't spend more than £60 a week and maybe 70 once a month if I need to top up washing/cleaning products. It is me and one 12 year old. We eat well and I meal plan and often batch cook. I do a list every week and stick to it. Aldi with the odd item from Sainsburys. I think you need to look at that. I imagine you could shave at least £200 off that bill.

You've overexposed yourself on outgoings ( whatever they are) and haven't accounted for price increases in interest rates and energy.

Keep your living costs as low as possible is what I've always been advised. I have a low mortgage ( could take more if I wanted but don't)

I'm a single parent to teens on 45k and manage just fine. Yes the heating is on and it's expensive

Cut your cloth, you can't afford your lifestyle right now

Same! My shopping is £70 max a week with hungry teens!

I never understand how people spend £100 plus more with the same size family

To add to other post, I have been a single parent since they were in nursery so I do feel your pain of double nursery fees but it was still doable as all my other outgoings were so low

A mix of Asda and Tesco. I really can’t understand how you could spend £200 a week for a family of 3.

I think your situation is very very common. As in 100k household income does not mean you’re rolling in it by any stretch. And it only takes for the car to need work, boiler to break and then you’re dipping in to savings.

After reading your posts OP everything seems very similar to our standard of living, but the one thing I would change is to stop shopping in Sainsbury’s and do the bulk of it at Aldi, especially stuff like loo roll, washing stuff, cleaning stuff. The food is no different in quality, I still get bits from Waitrose don’t get me wrong but get the bulk from Aldi. It’s substantially cheaper.

Are you someone who also believes that young people could afford a property if they stop eating avocados?

When people say young people eating avacados - it's about the mentality - how much do you fritter on small stuff , on none essential stuff, on stuff that previous generations didn't expect to have

Frittering £60 a week between the age of 20 and 30 is over 30k house deposit - and sone here claim that you need at least 60 to go out one night a week whereas others manage on 20 by scaling down their expectations

Similarly - since the op doesn't have any big expenses yet is spending way more than average then she is spending a lot on smaller stuff

How might we account for someone losing 2k a month ? 500 a week ?

The habit of beauty treatments- people pay between 10 a quarter and 500 or more a quarter on treatments if they have hair with fancy dying, eyebrows and nails and facials

new clothes weekly rather than yearly

Disposable treats or far flung holidays

I was expecting to read a post that said your income was £30k but to be earning £100k you must have some significant outgoings. We don't have a mortgage. My husband is retired but too young to have for his pension. Our income is only circs 50k a year but we have no mortgage. We live off our rental properties income and interest from savings and investment so the amount can fluctuate. But we don't have big holidays anymore but we enjoy life and don't worry about heating costs when it's cold. I am struggling to see how £100k income isn't sufficient. You must be clearing £6k a month!!

You may get some negative feedback as lots of people could only dream of that income. We had in excess of that income when my husband had his business. But we soon adjusted once he sold the business and as my mum says "cut your cloth accordingly" which we did. Neither of us work now, now debts, no finance, no mortgage...and life is good. If you have equity in your house maybe move to cheaper house to reduce your mortgage or pay it off?!

However, it's easy for us to sit here being keyboard warriors and commenting on your life but I must reiterate that £100k income is a very healthy income.

Putting 'end of' at the end of your post doesn't mean you're suddenly the fountain of all knowledge on the topic.
On a combined income of £100k childcare and mortgage should both be in relatively easy reach if (and it's a big if) the rest of the household's spending isn't OTT.

You run separate bank accounts this might be the problem.
Savings should be one of your direct debits or standing orders each month, transfer to one savings account count or two separate accounts.

Consider each transferring your share of the bills for household expenses into an account specifically for household expenses.

£800 a month on food. That's insane for 2 adults and toddler

Unless on raw dog food which is £25 a week ?

If so then Dry kibble if fine

£200 a week is a lot for food

£100 for Aldi is quite possible

Maybe the OP is like the families in Eat Well for Less. Spent 2 or 3 times the national average on food, never out of the supermarket and taking too much out of their budget, leaving them feeling their money wasn't covering the other things their incomes suggested they should be able to afford?

Not sure where you are getting this from?

I said your nursery fees were £110 below average

but I haven’t anywhere said what I spend weekly on food shopping

I thought I’d read in one of your previous posts there wasn’t any car expenses- but if your purchasing fuel then MOT, service and insurance is likely to be another cost. cars can easily eat £300£400 a month in total expense

Try looking at percentages.

I don't think you have said what the take home pay is, so let's say it is £6000 a month.

£1400 mortgage is under 25% of take home pay, so that's fine.
£800 childcare is a bit over 13%, so sounds low, I would have expected that to be higher.
Housing costs... utilities, council tax, parking permit... that is probably under 10%.
Essential travel costs... to/from work, to/from supermarket. Look at what that is costing.

With larger income, you often have larger expenses, so looking at percentages can sometimes help to identify areas where your spending seems disproportionately high, or low.
Some areas though you don't want to do on percentage, such as food, as someone on low income would spend a high percentage on food, whereas someone on high income their food spend should be a smaller percentage. This is essential food, not going out to restaurants, not shopping at a high end store when there is a budget store around the corner.

Track everything you spend, to the penny, for several months. Everytime anyone pays for something, write it down... what it is, how much. Then you can apply categories.

Don't forget that somethings only occur once a year (car service and MOT), insurance premiums paid annually, and you may have some that occur once every few months.
You can use a simple spreadsheet to track, or a notebook, or whatever you find works... get a receipt each time you buy something and collect the receipts. Write the spend down as soon as possible following the spend... that helps you know what you have spent and reminds your brain that you have spent money, as tap card does not register much pain in your brain. If you need a spreadsheet for tracking, you can find templates online, such as in free budgeting courses, Meaningful Academy: Financial Foundations.

You may have some large expense you have not mentioned, but maybe the problem is that you have a lot of small expenses that you are not tracking, so not aware they are happening.

I agree, £800 a month on food seems very high, we average more like £80 per week for the 3 of us. I think a spreadsheet will help you see where your money is going, but perhaps you could also look at doing a meal plan? It doesn't have to be exact for each day, but plan a number of meals for that week and then decide what you fancy when. We do online shopping with Tesco and I find that helps me organise what I need, rather than guessing things that then don't work together to make meals. It also means I can compare prices and offers more easily and am less tempted to pick up things on a whim.

Sainsbury’s is very expensive, more expensive than Waitrose for many things!
You have a Lidl in Bath, try shopping there.
£250 on petrol plus £100 train/bus? How on earth do you spend that if you both wfh? What commuting?

Track everything you spend, to the penny, for several months. Everytime anyone pays for something, write it down... what it is, how much. Then you can apply categories

Good advice, but remember that most people will already have this information as most people spend mostly on card or by direct debit these days, so information for the year to date (for example) is readily available from accounts and can be downloaded and categorised in spreadsheets. No need to start now or 'write things down' the information is probably already there.

Don't forget that somethings only occur once a year (car service and MOT), insurance premiums paid annually, and you may have some that occur once every few months

Also good advice. People often talk about their budgets being derailed or savings wiped out by 'unexpected' expenses, but a good proportion of these are things that will happen with some regularity, so should be planned for and money put aside that doesn't count as savings that will build up and be available for emergencies etc.

You mentioned you have separate accounts-which of course is fine and makes sense-but would suggest you open a joint for all regular household expenses and then each pay in your share each month.

To help us budget (and we do have a joint account for everything, which works better for us) I transfer our wages out each month into savings, then bring money across as needed to cover bills/shopping etc. I also have a breakdown of every single fixed expense each month, tallied up to the penny and because our income can vary a bit month to month, as soon as I know income, I work out exactly how much is left over after the bills-then budget for food, activities etc accordingly. I also know what I could immediately cut (nice to haves) if I needed to.

I have a budget per day with energy usage (we pay by direct debit, but I do keep an eye on it)-I stick to this (£10 per day max)-this will generally cover 4-5 hours heating, oven usage, showers, washing machine and general electricity usage etc-so that if there is really extreme cold weather, I can go over the limit to keep us warm and not worry too much. I know every house is different, but maybe this would help you to do similar (even if it is a different per day amount?).

Our household income is a lot less than yours, but principles are the same. I completely agree with PPs most people will always adjust spending to their earnings.

You could definitely look to your food shop as a good starting place. We don't spend that much for 5 of us, and we eat healthy, nutritious meals, with a few treats thrown in.

If you add up all of your absolutely essential costs each month (leave out food for now), how much does that leave you? (You don't need to post it-but for you)

Time to downsize your home and life OP. You could have more money but you’d need to change your lifestyle.