Monthly outgoings - huge

[SouthWestmom]

So how do people not on a high salary manage? I always think on paper we look amazing and actually we live in a normal house in an average area, drive a normal car (3 years old) and can't afford holidays every year.

We recently remortgaged as we needed a better deal and at the same time I added everything to the joint account - bills, food etc.

We each pay into it and out of anything left have to cover clothes, gifts, meals out, petrol etc.

The joint account comes to 4026 going out.

This includes mortgage, council tax, house, life, pet, boiler insurance.

Mobile phones on contract.

Childcare.

Utilities.

TV and broadband (basic package but also NOW tv)

Activities - this is high at £200 pcm

Uni costs - 200

Savings - 500 (new, don't have any, will see if they last)

Car £150

Pension at 30

So I'm not after sympathy obviously, but even taking out the non essentials it's £3k.

How is it affordable for anyone? It's crazy.

How much is your childcare? That'll be a big expense. Have you seen a broker about the cost of your life insurance? We insure both DH and I for £50 a month

Affordability obviously depends on what's going in! Do you qualify for tax credits?

Obvious routes to savings are making sure you shop around for best deals on utilities and phones/broadband. You don't mention House/contents insurance but not having these might be a false economy. Do you have a TV licence? Food economies can be made if you have Aldi or Lidl. Put your savings in a cash ISA so you can retrieve them tax free.

How much are your mobile contracts?

We only recently have started to pay for net flicks before that we just had freestat or freeview.

Thank you for answering. Mobile are 4 contracts at 100 through Tesco, all capped which gives peace of mind.

Childcare isn't bad at all - it was when they were very small. More like 120 now.

I just was so shocked that even taking savings out the equation, it's 3500 a month for a fairly average life.

The thing is, it’s not an average life. You own your own house, run a car, pay childcare, put money into savings, do activities, pay for someone to go to uni, pay for a pet... many many people can’t afford these things at all!

That's really interesting Ecureil, thank you. Maybe I'm skewed by friendships as we are definitely very average/lower compared to them.

Savings is new, first month we are trying.

I guess I mean not 'poor me' at all, just bloody hell life costs a lot.

I agree with Ecrueil in that there is a lot of discretionary spending in your summary. It depends on your expectations of life, an element of keeping up with the Jones', your location (high accommodation costs) and as I say your income. If your outgoings of £4K are based on income of £4.5k then no problems. If your income is £3k then you are in for a world of pain. But do recognise that as homeowners with jobs, your own transport, access to the internet, children and pets you really are on the upside of life.

Home I agree, honestly. The house is in an average, semis, non professionals type area, and yes we are spending on activities and trying to save.

I guess I'm just shocked, putting it all down, how much stuff like insurance, utilities etc cost before the 'fun' stuff.

I'm not after pity btw at all. Just thinking wow.

Yes I know what you mean, we have a fairly high household income and I often wonder why we can’t afford exotic holidays etc. However we have a high mortgage, the DC do lots of activities, we have plenty of nice days out, don’t scrimp for anything, if the dog is ill we’re safe in the knowledge he’s insured, if the boiler breaks ditto... so we’re actually very very lucky.

I complain about the cost of our gas and electricity but you know what? If I’m cold I switch the heating on. If I’m still cold I turn it up. It’s no wonder it’s high! Likewise water. Our DC bath every night, DH and I shower every day.

This includes mortgage, council tax, house,
Not much you can do about these except make sure you are on good deals for your mortgage/house insurance etc. Consider moving to a more affordable property?

life, pet, boiler insurance.
I don't have life insurance, pets, or boiler insurance. I get away without life insurance as my pension will pay out a fairly big sum if I die, which will probably cover the most of the mortgage. If the boiler breaks I'll pay to get it fixed on a credit card.

Mobile phones on contract.
Get cheaper mobiles on PAYG.

Childcare.
Not much you can do about that. I'm lucky enough to have flexible enough hours to look after the kids myself. Can you get a reciprocal arrangement with friends/family by any chance?

Utilities.

TV and broadband (basic package but also NOW tv)
Get rid of the pay TV package and just have the free stuff. I haven't watched live TV in years, I don't even watch the iPlayer so I don't have a TV licence!

Activities - this is high at £200 pcm
Do less paid activities, do more free stuff. Kick a ball around the park, go for bike rides and walks etc.

Uni costs - 200
Buggered if I'm rich enough to bankroll my kids through uni sadly :(

Savings - 500 (new, don't have any, will see if they last)
See how that goes!

Car £150
Make the car last longer, see if you can do basic servicing yourself?

So I'm not after sympathy obviously, but even taking out the non essentials it's £3k.
There's millions worse off than you, but people have a way of living to their means. Rule of thumb is, if you want to save money, you have to make sacrifices to your living standards. The real question is, how much of a drop in living standards are you willing to accept?

How is it affordable for anyone? It's crazy.
I earn less than your monthly outgoings... How do I afford it? Smaller house, less luxuries are probably what it boils down to.

Activities - are they essential or can they be reduced?
TV/broadband - shop around, you can get freeview and cheap broadband.
Mobiles - do you actually use the things in the contract? I quit having a contract years ago and spend approx £6 pcm on my phone.
Utilities - shop around
Insurance - shop around. It's often cheaper to start a new policy than it is to renew. Discovered this recently with my car - it as £165 for new policy, or £215 to renew.

A lot of your outgoings are optional or fancier than most people's
so your mortgage must be massive which is the problem (ie house prices are stupid)
and is your car on finance?, so perhaps newer than the average or is that petrol etc?
£500 on savings (sensible but entirely optional)
£200 - what are uni costs?
£200 activities
TV package (netflix and freeview costs us £3.99 per month and its more than enough tv options)

You're choosing a more expensive lifestyle.

. Mobile are 4 contracts at 100 through Tesco, all capped which gives peace of mind.

So - giffgaff for a fiver, and second hand phones....?
Are you spending £400 on mobile phones.

Well, don't know what your mortgage is but presumably you won't move house and you've only just remortgaged.

Other than that, it's a case of watching your pennies and the pounds will look after themselves. So have a look if you can save £20 here, £50 there for example with utilities, groceries, phone bills, ditching fancy tv packages etc you might as well find that you'll be able to save several hundred pounds per month.

Once you've got savings, you might also choose not to pay things like boiler insurance - they always work out very expensive in the long run but need you money set aside in case sth goes wrong.

Don't know what your car is, but a 3-year-old one sounds pretty new and a treat to yourselves as does keeping a pet (which again is a luxury - 17k over the pet's lifetime on average apparently).

So perhaps your lifestyle is a little nicer than you think? Tbh, though, I'd be cutting back to invest more in your pension- £30 sounds woefully inadequate unless you're ok to work well into your 70's.

It depends a lot on what you consider to be essential expenses. We have a higher income but lower outgoings than you OP, because we do without a lot of things on your list. No pets, no car (city centre living), no childcare (moved to be near parents), no paid TV, no activities, no phone contracts. Council tax and utilities are low as it's a small modern flat (we haven't put the heating on yet this year). We have nice holidays but only because it's a priority for us and so we cut down in other areas. Other people might prefer to have a bigger house and car than overseas holidays.

I spent years feeling the same as you (and still do to some extent). We had a relatively good income but always seemed to spend it all but never seemed to have money for nice holidays, fancy clothes etc.

We then had a fairly steep cut in income and had to really prioritise our spending. I found that we really looked we were in the habit of spending lots on small unnecessary things that we didn't really get a lot of joy from but that over a month added up to a significant sum. The main issue for us seemed to be food when we were out- we realised that most weekends we were eating at least 2 meals out (mainly lunch) that we didn't really enjoy that much but just happened to be convenient. Not to mention all the coffees/cake. We had to become much better at timing when we go out so we can eat at home, or taking a picnic if it's not too cold.

Have you looked at the smaller, cash expenses to see if you also have some 'habit' spending that you could cut down without having a big change in lifestyle?

How much is the mortgage?

OP is probably locked into the mobile contracts. Once the handsets are paid she could get a sim only deal but until then she is probably stuck with it.

I agree with you OP. Yes, it is possible to pare everything down to the bone, but if you do it sucks all the joy out of life. Doing normal, nice things, which are not imo massively extravagant (sky tv, phone contract, paying for kids sports clubs, the odd meal out) seem to make life really expensive.

Holy, may I ask how many 'screens' your Netflix contract allows for? We're currently paying £7.99/month for 3, which seems high.

mortgage, council tax Nothing can be done about these unless you want to extend your mortgage to bring the cost down.

house, life, pet, boiler insurance Check your boiler isn't already covered by your house insurance. Only 1 policy will pay out not both if you need to claim so if you already have it covered then get rid of that specific boiler one. Check you don't have life insurance through work. If you do get rid of your extra policy.

Check your pet insurance is the cheapest available. What do you have covered? If it includes a replacement pet in the event of death then get that bit removed as you may never want a replacement anyway. If it includes things like artificial limbs being provided and £10,000 worth of surgery think 'do I really want to put my pet through this if its 10yrs+' and get rid of that bit if your pet is older. Mine only have 3rd party liability and its around £25pa. I found putting a few hundred a year into a separate bank account has more than covered any veterinary treatment they have ever needed so don't need any extra insurance.

Mobile phones on contract My phone is £20 a month contract (Samsung galaxy note). Unlimited texts and phone calls to the same network (we all have the same contract/network at home and DD's phone is only £6pcm for the exact same package as mine she just has an older phone an I-phone 5) and I have more internet data than I can possibly use in a month. Check you have the best deal going.

Childcare This is always going to be expensive but will eventually reduce. If you use a nursery would a childminder be less expensive?

Utilities You need to make sure you are on the best deal. Phone your utility company and ask them specifically if you are on the best deal.

TV and broadband (basic package but also NOW tv) We only have a basic package which is more than suitable. If the dc don't know Disney channel exists they cant miss it. We also have TV/Broadband/Mobile phone package. All in for broadband, 3 mobiles and tv is just under £60pcm.

Activities - this is high at £200 pcm Mines about the same to be fair.

Uni costs - 200 Is this you or an older child? If its a child then point them in the direction of the University job shop. They offer plenty of part time work at the University itself and surrounding areas from businesses. It would be easy to earn £200pcm to replace this. If its for you then is it transport/parking/supplies? Is there alternative cheaper parking? Can you use a different transport that's a bit cheaper (search online for alternative routes) or buy a monthly pass?

Savings - 500 start with £300 to give you a better chance of saving it. If you can easily afford it then increase it to £500. If you are just about coping on £300 then any savings are better than none. You don't want to overstretch yourself because you will resent saving it and possibly give up altogether eventually. Little and often is better.

Car £150 This is similar to mine.

Pension This could form part of your 'savings' as that's exactly what it is. I would lump pension and savings into the same pot myself rather than a different amount.

Chester just 1 - got fed up of the kids going off ensconsing themselves watching tv with a tablet. Find it works better and viewing is more social. (We only have one telly through choice)

I totally get that when you are working hard in (wellpaid) work or even not wellpaid work tbh you want to feel like you can enjoy things and can be too exhausted to think about what you really want and need.

I don't necessarily think a lot of the trappings like Tv packages, fancy tech etc are "nice, normal" things. They're just stuff thrust at us to keep endstage capitalism going. To me it sounds like OP has lots of options and the luxury of choice on how she spends her income.

HolyShet "endstage capitalism" - what is that? Lovely to think it may end sometime! 'must have' stuff, stuff, stuff. Buy buy buy. Bye bye bye, planet

Can your son/daughter not get a job to reduce the £200 you need to subsidise them?

Yes, to shopping around for utilities, insurances, etc. Boiler cover can sometimes be added on to home insurance for a trivial amount. Likewise mobile phone insurance can be added to home insurance far cheaper than taking out the insurance add-on attached to the contracts.

Yes, to stopping the life insurance - lots of people have large enough death payouts as part of their pension or "death in service" cover provided by employer.

Can you/your spouse not re-arrange working hours to reduce the childcare you need?

At work so just checking back quickly so I don't look rude. Some really interesting points made, and I will reread and re evaluate where we are on the 'normal' scale.

Mortgage is huge thinking about it because we are older parents and married later so have only 13 year not 25 to do it in. (1500)

Phones are £100 for all of them, not £100 each.

I really really am not looking for sympathy and I'm very interested in the answers, it helps get a bit of perspective.