Would you be comfortable with these figures?

[Notanotherfuckingusername]

This thread probably isn’t aimed at massively high earners because I do understand that some people want to be able to save X thousand per month or they won’t be happy. Neither is it aimed at people who don’t have anything left over at the end of the month.

But if you’re a middle of the road £50/60k income family not living in a crazy expensive area - would you be happy with these figures?

Income £3500
Bills including mortgage/insurances/tv licence etc £1777.19
Food, fuel and entertainment £800
Savings for things like Christmas, car insurance, MOT etc £562

It only leaves £300ISH per month.

We’re considering moving and trying to work out our budget because there’s a difference between what you can borrow vs what you can actually afford I think.

I don’t want to buy a house at the very top of our ‘budget’ then regret it because we can’t afford to do other things or even spend any money making the house more to our tastes but a house is probably the most important thing to me before holidays, cars etc.

We’re looking at pretty much doubling our current mortgage and council tax payment which is a scary thought when I’m used to having a fair bit more available after everything is paid. I think the mortgage payment is about 27% of take home.

I’m worried it just doesn’t leave enough room for something to go wrong but would a mortgage a couple of hundred cheaper really make much difference because we’d probably just spend that on other things anyway!

depends - for me i would probably be fine with that (although unsure why you need to save £562 per month for car insurance etc, must be extortionate!)

BUT - i am not having any more children etc

do you have kids? are you planning to have kids?

because if you are that £300 will go quickly and itll be very tight - esp if you need a nursery / childminder etc

Sorry that £562 is savings for 14 different monthly/yearly spending categories. I was just being lazy not listing them all.

Have children already and unlikely to have anymore unless finances changed to allow this.

if that £562 isnt variable as such, then for me no i dont think so because you've only essentially got £300 "fun money" iyswim, which isn't that much in reality.

You seem to have very high outgoings though!

How many kids? Do your savings cover holidays, hobbies, after school clubs, uniform, clothing, etc or are you having to clothe 8 children from that too from Scandi type shops?

Two kids, main hobbies are hiking, clothes etc covered in savings, I think it's doable.

Lif the house gives you a better quality of life then I think it's a reasonable balance.

Although I don't earn 50-60k so my opinion might not be valid to you

Are any of the savings for non-assigned reasons? You know, things like boiler breaks or fridge needs replacing. You definitely need "general" savings if you don't already have it.

Are you putting money towards pensions?

How old are the DC? If they are teens/approaching teens I'd want to have a cushion of money to account for the fact they will be getting more expensive soon.

If you've really accounted for everything in your figures, I think I'd be happy with £300 a month (but I'd want to be actually saving this, not frittering it)

Those figures are almost exactly the same as ours and it's fine although I would say the £300 wouldn't stretch to long tem savings and instead go hand in hand with the £500 covering general and unexpected household costs but we don't have kids.

Our earnings are in the same bracket as yours.

We save about £500 a month. I'd be happy with £300 a month, assuming that is actually what you'll have leftover (ie what you currently have leftover minus the extra you'd be paying on your mortgage) rather than what you've calculated you'll have left after what you think you spend.

£562 is very precise and you've got insurance covered in two categories there.

Have you factored in an allowance for interest rates on the mortgage going up? Not likely in the next year or two but the rates we've had recently can't last forever.

And is there any likelihood of your salaries going up in the future?

If those were your numbers for, say, a year or two, but then your salaries will rise, it might be worth it if the more expensive house will really improve your quality of life. Otherwise I'd be worried about not having much margin for error if something goes wrong. Or much money to save and have fun with.

I would suggest cross checking your budget with the last 3 or 6 months bank statements before Covid to see how this would work for you in terms of leisure/lifestyle spending when those are actually things we can do again!
Should give you an idea how far your £300 will stretch

@TrustTheGeneGenie this is what’s worrying me and why I’m asking really. Because it doesn’t feel like lots to have left over. Definitely agree with you.

@SleepingStandingUp two kids and everything is included that I can think of. I’ve been working with this same budget for over a year but will have a good think if there’s anything else that isn’t in there. Your opinion is definitely useful! Hope my post didn’t come across as rude I was just trying to avoid the the ‘I couldn’t sleep at night if I don’t save £5k a month’ type posts of the opposite of that.

@UserTwice a measly £25 per month that I always end up spending on silly things but that’s because where we live just now we do have much much more leftover so there’s wiggle room for things like that. That’s my main concern with this new house. It’s very old and although in good nick I don’t want to be losing sleep at night because we just wouldn’t have money available for things like a new boiler or roof or whatever if it came to it. This is my main sticking point. But I’m a natural worrier.

At the moment our pensions are just the bare minimum employee/employer contributions.

Kids are still in primary school so I’ll need to have a think about the fact they may well become much more expensive in the next few years but hard to say about figures just now.

@GrettaGreen that’s good to hear it’s doable for you!

Some insurances I pay monthly and some annually so first category was actual direct debits and second was me putting money aside for the annual bill.

Haven’t thought too much about interest rates increasing. That would be a worry. I’ll need to do some sums. Hopefully salaries would go up, definitely. It does feel like it would be a bit of a squeeze for a couple of years then as soon as one of us earned a bit more it would be easier.

Good idea to check bank statements for a real clear picture of our spending!

Thanks everyone.

Slightly different, as we are mortgage free, but similar income, and we used to put aside 1000/month, and pay for insurance/christmas/MOT from the current account - you could generally rely on one or 2 a month.
So that 1000 was a holiday and straight savings.
So I guess if the mortgage is around 1000, that means it would be fine, but limited back up in case of needing to replace something big.

School uniform - will be more expensive on secondary school but how far away is it?
University / savings for kids
Holidays
Childcare
School holidays childcare
Household maintenance Inc decorating
Household repairs - white goods
Car repair / replacement
Clothes
Hair cuts
School trips - do they have big ones in y6? Again likely to increase in secondary
Birthdays
Christmas
Christmas presents
Regular hobbies ie dance classes
Educational upgrades - tablets / laptops / books etc
Weekend entertainment - trips, cinema, whatever you do for fun

That's all I can think of. Do you have more? Maybe someone else can think?

Our household income is £3500 - £4000 (with my overtime) and all expenses including mortgage comes to £1600. We pay nursery at £470 but that come our via salary sacrifice so not included in the above. We save £1200 a month at the minute leaving £1000 disposable income. I would struggle hugely with only £300. We could afford a bigger house but I quite like our financial set up at the minute

2 adults, 1 child (2yrs old)

I think the more I read replies and the more I think about it the more I do think it would just be too tight. You’re all confirming my worries and really the reason I posted.

Eg just now we could just say yes to any trips the kids wanted to do, I’ve just paid a large medical bill (one off), we can go for weekends away here and there (pre-Covid) but I think it would just been too tight with that little there at the end of the month.

Thanks everyone!

We definitely need to move and our mortgage will definitely need to increase but I think the house I’ve been thinking about when creating this post is just too much unfortunately. Very sad but still excited for an eventual move

For middle income households like you, I think it depends a lot on your expectations.

Some people 'have' to change their car every three years so always have car payments.

Some people 'have' to have endless beauty treatments, cut and colour, high end make up and creams etc that costs tens, if not hundred plus a month.

Some people would never take a packed lunch to school, work or on days out so spend hundreds of pounds a month on food and drink out of the house.

Some people 'have' to have the latest mobile phone so in a family spend £100+ a month on mobile phone bills.

Some people buy their household goods from John Lewis or high end independents, which is usually far more expensive than Ikea, supermarkets etc.

Some people think normal basic shopping is organic everything from Waitrose, so the £800 you've allowed wouldn't even cover that, let alone fuel and entertainment on top.

If you're in any of the above categories, it might be tight. If you're a more frugal spender, it's probably fine.

Definitely look at your normal, pre covid spending patterns for costs for general spending, eating out, days out etc.

Maybe try and live on the new budget for 3 months and see how it feels? If anything, you'll build up some savings to put towards moving costs etc

Also, if you haven't done so already, have a really good review of your budget, to make sure you've covered everything and got everything at the best price. It's often possible to save a decent sum if you've never changed utilities, broadband, TV package etc.

www.moneysavingexpert.com/banking/budget-planning/

On the matter of the £562, it's probably a good ballpark for annual and irregular expenses, especially if that figure includes a holiday. Many people say their finances have been derailed by an 'unexpected' car repair, vets bill, broken appliance, or because it was Christmas. But in reality, they've failed to plan for normal expenditure that will happen sooner or later so needs to be included in their spending and saving decisions.

£300 doesn't sound like a lot, but it is, especially now you've explained about all the other figures.

@addictedtottheflats - do you have to take food,fuel etc out of your £1000 as the op has already accounted for that and entertainment, the £300 is surplus after all those expenses.

I think it sounds fine. Ours is quite similar. The only thing I’d worry about I guess is minimal pensions - you could do with having that available to spend. And if you haven’t accounted for holidays in ‘entertainment’.

A lot of people will look at it and not have the comprehensive stuff in entertainment and annual savings split out, so will see it as very tight, but in reality if you’ve covered all costs £300 surplus is certainly not terrible. But you do want to be able to save for house maintenance, longer term savings and potential job loss/rainy day fund.

I wouldn't be happy with outgoings that high to be honest but a disposable income, holidays and the freedom to spend freely and not to think about money too much is more important to me than a nice house, from what you've said your priorities are different. So, for me no but I think its do-able if its what you really want.

How much can you cut down on food, entertainment, Xmas etc of you needed to?

If you are already pared to the bone then I wouldn’t be keen. But if you could get yourselves and extra £300 a month by cutting down a little then I would go for it.

I think it sounds do able. My only worry would be if the house needed lots of work. We stretched to buy a 5 bed and I am glad DH talked me out of a "renovation job" and into one that just needed redecoration

Another consideration is job security and future career prospects. I felt more easy because DH and I knew we have pretty secure jobs, and promotions were looming too. We both earn a fair bit more now but we plough that into savings so I think our original budget estimate was fine.

I think the key is to maybe try living to that budget for now. That should give you a good idea. We did that and chucked all the "spare" money into the savings account for purchasing the house.