Cost of living is drowning us

[BlairSinclair]

We have a decent income between us (£3k/month) but the cost of living down south is breaking us. After rent, bills and childcare we have

@SparklingLime agreed! I hadn’t considered it til I sat down to sort through things today and questioned how he was spending that much on fuel. He’s a good guy, just doesn’t tend to think about the bigger picture.

I recommend doing the MSE Budget Planner as your monthly outgoings will be higher than just the things you pay on a monthly basis because you need to account for more infrequent expenses, like haircuts, clothes, holidays, birthdays, Christmas, car repairs and service, etc. They also have a Money Makeover bit after you do the budget planner that has lots of ideas to make cuts.

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

Go through the spreadsheet and fill it in honestly - you'll probably find your monthly outgoings are a lot higher than you think once you factor everything in.

You're being head hunted, so can go for a bigger salary- you need to be brave and go for it. You can do it.

The only other alternative I can see is getting a job which is different hours to your DH, so you don't have to pay any child care. Working his two days off and the days the GOs can have your DC would mean you're not paying out for any childcare. That's what's killing you, the childcare.

@SparklingLime I will equally feel very guilty if it turns out he’s squirrelling some away for my birthday / a rainy day fund. Gonna get his car looked at by a friend as it has crap acceleration (drove it today) so I’m wondering if theres something mechanical driving cost up as well. But surely it can’t be that high?!

Rent and childcare are crippling you a bit at the moment. We earn a bit more than you but our mortgage is half that and our childcare is too. With those expenses, we would have to make cutbacks too. It would leave us almost nothing spare. So I don't think it's really anything you're doing 'wrong' - the numbers just don't balance very well.

Thank you all for being super understand and helpful by the way! I was a bit nervous posting as I’ve watched people get savaged on threads but honestly appreciate all your kind words and advice.

I will definitely be getting my CV in order and start seriously looking. And will look at shared ownership/ seriously buying a house. If all else fails I will swallow my pride and ask if we can move back in with my parents for 6months-1 year to blast up the savings. They have the space, but DH hates the idea of living under someone else’s roof and rules again. But it’s a means to an end and storage will cost a lot less than rent.

£3k income per month is very little. Do you work full time? You ideally need to double your monthly income.

I know, I know.

Make a 5 year plan.
Consider moving north. Much further north.
you need far less commuting expenses, and more income, so probably new jobs for both you and DH.

It can be done. Sometimes you have to make big changes.

@whattodo2019

£3k income per month is very little. Do you work full time? You ideally need to double your monthly income.

Do you both worth fill time? You have a relatively low joint income. Is one of you part time?

@whattodo2019

£3k income per month is very little. Do you work full time? You ideally need to double your monthly income.

Got to love MN!!

Yes OP, it really is quite simple, just find a way to earn massively over the national average. Not sure why you've not thought of that. Though if we're talking 'ideally', why stop at 6k?

Lower cost area of the UK or I would consider emigrating

It’s not simple but two adults working full time earning 1500 each is twenty grand a year each, it’s low end of the salary scale and not a huge amount above min wage, hence the questions if maybe one of them is part time.

If you are being headhunted, set out your requirements. You want condensed hours over 4 days with a WFH element.
Or ask your current employer.
Losing a day a week on childcare is your best bet for now.

@whattodo2019

£3k income per month is very little. Do you work full time? You ideally need to double your monthly income.

What an amazingly helpful insightful comment.

Just double your income OP! Duh! Problem solved.

you are overspending by £49 per month on the budget you gave there and if your income is £3000 per month

£1569 household bills
£260.71 living costs / shopping at £60 per week
£40.00. finance and insurance
£763.00 childcare costs
£417 travel for two cars, insurance, fuel and MOT but no service
£3049.80 total per month

that doesn't include any tv licence or packages, no house or contents insurance.

Your biggest single expense after your rent is your two cars, fuels and insurance, its costing £417 per month, thats a cool £5000k per year, so you work for January and February each year just to fund your cars including the £100 on your car loan

If you want to stop drowning, then id look at your transport costs, change to electric.

How far do you need to travel to GP with dc and childcare? could GP pick up on their day and dh transport child to childcare and get rid of one car?

ive just looked at a nursery in a midlands town and its £210 per week full time - 7.30am - 6pm thats the same price you're paying now, but full time and no grandparents help

moving and buying further north would possibly be part of the answer, if you can get a mortgage you'd be paying less each moth on that then renting

but it depends on your dp commute?

@Whatiswrongwithmyknee @Morgan12 jeez if only we’d considered how easy it was to double our income?!

@Bluntness100 our income is almost exactly middle of the UK population according to the IFS calculator. Yes we both work full time.

Honestly until we had LO we had a comfortable life in terms of outgoings. We weren’t rich but we could afford to do what we wanted, save a bit and live happily. DHs job loss hit our savings HARD but that’s life.

A new job for me will make a significant difference - more than the childcare cost if the recruiters are to be believed. So that’s my main step, but doesn’t solve the right now issue.

@ivykaty44 GPs do all the pickups/drop offs on their days.

DH can’t drop LO off as nursery opens after he leaves for work and closes before he gets back. I had an insurance defunct 3 years ago (my fault - forgot to change it to my married name, we moved and I changed bank account and they only contacted me via letter) so have 2 years left til the cost will significantly drop on price comparison sites. His drops yearly though which is good.

It also turns out I had got his income wrong as he keeps his petrol and insurance money aside before he transfers his salary - it’s not a massive amount but enough that if we lose the little luxuries we’ll be fine for a while.

DP won’t change jobs as he’s on a course that will take a year to complete but will increase his salary - this job is down south, just a few cities away instead of miles. I wanted to move north originally but is firmly against being away from our support network. Hoping I can persuade him round once this course is over!

What does paying off your car on credit card mean? Are you paying interest? Interest on credit cards are usually much higher than a loan.

Could you manage with 1 car?

Is DH still looking for a job closer to home?

I think it’s part work out a budget so you can see exactly where your money is going and part try to earn more.

It’s definitely worth also trying to see what housing options you have as at the moment for many people it is cheaper to have a mortgage than rent.

Best of luck

@ivykaty44

ive just looked at a nursery in a midlands town and its £210 per week full time - 7.30am - 6pm thats the same price you're paying now, but full time and no grandparents help

moving and buying further north would possibly be part of the answer, if you can get a mortgage you'd be paying less each moth on that then renting

but it depends on your dp commute?

Where is that? I’m Midlands and pay £59 a for for 9 hours childcare. I looked at numerous nurseries that were all similar. pricing.

You need to go through you budget in finer detail. The Martin Lewis Budget planner is really good.

I can't see how you're not overspending if what you have here is right. I also think some is missing. Like how is your mobile phone/ TV / internet £39 total for 2 people? And as a PP said, no TV licence, car maintenance, MOTs, other subscriptions e.g. netflix or prime, gifts, going out, days out, parking, even the occasional takeaway or meal out? It all adds up.

To answer you question though, here's what I would consider doing:

Think about the couple of years ahead. It won't be like this forever. Childcare costs can drop once they get over 2 and will drop further once they're getting the free 30 hours.
Find a way to drop the second car if you can - whether it's getting a nursery or childminder within walking distance.
Make sure you're signed up to all government offers - Do you have a LISA?
Minimise rent. You can get flats with gardens and tbh if it's for a focused 2,3 or 5 years you can get by without one. Many of us do! It's brutal but move if you have to. It'll cost you about £1000 to move (plus the deposit, but you'll hopefully get your current one back so that should cancel out). But if you're saving 200-300 a month you'll soon make that back in 6 months
Look for a job that pays more and doesn't involve travel.
As PP have said, sell toys, baby stuff, clothes
Buy as little as possible and ideally second hand from now on to move your spending into assets
Make yourself a savings plan to stay focused and motivated otherwise it seems unachievable.

Btw I have a lot to say on it as I have done this myself to get out of £15K debt during the pandemic. It can be done but you need to set yourself goals otherwise it is demoralising!

What kind of car does he drive. When I had to commute I drove the smallest cheapest most fuel efficient car I could get. The kind people mock. Even DH started borrowing it as it was so much cheaper to use. Petrol has gone up massively. If works in a city think about parking at edge and cycling the last bit especially if parking costs

@Baddit’s advice is really good.

We definitely felt an easing in the outgoings when DD hit 2 and the ratios changed.

The cars and petrol, together with the bits you have accounted for – MOT, maintenance, tax – are a whopping cost. I’d be tempted to swap some of the house deposit for an electric car and aiming to be a one-car household. Plus petrol cars are being bought for a premium right now for technical reasons I don’t quite comprehend (they’ve got rare bits in them?).

And I would think hard about moving. We’re in the south too, in London, and earn relatively well but not enough for a second child or to really live. You’d have to give up the grandparent help but in exchange you might get on the property ladder, choose somewhere with decent transport so you can give up at least one of the cars, etc.

You can make minor adjustments and find things don’t really improve much, or to get a significant, lasting improvement you have to look at the hard choices which can make a sustained difference.

These are looking for medium term changes, such as moving to a cheaper area and buying a small affordable property. In a cheaper area you might be able to afford a small house or it could still be a flat. The kids might need to share bedrooms.
Your choice is to continue renting and having a larger property, but one which will increasingly get more expensive or to buy small and have more affordable outgoings and build up some equity and also security.

It’s a hard choice to move away from family and start again, but every year people do it because they cannot afford where they live and if they stay they will never be able to buy or feel financially comfortable. They move and it’s hard and they make a new life. And several years down the line, they have the security they desperately wanted. It’s not a quick fix.

So yes, look at some quick fix ideas to reduce bills, cut out takeaways etc. That’s good. But unless you’re going to see a big increase in income, you probably need to accept you’ll have to move area and /or look for smaller properties than you’d like to get your housing bull under control and also prevent being in the rent-trap far into the future.