Where can I save

[BankAccountLikeAColander]

I am cringeing writing this as I know we are very fortunate and earn way above the average salary in the UK and I know I'm going to get angry people lecturing me about how lucky and stupid I am. But we have very very little disposable cash and I'm just trying to understand whether that's just normal for our earnings or whether we have just spent too much on our house.
Combined salary is £165k. Mortgage is £1400 a month. Nursery just over £2k. Travel about £1k.
We live in the South East.

I would start by doing a statement of affairs
If you don’t mind making it public, we could give you an idea where to save.

As a rule of thumb though, you must pay yourself first, ie: set up a standing order towards a savings account.

Get paid in account 1.
From there, pay the savings on the day you get paid.
Account 2 is exclusively for bills. ALL bills. From mortgage through utilities to nursery and insurance.
Account 3 is for food and outings.
Account 4 is for personal use, I pay this one last.
HTH

Well... you don’t say how your salary is divided but if it’s 100k and 65k then you should be taking home 9,300 a month so even taking off the amounts you say you’ve still got about 5k a month for non mortgage bills and everything else. Where does the rest of it go?!!
I do sympathise to an extent as we live in an expensive part of the SE too; but our combined salary is less and our mortgage is more and we live decently and manage to save some each month so you must be able to.
Suspect maybe you’ve started to think of some things as essentials that aren’t... how many kids and what ages? Will you claw back some when they go to school or is private school on the agenda?
I do think you’re going to get a bit of a bashing but we all tend to live to our income even when we don’t intend to.

So I think I would want to look at my net income and whether you are putting enough away for retirement.

Say your net income is £8000 per month (might be more, might be less depending on income split and pension savings)

Your fixed costs are then £4,400 per month.

So you should have something around £3500 pcm month for other food. Realistically This is where the savings will be. An honest SOA (go through your bank statements, not on what you think you spend, and remember annual bills should be divided by 12 and included) is a good place to start. Money saving expert can be helpful, including the forums.

So your combined income is around £9k pm and you're spending close to £5k on bills, food and 'nothing'?

When you say 'very little disposable cash' could that mean that you are spending a lot on things that you see as essentials, but are actually discretionary and you don't have disposable income because you've already disposed of it?

It might be worth analysing your bank account and credit cards to see what you actually spend on each category - I'm willing to bet that you will be spending a lot more than you think on things like lunch at work, other food and drink out of the house, beauty treatments and hair cuts etc, clothes for adults, hobbies and all manner of other things.

Are you managing to put money away for annual and irregular expenses? Eg holidays, Christmas, insurance, broken white goods, car repairs etc, so you can pay this things as they become due?

Read this and go through the steps systematically.

Also you must get your partner on board, you both need to work together, or else one of you could be trying to control their spending while the other undoes all the good work, which is unfair and stressful.

Sorry, it's probably the Moneysavingexpert budget planner that you need to look at.

Sorry, I put my old salary - I reduced to four days at the start of the year so our net salary is just under £7.5k after pensions. Household bills (utilities etc are another £1k a month) so we have around £2k a month for the four of us. We save £700 a month. I guess that means £1.3k left and £600 of this on food. That means £700 a month left which gets really stretched if there are big car bills or any 'additional' costs. We just seem to have additional costs every month. Our garden is expensive to maintain.
We spend about £100 a year on haircuts between us. I probably spend £120 on beauty a year. We all desperately need some new clothes apart from the youngest who wears hand me downs.
I will take a look at all the links. I'm curious to know what other people of similar income spend/save. I suspect there are certain things we should downgrade cost of - but I haven't worked out where yet!!
Thank you for all your replies.

Also although I don't regularly buy coffee etc out, I don't see this as a big expense as pre-children it was do-able. Perhaps I haven't made enough of a mindset shift to adjust to what we can afford. It's probably easy for me to see others spending and think it's normal but possibly they are cutting back in other areas.

Maybe it's holidays? We will be spending around £3k on our holiday this year.

Not another of these threads.

You have 165k!!! You are richer than nearly everyone, you can buy almost anything, you don't need to worry about money ever.

That's as much thought as I can give your dilemma.

£1k a month on household bills? Presumably council tax, water, gas and electricity, insurance? How is that costing you £1k?!

Nothing wrong with spending £3k pa on holidays (we probably spend at least twice that on a much lower income, but we have no DCs and a tiny mortgage) as long as it's affordable, which it should be on your income.

You just have to include it in your budget and put money aside to pay for it. Also prioritise and if it comes to out that you can't afford £3k on holidays and other things you want/need, you need to adjust, so either cheaper holiday or miss out elsewhere.

£1k pm for 'utilities etc' sounds like a lot, but it depends what this covers, gas, electric, water, council tax, broadband/phone etc, mobiles, TV licence, TV service, insurance or is this extra? car insurance, repairs MOT etc or are these extra?

Ours for as, electric, water, council tax, broadband/phone etc, mobiles, TV licence and TV service are about £300 pm and £20 pm home insurance. Are you paying a lot for life insurance or things like critical illness insurance?

My monthly bills are £200. I'm not sure how you are spending an extra £800? Is your electricity gold plated?

Actually NameChanger22 that's £88k after tax.
I can't buy almost anything. My dc need new shoes and I need new clothes and I can't afford it. I have birthday presents to buy that I can't afford. We also have private health insurance which is pretty steep but seems essential these days.
Clearly I'm overspending somewhere - I'm just trying to work out how I can change it. Moving house is a pretty drastic and expensive option but maybe that's what we need to do.

Council tax is £350 a month

You're saving £700 a month, spending £3k a year on holidays and won't buy your children new clothes and shoes? You've got your priorities wrong there. And of course private medical insurance isn't essential!

I genuinely don't understand how people can be intelligent enough to earn that kind of money and yet can't work out how to spend less. And this isn't sour grapes, our household income is in the same ballpark.

My income is 13k, tax is 1k, childcare is 3k. We live on 9k a year and we can afford clothes and birthday presents.

I would love to know what job you do that doesn't require a basic level of intelligence or common sense but pays a ridiculous amount. Are you a model?

You do have the money for clothes and shoes ffs. You're saving £700 a month - what are you saving for that's more important than clothing the kids?

It's unlikely to be necessary to move house. Your mortgage looks very affordable on your income, so if your house and area suits your needs, park that idea for now. Moving is expensive, especially if you need to pay stamp duty, so it could take a long time to benefit financially from a move. Council tax sounds like a lot, but would it go down significantly if you moved to a cheaper area or house? Ours is less than £100 pm, but that's in a band A house.

What do you use the private health insurance for, how much does it cost and can you get it cheaper? Are you all in good health and what would you do if you didn't have it?

Is there a reason why you can't use the NHS? I've often read that it is possible and can be cheaper to not have private health insurance, but pay to go private if you consider it necessary as it's often not as expensive as people think.

What are you spending on your garden?

Water is £50 a month
Electricity and gas £200
Broadband and phone £60
Mobiles £100
Petrol £120
Health insurance £150
So not quite £1000 but once you add in home insurance and the 'additional' bills that seem to be monthly it's easily £1k a month.

But clearly the issue is that you can't afford to save £700 a month

Nobody should be in a position where they can't afford to buy children shoes because they are saving £700 a month. You flex your savings to meet your immediate needs.

The garden is overgrown and we pay £1k here and there for help with hedge cutting, new fencing etc.
To get the windows washed and gutters cleaned was £120 last time we did it. (I'm just leaving them dirty now as I feel that's too expensive).

Get rid of the health insurance - total unnecessary as we have the NHS.
Get cheaper mobiles - rolling contracts cost £5 a month.
£200 a month on gas and electric??? - change suppliers, you are probably paying at least twice the average household.
Broadband and phone - mine is £35, change that also.
Petrol - do you really need a car?

Well, have you ever or recently done a price comparison for gas and electricity? If not start by doing that. Also, do you use lots? Are you mindful of electricity consumption, do you heat a whole house even though 3 rooms are empty? That kind of thing.

On private health insurance - I don’t have any, so far the NHS has served me well, referred me to specialists as needed. I pay for dentist and physio out of my own pocket. I did look at insurance options for those but couldn’t find any where I was likely to recoup more than I had paid out! So I just pay as I go.

Turn the heating down/switch providers, buy cheaper mobiles (can easily get decent ones with good data for less than £20 a month), cancel your health insurance, spend less on food. That'll save you a good £300 a month without much effort.