Living standards for a family of 4 on £75k a year

[Onfire]

I know there’s so many variables due to expenditure but based on a family of 4 running 2 cars, one paid for, one that’s £200 a month, no other loans, no childcare, a mortgage of £1100 how would you expect to live?

It’s 2 people earning so the total amount coming in per month is around £4600 after tax and deductions.

I ask because it seems like a lot, but yet it doesn’t seem to stretch very far. We do manage to save a little bit but most of the time this is maybe a role £200 a month here and there.

DH is in need of replacing the paid for car, it’s not worth a huge amount as it’s getting old and ropey but I’d be worried about borrowing money

That's a lot of income and not much outgoing. I think you must not be taking things into account if you're not able to save. Hi through the last few months' bank statements and allot every spend to a category eg 'entertainment' 'food' etc and you'll see where you can save.

What are you spending the rest on that it won't stretch? Have you not got any savings?

That seems like a high take home for that salary. Do you pay much into your pensions?

Put absolutely everything on a spreadsheet.

How much have you got in savings?
Are both contributing to pensions and are those income figures after pensions?

It seems a decent income and the mortgage manageable.

How much in food per month?

A lot is dependent on debt and savings. If you had decent savings, you could replace the old car with something 3 years old and when the existing lease ends, but another 3 year old car. That would then give you £200 extra per month which is a decent amount.....depends though if you can afford to buy outright and pay upfront.

I don’t think it is that much actually with that level of mortgage, assuming kids have various activities etc, utilities, food, socialising

I found this really helpful. makes you sit down and think about everything you are spending money on
www.moneyhelper.org.uk/en/everyday-money/budgeting/use-our-budget-planner.html

Do you have high childcare/school costs? E.g. school dinners 100 per month, wraparound 400 per month, food 500 per month, savings 500 per month

Sounds like you've not calculated your bills/ spending well if that's all you're left with. You've only listed £1300 worth expenditure, I would expect council tax/gas/electric/ insurance, etc to take you to £2000, food to £2500, petrol £200? No idea. So basically, I would expect you to have £1500-2000 left a month.

I’d expect savings of at least £500 per month from that.

Are you spending loads in supermarket? Can you get it to £300-400 per month?

It should be plenty with that mortgage unless all your pension contributions etc come out after.

I'd be happy to have half of that coming in per month. I'm on a basic wage, work full time, look after my kids with the one wage coming in and still manage to save so I think something is seriously wrong. How much are you spending on other things like bills, food, fuel etc? Make a list of outgoings and use your bank statements to work out where the money is going and how much you can save.

Go through all your outgoings. If you can, download your bank statements going back over the last 6 months or so. Categorise everything so that you can see where your spending is going.

I started this at the start of lockdown and kept it up ever since.

It is a real eye opener. You will quickly see how your regular expenses go and be able to plan for them rather than be taken by surprise.

We have a similar income to yours and manage to save some 100s per month plus still enjoy a couple of takeaways per month. We are saving for a holiday and are able to absorb unexpected costs like replacing the washing machine without it being a crisis.

What are you spending on bills and food? If you list all your expenditure here we'd be able to give you a better idea.

Lots of xposting!

I agree with others. Write down all your incomings and outgoings.
Go through your bank statements and check that you don't have any payments going out that you'd forgotten about/thought you'd cancelled.

On the face of it you should have plenty of surplus income, so it would really be worth finding out why this is not the case!

@MissM2912

I don’t think it is that much actually with that level of mortgage, assuming kids have various activities etc, utilities, food, socialising

Exactly this. We have similar salary and mortgage payments but with 1 child and 1 car. I think with 4 kids we'd be struggling a bit. Even just getting new school uniform for 4 kids must be a fortune and then there's all the extra curricular stuff you pay for. So I understand what you mean OP by it being a decent-ish salary but not stretching far.

It's two kids isn't it? Family of four? I don't think it's worth being judgemental about other people's income but she is saying she's worried and unless there's an outgoing she's forgotten about it should be enough to save a bit, based on the 'average' bills/spending etc.

Well we have about that and we rarely save anything although I put aside money for holidays. Like everyone says - spreadsheet - go through your bank details and work out everything per month. I'm not including pensions as we don't see that in the take home amount. It does add up. I have the following on my list although I'm not including how much each thing is.

School Dinners for 2 kids
Holiday Care
Ground Fees (we're in a new build)
Kids savings accounts (for when they get to 18)
pocket money for 2 kids (goes into their current accounts)
TV licence
Netflix/Now/Amazon Prime
Council Tax
Mortgage
Gas and Electric
Water Rates
Life Insurance
Dental Insurance
Mobile phones x 4
Home Insurance
Car Insurance
SECURITY (we pay for our Ring camera footage storage)
Phone/BB/Cable
Credit Card payments
Sofa payments
Viz Subscription
Kids activities (football etc)
Car Expenses
Holidays
Personal Spends
Food & Drink
Entertainment
Loan For Carpets
Kids school travel expenses
WWF subscription
Windows cleaned

@KnobJockey

Sounds like you've not calculated your bills/ spending well if that's all you're left with. You've only listed £1300 worth expenditure, I would expect council tax/gas/electric/ insurance, etc to take you to £2000, food to £2500, petrol £200? No idea. So basically, I would expect you to have £1500-2000 left a month.

Then possibly adding Sky, Netflix, Mobile phone bills, Car insurances, breakdown cover and tax, Life/CI insurances, pensions, occasional meals out and socialising, kids clubs, clothes and shoes, water rates etc etc etc. The list goes on and on and that's before you add on things like holidays, birthdays, Xmas

We have a similar situation but save £750 a month. You need to look at your outgoings.

I'd suggest doing this, and either posting it, or at least meditating upon it!

www.lemonfool.co.uk/financecalculators/soa.php

Spreadsheet: run months down the bottom, horizontally have all your ingoings, minus your outgoings. I do this for up to 2 years in advance, helps me see what months will be tighter (eg around birthdays, MOT time etc) to ensure I'm preparing in the flusher months.

We used to have a similar salary which amounted to less after student loans and pension and had higher car payment and (some) childcare costs (although mortgage a bit less) and never felt like we were struggling. We went abroad every year etc.

I'd expect very, very well. Surely U need to do a budget or at least income v expenditure list. Do you spend an insane amount of money on petrol/ food shopping or have expensive hobbies?

I have 2 young kids. We earn about £42K combined, I'm only part time. We run 2 cars, 1 is about £230 a month and 1 owned outright. Mortgage and council tax £760 childcare £550. So our bigger bills don't seem much different to you. We have full sky package and bt sports. We buy what we want when we want, (I buy lots of nice clothes for my girls) we go on holidays (pre covid 1 x abroad per yr) wkends away and days out, meals etc. We have lots of savings too although maybe more built up when I was full time. We save about £400 a month but that's to cover holidays maybe expensive days out.

@Sisisimone I would expect water, all insurances, Netflix, etc to be covered within the £700 ish I put for bills. I wouldn't expect child activity expenses and uniforms to come out of that, or socialising. Pensions have already been taken as this is take home pay.

So on my figures above, they should have £1500-2k for socialising, child activities, clothing, holidays, etc. Either way, I think they must be overspending on this 'fun' stuff (not necessarily fun, but can be as expensive or cheap as you make it) to get down to only able to save £1-200 a month.

The absolute way to tackle this is "what are we spending our money on"

People who declare themselves broke (not being dramatic, I just do some work alongside people who are low income and starting businesses) often have no money, but it's not the money they have necessarily, it's what's left after they've made the spending decisions they have. Some are essential, some are not.

So, you've got £4600, less mortgage and car of £1300. That's £3300.

(I'll go estimates) water £40, gas and electric, £180, c tax £150, TV licence £14, prime Netflix £15, internet and broadband and TV package £70, phones £50, two lots of car insc and tax £120, groceries toiletries household £800, house and contents insc £25. Fuel £100.

That's another circa £1600. Add in another £200 for someone needing clothes, someone needing trainers and it being someones birthday. £1800. Then there's bigger things, the washing machine needs replacing, one car needs a service, the other needs new brakes, the boilers gone, something's broken. These can go from £100 to £1000. Let's average it at £250 a month over the year. So that's just over £2k.

Take that off your £3300 and you've got somewhere around £1100-£1200 left.

That sounds like a lot. With your £200 into savings, you should have a minimum of £900 left. And this is where the frittering that could really make a difference happens. £900 sounds a lot. But. 900 x 12 / 52 = £207 p/wk, which suddenly doesn't sound as much. Friday takeaway for 4? £50. Now it's £157. Extra bottle of wine for Saturday night? £20. £137. Everyone off to the park/generic outing on Sunday? Parking, £5, lunch on the go, £40. It's now down to £92. Husbands 3 coffees during the week, £15. £77. Both kids to the cinema/into town with friends (parking/tickets or a tenner to spend) £25. And you're down to £52. Someone needs a haircut, and with the parking, the hairdresser, the quick coffee on the way back, that's gone.

When you've identified what your frittering is, focus on that. With a bit of bill comparison you can reduce your essentials, but unless you're currently being totally shafted, it won't be a life changing reduction. But when you tackle the frittering that eats up the £900 you should have left, that's where you'll be able to make big changes.