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

What stands out to me is that you are talking in terms of family income being £X per month but only saving £Y per month … but then you mention you save separately and your DH pays for things (e.g. holidays for parents etc) and surely this is coming from your own disposable spending money? So your ‘family income’ that you’re actually budgeting is not the whole amount? Because you both keep money in your own accounts.

You also mention you have a spreadsheet but don’t know where the money goes - an idealised imagines budget is one thing, what things actually cost and what you actually spend is another.

For example, you say £300 on food but is it really? Is that all lunches at work, eating out, takeaways and so on? Is it every time you do a top-up shop as well as the big supermarket shops?

If you know you’re leaking money, and that your husband likes to spend not save, you have to sort out what you’re actually spending - not what the spreadsheet says you ought to be spending. Then make a realistic plan for gifts, eating out, treating the kids etc.

How are your pensions?

YNAB has been recommended on mums net for years now. I found a YNAB through Mumsnet and it is fantastic. I've been using it for nearly a year and have managed to put aside several thousand pounds.

YNAB not only helps you plan your spending but you see in detail what exactly you're spending on. It's also very fluid so for the first few months to figure everything out you can move things around and it's totally cool to do that in fact it's part of the process. You can both run the same budget on your phones via the app.

There are 35 day free trial. You do you have to pay for it after that but honestly if it works for you you would've saved enough in the first 35 days to more than pay for it.

I recommend giving it a go

www.youneedabudget.com/

[quote SandysMam]@PostMenWithACat

Honestly, you could probably buy all this in Aldi for £100. I fought against it for a long time then it completely blew my mind when I did my first big shop in there! That would be a saving of £4000 a year for you, surely just a change of supermarket would be worth that?[/quote]
That depends on the value of ones time. I used to shop at Aldi when I was on maternity leave. I was time rich, cash poor. Now I'm back at work, 52hours a year (weekly shopping) is not a good use of my time. I work for myself and I can't be giving up a whole working week to shop. I earn far more than 4k

@Weirdlynormal crikey! How long does it take you to shop? It only takes me an hour to do a shop, whereever I am (Waitrose takes me longer as I am looking at all the lovely things!) plus Aldi do click and collect now. And unless you are Bill Gates, 4K a year is still a nice amount to be able to spend on something else!

Every year Dh and I sit down for basically a look back over our finances. All our utilities etc come out of the joint bank account and are paid by direct debit. We occasionally take out 0% deals so that we can keep our credit rating, so our sofas for example are on a 0% finance deal even though we could have afforded to pay for them in full there and then. We own both our cars outright and have a lot of savings in individual names but both of us can see how much is in each pot.

Everything that we can buy on the credit card is bought that way as we are on a rewards/points system. The card is paid in full every month automatically. Dh extrapolates the information from our monthly credit card statement into an excel spreadsheet and we can see where we have spent money. This isn't a admonishment exercise but lets us look at what we spent and importantly on what.

We also use it to plan what our plans are for the following year. It sounds really dry but it isn't.

I think your issue is that you are unsure as to where that excess money you could be saving/using is going. It is possible your Dh may have what we call an "Ikea moment" where day to day it doesn't seem like a lot but when you look at it over the year it is. It is the same when you pop £1 or £2 item in your trolley at Ikea and get to the till and think how much?

So a £3.50 coffee every work day would be £17.50 a week, over 48 weeks is £840. That is a lot on coffees.

[quote SandysMam]@Weirdlynormal crikey! How long does it take you to shop? It only takes me an hour to do a shop, whereever I am (Waitrose takes me longer as I am looking at all the lovely things!) plus Aldi do click and collect now. And unless you are Bill Gates, 4K a year is still a nice amount to be able to spend on something else![/quote]
52 weeks of the year x 1hr = 52...

So if I'm spending an hour a week, then it's 52 hours I could be at work. It's more than a week of work but it is actually a trade off of my time in that way. I've not got enough time as it is so I'd willingly pay £4k per annum to get my shopping delivered.

Going back to the Q of expected living standards, a £75k income could be eaten up by debt and result in a pretty poor standard of living. Other people would have this and be mortgage free and able to pay for a child in private school in some areas if the country, or to have lavish holidays.

Some people on £75k will have a far better standard of living than those with £100k, if they have managed to be totally debt free and don’t live somewhere hugely expensive.

The more things you buy that are paid for monthly (like cars and phones or furniture) even though each might not be vast sums individually of course there is less per month for spending on other things. Those without a car on finance and a couple of mobile contracts (ie gone SIM only) and no credit card debt ir other financing, could easily have several hundred pounds more available each month which can make a vast difference. But if course they have paid for their cars and their phones upfront and needed the cash to do this.

A key question for standard of living in my view, isn’t just the income, but also the stash of savings that are available to enable the replacing of a car etc. Buying on credit almost always costs more, and always having a new version of everything (phone and car companies and their credit plans are designed to move you onto new versions to keep payments going, rather than to end the payments and own outright) means you can always be paying a monthly payment for a car. In an individual month £250 might not look much, but over 8 years of continual leasing or payments it’s a lot.