FWP - panicking about money and school fees

[Parttime1]

I know this is a first world problem but I wanted to get some outside opinions.

Sorry, this turned out really long.

My DH is pretty rubbish with money. He sticks his head in the sand, as long as there is money in the account he doesn't really care. I usually deal with finances and he doesn't really want to discuss this with me he just tells me everything will be ok.

We moved house last autumn, it's a lovely big house but I am slightly panicking that we didn't think things through and have moved as a knee- jerk reaction to lockdown and WFH etc. Our previous house was ok, needed a bit of work but was in a desirable area of London and sold quickly- I think we rushed into buying somewhere else. DH was the driving force behind moving because his job has become fully remote. I work 3 days a week, a mixture of at home and in the office in London.

We have moved out of London and have put our DC in private school (they are 6&4) mainly because we couldn't get state places organised in time but now we love the school they are in and so it is unlikely we will move them in the near future (plus 3rd school in 2yrs for DC?). Their names are down at our preferred state school just in case but last time I checked they had gone down the list, not up!

I am worried we have bitten off more than we can chew. Previously we had a small mortgage (£600 a month but we overpaid a few hundred each month) and childcare fees/ tutoring of £500 a month. Now we have school fees of £28k a year and a mortgage of £1,300 a month.

DH didn't get his bonus (which he usually does, it is contractual but there is a force majeure clause which his company activated despite their annual profits not being affected by Covid) which means we cannot save as much as we would like (we do not rely on it for living expenses but there were a few things we needed/ would like for the house which we will need to wait for now).

Our monthly net income is £9k - previously we saved about £2.5k into pensions and for moving/ renovation (my pension is poor but my DH has a decent amount put in by his company), DC went to a state school but the remote learning was basically zero so we topped up with tutors and we then changed to private school when we moved, until last August DD was at a private nursery costing £1,300 a month. Then we spent about £4k on bills and everything else.

I think lockdown made us feel richer than we actually are.

For the first couple of months we had additional moving expenses - all new uniform for DC, changing locks, having the alarm system updated, fencing repairs, some redecorating costs (paint is so much more expensive than I had realised!) and a couple of bits of additional furniture (this house is twice the size of our old one), new pans because the ones we had didn't work on an induction hob etc. The garden is massive so we still need a ride on lawnmower, oil powered heating which needed topping up when we moved in and will probably need a top up again soon(ouch!). It goes on...

Things have kind of settled down now but still I think we are going to find things a little tight which seems ridiculous.

Income: £9k
Outgoings:
£1,300 mortgage

£2,500 school fees (we have paid the remainder of this year's and so want to start saving for next and uniform costs and other extras)

£1,500 bills and food (our food bill seems ridiculous atm, this includes all essentials - council tax, water, oil, electricity, car tax, MOT, petrol (we drive a lot more), insurances, tv and internet, private dental (because we have never managed to get an nhs dentist).

£1,000 spending money - this includes things like clothes and shoes (I set aside £200 a month for all of us, it doesn't seem to go far and DH barely spends any of it), Christmas, birthdays - I set aside £100 a month for Christmas expenses (parties, extra food, clothes, presents for our large families) and £50 a month for birthdays - presents for us, friends and DC's party), DC activities (£200 a month, usually paid termly though so probably a little less), socialising (not much recently but perhaps £200 a month before?), my commuting costs (which are now £30 a day as it isn't feasible to buy a season ticket for ad hoc days, I probably do 5/6 days a month in the office, I paid £100 a month before) and £100 each to DH and me for small spends (for coffees/ bits for hobbies, my makeup etc) - this expenditure has been low during lockdown and we have been saving most of this/ spending it on the house but already things are creeping back - music/dance / swimming lessons starting up again, we all needed new shoes/ trainers and all booked in for haircuts next week etc. I don't know if it just because everything is coming up at once? I also feel like a lot of the DC's activities are costing more here - not much, maybe £1 a session but they do three things a week each so it adds up.

£1,000 pension and ISAs/ JISAs (I get the bare minimum through work so put an extra £600 in, £100 a month into each of our JISA and ISA) for longterm savings

£700 for holidays and holiday childcare (our holidays are usually £6k ish a year (less this year because we are staying in the U.K.) and then holiday clubs another £2k or so depending on what they do

£1000 - top up rainy day fund, car fund (our car is 10yrs old and will need to be replaced in the next couple of years, we might even need a second car) and to put towards some things we need and would like to do to the house - like I say, the house is big and has about 1 acre garden - nothing is immediately required and the kitchen and bathrooms are new. We didn't do much to our old house (because we planned to renovate) and so I would really like to keep on top of maintenance in this one as I know how things can easily slip if not kept on top of. Our rainy day fund (£15k) is down to less than 3 month's expenses which I know is more than some but we always had a decent buffer - I want to get this up to 6 months ideally. We do still have money in our ISA's too but this is supposed to be for the future - university, retirement etc. But I suppose if necessary we do have them there to dip into.

I tentatively plan to return to work FT - DH is not that supportive as it is generally me who does all the dropping and collecting of DC, housework and cooking - he likes the status quo but even then after deducting additional childcare costs and travel it would be about an extra £500 a month coming in - and some of that would have to go on a cleaner.

I guess I am just panicking about all the outlay after a few years of saving pretty hard.

Our original intention was to do up our old house - add an extension and loft conversion, it was when we got the quotes that we decided we may as well spend the money we had saved (£100k) and extend the mortgage (quotes were £250k + for our London house, it would have been a big job and so we would have moved out and rented somewhere for a few months too) for an already bigger house out of London. Then there was the stamp duty, agents fees etc - we have spent most of our savings and increased the mortgage. Our mortgage is £250,000 but we kept the term of our original mortgage, 18 years.

School - we were not happy with our DS's old school, even before lockdown and were thinking about private schools then. I distinctly remember sitting down and working out all the costs and it all seemed fine - but then moving has drained our reserves and everything just seems more expensive. Council tax is £350 a month. Water £50, electricity £80, oil - we just spent over £1k and I don't really know how long that will last. Food - I'll admit I have been buying more convenience food as I have been busy working, homeschooling and sorting out the new house but we are spending over £600 a month at the moment.

Then there was the kick in the teeth with DH's bonus - it is usually £25k after tax and we usually squirrel it away either in pensions and ISA's so I don't know why it is worrying me that we don't have it this year. I think it wasn't paid because the company claimed furlough money for other employees and it would seem wrong to give a bonus and payrises (even though their profits remained pretty unchanged).

Do you think this is all manageable? The house overwhelms me at the moment - everywhere I look there seems to be something needed to be done (lots of small jobs that we can do ourselves and also bigger things that worry me - it has a huge roof and although the survey said it was ok, if that needed doing it would be £30k at least). I feel like I knew our old house inside out and could forget about the small jobs, it feels different now.

School feels like such a massive commitment but DC love it there - I would gladly give up other things to keep them there (DS's first school just was not the right place for him and he is a different boy here even after a few weeks) but then the fee increase letter came through with the bills for next term and I got in a panic (4% increase when I had planned for 5% so I have no idea why it made me anxious).

Our jobs are pretty secure, I do not maximise my earning potential at all - I have been plodding along in the same old job for 10 years with one pay rise in all that time, DH could probably earn more too but he likes his current job and loves WFH.

Would you worry at this level of expenditure with our income?

I so wish I had your money "problems" OP. Geez.

Someone receiving a 45k bonus would pay almost half of it in tax.

I suspect she's gone now. I think the real issue is wholly psychological. It's easy to judge, but anyone who has ever been poor lives in abject fear of not having enough money. It does seem irrational, yes. Maybe it's more about not feeling very comfortable with the private school set. The few I know have literally millions in the bank. We would rather move to a better secondary catchment than send them private for that reason. I think she's looking for a rational rather than emotional reason to ditch the school.

because fees will go up massively at secondary level, usually double, so if I were her I wouldn't even start down that road, as otherwise her kids end up having to make the way harder transition from private to state.

That's not precarious though is it. The OP has already saved this yrs fees, has a rainy day fund, saves a high amount each month & no doubt has lots of equity.

@Parttime1

I wish we were in this situation.

We both work I work 30hours (4 days) partner does 40hrs (4x 10hr shifts)

We earn, between us £2800 to take home

You are in a very very fortunate position

@bathmatty yeah I didn't really read the detail that carefully. Just seemed like oodles of commitments, but as someone else said they're wants, not needs.

I do sort of get where your coming from as an increase in mortgage plus school fees is a bit of a shock to the system. Not a complaint or a stealth boast but one DC needed to board for 6th form and I couldn't not let the other who wanted to so our school fees bill is about £65k this year. We are very very lucky to be able to be able to afford this but it has meant cutting our other costs. Assuming that one cost you don't want to cut is savings (and I agree with your approach especially as your pension provision isn't great), then other areas need to be cut instead. If you look in the money section on here you will find lots of advice on how to cut food/utility bills etc. As a benchmark a weekly food budget of £80 should feed your family well if not luxuriously so if yours is more than £100 you should be able to cut it.

In future I would plan 2 cheaper holidays and mentally earmark part of the bonus for a third one. I'd also earmark a chunk of bonus for early repayment of mortgage. So assuming an aftertax bonus of £25K look at spending £3-4k on a holiday and £15k off the mortage and then see the rest as extra money. It means that if the bonus isn't paid its not been earmarked for daily spending costs.

@Ohnomoreno

I suspect she's gone now. I think the real issue is wholly psychological. It's easy to judge, but anyone who has ever been poor lives in abject fear of not having enough money. It does seem irrational, yes. Maybe it's more about not feeling very comfortable with the private school set. The few I know have literally millions in the bank. We would rather move to a better secondary catchment than send them private for that reason. I think she's looking for a rational rather than emotional reason to ditch the school.

I agree. While I understand people objecting to the post, we are starting to skate into ‘what have you got to be depressed about territory’. Anxiety and worry aren’t necessarily rational and in the face of a lot of change quite quickly, it’s easy to lose perspective. The school fees are huge and the implication of not being able to pay them then passes onto the children. Personally I’d get out of the private school system ASAP so the children then move through state with friends without the cost burden.

I nearly didn’t read the full OP but I persevered. Basically yes your food bill is ridiculous, your £1500 for bills and food can easily be cut by £500+. £1000 a month on spends, again ridiculous. Try cutting that back to £100 Christmas, £100 clothes and £200 socialising and days out. Halve your holiday, we manage £3000 for a 2 week holiday abroad in summer holidays. Cancel the tutor and do the work with your children yourself, at 6 and private school it will be easy to catch up.

We earn half your income without the bonus and are very comfortable so your post does come across as ridiculous although we don’t save anywhere near as much, probably £500 pensions and £150 ISA for the kids. It’s really quite simple that you just sit down with a bank statement and look at where you’re wasting money. Cut back on TV packages, streaming services, coffee at work etc.

I wasn't going to comment, because it's a real situation to you. But your monthly savings pot of £2,500 for holidays is more than my gross monthly pay. I run a home on that. No school fees though. You are definitely OK, but you probably need to adjust.

I think no need for haters. We all have different income levels. I’m a single parent and saving for a deposit for my first home, on a relatively ok income I think. A lot has changed for you in a short space of time. The world is not stable right now so I can understand why you’re concerned, even if many others can’t. But you need to remember you are not spending anywhere near to your max, there’s lots of things that can be cut if necessary. Save as much as you can so that if things do change for you financially you’ve got a fund to fall back on. Obviously you could cut back on holidays and reduce your bills and food budget. I find it’s helpful to have an excel spreadsheet with all my bills on and I can see where I can make savings so I can save as much as I can. For me food is a big one, and of course holidays, though my ex tends to pay for those (we are good friends). You might get a school place in the village school, which would be good as prep school for young kids isn’t always the best investment. So try and chill out about the change in your expenditure, easier said than done I know. I also agree with your comments about should people not post incase it upsets someone. This is the money page and we all have different income levels. You appreciate you’re privileged but doesn’t mean you’re exempt from worrying

Well most people would love to be as poor as you OP

Look, it's really simple OP. Set up a spreadsheet and list all outgoings and incoming.

You have definitely fallen into the trap of getting used to a lot of disposable income and then flapping when that isn't there. It doesn't mean you can't afford things but it does mean you need to reassess your lifestyle. Go through your bills - what don't you need? How can you make the food bill less? Where do you shop?

It's great that you use savings for things that are coming up in the future. We do that too for our cars. I also view it as money that is already spent.

Where you are coming unstruck is the view that you HAVE to save for holidays. You don't. If you decided that this year, you are not going on holiday, that would boost your savings. And let's face it, it's a good year to not go on holiday.

You ARE in an incredibly fortunate situation.

We had a mortgage of £1800 and child care fees of £1000 at one point with a salary of less than half £9k per month and I didn’t even think about lack of money. Thankfully not for long and things got easier with school starting for oldest child. Just had less / no discretionary spending for a few years I guess looking back.

Wish l had these problems🙄

You have a ton of money but if you are feeling skint I’d really recommend you stop the private school madness now. You can’t just get away with a £5 party present and the costs of extra curricular and trips will be where your money will go.

3k on a holiday in Devon is just insane. I would say look at buying a holiday caravan to let.

There is a lot of spending that is just frippery.
Get a budget. Stick to it.

You need to make an actual budget OP. www.moneysavingexpert.com/banking/budget-planning/ go here and enter every penny you spend. I think you are probably wasting money on stuff you don't realise.

Someone receiving a 45k bonus would pay almost half of it in tax.

Oh poor them. Their after-tax bonus is still double my annual income, and I work full time. The OP needs some perspective.

I get it @Parttime1

If you grow up with anxiety about money, it stays your whole life. If you're not careful, your kids pick it up too!
I was therefore similar for years having picked up on a parent's anxiety. I always needed a half year's salary in the bank in case of redundancy and lived in a smaller (perfectly fine) house than I needed to. But then I changed. I started thinking of what I was missing out on living that way: your glorious garden, a happy child, friends staying over etc.
However there are two things I think you need to do as a priority:

• Insure your husband to the hilt. I assume you've got life assurance for the mortgage but would it cover school fees? If your salary is always going to be a third of his - and I do recommend looking into changing that - then you need to be protected.
• Small children don't need 3 activities a week and in any case, a private school should be running clubs for them. They'd rather be with their cousins than doing art or whatever!

Your budget sounds fine as long as no major life events come along. By even if they do, you just adapt - sell the house for instance. It's all manageable.

I don’t normally comment on these types of thread but this one seems particularly crass.

Surely you don’t need MN to validate the figures when it is plainly obvious you have more than enough income to afford your lifestyle🙄

I worry about money sometimes but I wouldn’t put it on FB or MN as I know I am pretty financially secure compared to lots of people and I have the ability to work things out for myself or seek independent financial advice.

I know this is an anonymous forum and you can post what you like but there are people on here really struggling.

I'm anxious about financial security too even though, I know perfectly well that we have a lot more than others. I post details about our personal finances on MN which I can never discuss in RL because people are not comfortable about revealing their income and expenditure choices and especially so, if there is a wide disparity of income between households.

Ironically, The £6K holiday budget for the WHOLE year for a family of 4 is hardly extravagant considering the various holiday spend MN threads we get pre pandemic. And the rates for UK holiday rentals have shot up to extortionate rates due to demand/supply that I can believe that an holiday static can cost £2K+ for a peak summer week - if there are any left.

OP - you're just not allowed to be well off on MN.

9k is not a big income to private school two children. Or run an oil-fired boiler ;)

@Diesse

9k is not a big income to private school two children. Or run an oil-fired boiler ;)

When the mortgage is only £1,300 it’s fine.

OP - you're just not allowed to be well off on MN
But bragging about ones wealth is utterly insensitive and grass

Crass