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Original poster

disposable income- How much do you have?

51 replies

kbaby · 08/07/2007 21:47

Heres the background. DH wants to buy a new house but it means our morgage would increase from 100k to 185k. I think we cant realisticaaly afford the extra payments ie £300 extra per month he thinks we can.

It would leave us with disposable income of £800 between us. Bearing in mind we have to do up this house and should MIL be unable to look after DC possibly pay child care.

Is he barking in thinking we could go for this house or am I just trying to find excuses not to move?

OP posts:
Twinklemegan · 08/07/2007 22:08

Ah, I see Bozza - very sensible btw.

DrNortherner · 08/07/2007 22:11

We only have £45k as dh is a footballer and we have just bought another pad in San Tropez. It costs a fortune to staff it.

bozza · 08/07/2007 22:12

Well twinkklemegan I suppose we have reasonable disposable income (although it disappears fast) but I am very frugal and careful on groceries and such which therefore increases our disposable income. I don't really know how you could make £80 go between so many different items tbh. This month I will have bought birthday presents for my Dad, FIL, a friend's DS, two of DD's friends and one of DS'f friends. Plus cards for all, plus a card for one of my friends, plus two anniversary cards. I bet that is £80 alone.

twinsetandpearls · 08/07/2007 22:13

These threads always end in tears.

Twinklemegan · 08/07/2007 22:16

Well it is a guesstimate Bozza, but I suppose things just don't get bought. We're lucky that neither of us have big families so there aren't many presents to buy. We're pretty frugal on the shopping front too - I really don't think I can cut it down any more and still give DS a healthy diet. It is do-able, but obviously nothing can be saved which I hate. Our luxury, which is entirely our choice obviously, is for DS to have a day a week in nursery which gives DH a break from SAHDing and DS loves it.

CarGirl · 08/07/2007 22:16

issue of disposable income - what are essential food costs, I choose to spend more on buying lots of fresh fruit & veg (usually organic) is that essential or luxuries? All of our "spare" money goes against our mortgage as we're saving for an extension and there is a lot of things we go without to do that but we do eat well, I don't splash out food shopping but I don't worry about how much the bill is????? Our CTC payment is above the minimum so officially considered on a lowish income but we're not struggling unlike many others. We don't spend much on christmas/birthdays etc - again our choic, we don't go on holiday because otherwise we'd never get the home improvements done (kitchen and bathroom falling apart), I drive as little as possible to save on petrol etc etc etc etc etc

VioletBaudelaire · 08/07/2007 22:17

Depends on how often OK or Hello want to photograph us.

Twinklemegan · 08/07/2007 22:19

Actually thinking about it, I should include the day in nursery with the disposable income. So that would make it around £160.

FrayedKnot · 08/07/2007 22:28

In the past on a thread like this we talked about mortgage payments as a % of your total income.

It might be helpful for you to look at it like that?

IIRC the recommended % is not more than 28% of your net income.

How do you present and proposed payments look in % terms?

bozza · 08/07/2007 22:30

Yes twinklemegan I agree that childcare when both parents are not working should count as disposable income. Mine is all for when I am working so doesn't count (ie DH also working).

Twinklemegan · 08/07/2007 22:33

But then, to be fair, DS is also in nursery so that DH can take any work that comes up in his line. Places are so limited round here that if we hadn't got a foot in the door we'd be stuffed if DH found a suitable job in the future.

adorabelle · 08/07/2007 22:56

To answer opening thread- we have No disposible income at all.

Me- full time mum. Dh- at uni doing Phd & a bit of teaching on the side.

Very tiny contribution from the state which pays a wee bit towards our rent and also exempt from council tax as we have a household income under 10k.

Dd is starting nursery in September, 6 hrs a week which will go up 10 in Jan, so I can begin a cleaning job i've got in place.

Dh is 22 (i'm 30) and all he's done for the last 3yrs is work his arse off, doing a biology degree and a part time job too.

I know that in the long run we're all going to better off as dh will have a good paying job to go straight into, at this moment in time though i'm with dd whose now 3 and it seems like a long old slog.

teafortwoandtwofortea · 08/07/2007 23:15

At the moment I get paid £4 (yes 4 whole pounds!) more than my bill for childcare so err, not a lot...

Kbaby - hve you gone to bed or run away?

I answer to your question - if it meant you'd have to change your lifestyle drastically and you'd have to give up a lot of the things you're used to and make you happy then don't do it. simple - sounds like your DH is ling in financial la-la land tbh.

elkiedee · 08/07/2007 23:19

Has your dh taken the latest interest rate rise and possible future ones into account? Before you buy a new house perhaps both of you need to sit down and go through what you spend/need to spend/could cut back on and whether you want to.

NotQuiteCockney · 09/07/2007 06:06

Yes, these threads always go like this:

OP: I am so unhappy, I only have X to spend on what I like.

2nd poster: OMG how very dare you, I am scraping by on X/2.

3rd poster: that's not scraping, I am on X/4

Etc.

People namechange to discuss money, more than they namechange to discuss sex. I am Foreign, so find this a bit weird, but there ya go.

chocolateteapot · 09/07/2007 07:04

If you look at a mortgage calculator (charcolonline have one) 85k at a rate of about 4.5% interest only works out to just over £300 a month. But the cheapest 2 year fix is at least 5.5% and the majority are around the 6% and about to go higher due to last weeks interest rate rise. So the increase is going to cost you a fair bit more than £300 unless you can transfer your current mortgage fixed at a lower rate. But even if you can do this at some point you'll come off a low fix won't you ?

Also, interest only is really dodgy long term unless you know without fail that you will be getting money in the future. I'm a bit of a hypocrit as we are interest only, but we are in a very lucky position where we know we can pay it off without doubt. I think the property market is in for a rough time ahead and if you buy now you will probably be buying at the top of the market, not a problem if it's a long term home but something to think about.

And you need to factor in the costs of childcare in case your MIL can't do it anymore, plus of increased interest rates further down the line. Also, what if you or your DH are made redundant, would you be able to financially survive if this happened ? Do you have any money put aside for emergencies ? I know that is a luxury that a lot of people can't afford but before you consider increasing your mortgage by that amount I think you need have a safety net.

usandnosleep · 09/07/2007 07:20

I understand what you're saying Kbaby. if you don't have to move I wouldn't IYSWIM.
We do have quite a bit of disposable income but I wouldn't want that spent on an unnecessary move, the rest sits in the bank until we need it.
It looks like my DP will be out of work for a short time (self-employed) so the money will be used for that.
You sound like you have a good buffer at the moment and if I were you I would like to hang on to it. Who knows what is going to happen in the housing market.

Original poster
kbaby · 09/07/2007 10:37

Bloody hell. I wasnt expecting to be shot down. I was just looking for some advice.

Frayed not, usandnosleep and chocolateteapot, thank you your advice was very helpful.

OP posts:
mumblechum · 09/07/2007 10:38

Oooh, Frayed knot, that's interesting, that mtge payts should be 28%, but is that of gross or net income????

FioFioJane · 09/07/2007 10:41

most people have to have a mortgage that high on a first buy these days

mumblechum · 09/07/2007 10:42

I suppose ti must be on net, logically which means that we're paying about 55% of our net on mortgage payts.

EEEEEEEEKKKKK

anniemac · 09/07/2007 15:13

This reply has been deleted

Message withdrawn

Chipstick · 12/07/2007 14:26

I have to stay having never visited this topic before I'm shocked how a simple question has being received. If you don't like discussing money just don't post a reply!

In an ideal world when considering lending your total outgoings not including fod/petrol should be 60% of your income.

Will the new house be larger? If so, the council tax and utility bills may be higher as well.

Original poster
kbaby · 12/07/2007 22:07

Chipstick, Thank you that was helpful. I guess the next thing I need to do is find a decent morgage rate.

OP posts:
paddingtonbear1 · 12/07/2007 22:47

kbaby, we did something similar to what you're proposing a couple of years ago. we now have a 175k mortgage which costs us £830 a month (on a fixed rate). some of that is interest only and some repayment - that figure doesn't include the extra for the repayment vehicle, which we also have. The extra bills were a bit of a shock - council tax jumped up a lot as did utility bills (our heating system is crap but we can't replace it yet)! so you need to look out for this. we can afford it at the moment but I sometimes regret it - think carefully! we don't have any contingency money at the moment which does worry me, but things should be a bit easier when dd goes to school in sept as our childcare bills will halve!