What do you honestly think about this financial situation?

[somewhereinthemid]

My husband (full time) earns £55k, I (part time) earn £14k. We own our own home and have an outstanding mortgage of around £175k (but we do have help to buy loan of 20% to factor in in 3 years). We have a 3 year old who has just started receiving funded hours but have a newborn too. Our house is big enough to last us so we don’t need to worry about moving. We have a nice car but it is on PCP. We did have a good pot of savings which got absorbed between buying our house and our wedding and we now have only £3200 in savings and at the moment we aren’t putting anything into savings a month. We live comfortably in the sense that we don’t go without anything, our house/car are nice, warm enough, enough food, little luxuries etc but we don’t live lavishly. At the moment we can afford everything but we are living relatively pay check to pay check in the sense that we don’t really have much left over at the end of the month and aren’t paying into savings.

My husband keeps saying that he can’t believe we are back living pay check to pay check, he earns the best he ever has and feels like he has less money than ever before. I feel like he could look at it a bit more positively, we’ve been able to afford to buy a lovely house in a nice area, have a lovely wedding/honeymoon, have two kids, me go part time, keep luxuries such as nice car, sky, Netflix and afford to keep ourselves warm, clothed and fed. Yes we are looking at another 3 years before we can start rebuilding savings but at that point I can go back full time, or atleast an extra day or two and my salary that has been eaten up on nursery/maternity leave etc will be available, even with my PT hours that would be an extra £1200 a month we currently don’t factor in and even more if I go full time.

This isn’t a stealth boast before someone says I just get so anxious when he makes it sound like we are practically skint and living right to the wire and o don’t know whether he’s right and it’s a shit situation or whether I’m right and we are doing quite well considering it’s only short term?

A year ago, those were our earnings (I've had 2 big pay rises taking me to nearly 20k).
While we spread out the big purchases a bit (and I earnt more prior to babies), we would not want to be saving nothing.
I would be looking to cut back the luxuries until your youngest gets free hours/oldest goes to school, and get some savings. Then pick up the lifestyle as the nursery costs fall.

It's easy not to be negative when the financial burden isn't on you.

If OP loses her job - she can get another one for a similar wage.

If he does, odds are it might not be as easy, and with no savings and living pay check to pay check how would that work?

Sounds pretty decent to me. I agree with pp that you could probably fairly easily free up £100-£200 by sorting through your budget and outgoings and trimming a few bits here and there (eg when’s the last time you checked your broadband deal? Are you paying loads for phone contracts? Could you cut down on lunches out?) to replenish your savings.

We also got married and bought a house in the past couple of years so our savings are mostly gone too, I think that’s to be expected.

But actually what on earth are you spending this on?

My partner and I actually have the same combined income. We don't have kids which I appreciate makes a difference but we're saving £1100 a month, dining out often, definitely don't feel deprived in any way.

Our mortgage is £1200.

I genuinely cannot understand where all of your money is going? I think with some budgeting you should definitely find some room for savings.

Really good position
Ok tough at present, debt is sustainable, jobs secure, pensions being funded, good standard of living even with cost of living crisis, you have just completed all the big ticket items- married, kids, house.
All good.
Look at day to day expenses.
Remember you are paying off a big asset every month in your mortgage. Its not a loan its an asset and you are on the ladder. Enjoy life! Its for living.

www.moneysavingexpert.com/budgeting-debt-help/

Err, perhaps childcare and other child related expenses?!

And getting actual pay rather than maternity might help too.

My post was @Miajk , quote disappeared

I don't know what the OP is paying but a full time nursery place for a 3+ with 30 funded hours was a little over £1100 at the nursery we used. It was just the village nursery that everone went to, nothing swish.

Ditch Sky TV and start a savings account. You will be loaded in no time.

So you have £3.2k in savings but over £4k in debt? Don't kid yourself that you have savings, you're actually in minus money.

How long will it take to clear your debts? By the time you'll start repaying the Help to Buy loan in 3 years time?

If I were you I'd go through your finances with a fine tooth comb and try to find cut backs, ideally, as others have said, on fripperies that add up (lunches, subscriptions etc).

I think your DH is forgetting you have 2 children though. Even for you to go full time seriously? So 2 kids in nursery?

I think your DH should be grateful. No idea if you could save money or not without a breakdown.

I think when you're partner is saying that things feel stressful and worrying, listen. Ask him what would make things feel less stressful. Doesn't meanyku have to do whatever he says, but take him seriously.

Tbh £3500 is almost nothing in the context of your lives. It doesn't really matter that it went on big tbings - you're still a month away from serious financial trouble. I would aim to tighten your belts until you have got six months' outgoings saved. Work out what it's actually going on - I used to spend too much on presents for example. There's years worth of TV shows and whatever if you have iplayer and YouTube (though you may find if he's faced with losing Sky Sports he thinks again).

Pre kids we were saving similar which is how we could afford a nice big house, fully kitting it out to a nice standard and the wedding and honeymoon we had. With higher outgoings from the big house and the cost of kids/childcare and loss of income from maternity leave x2 the money just hasn't been freed up since for us to start saving again. We probably do burn a lot on trivial things like subscriptions, coffees, food out etc so will maybe try putting an amount in savings on payday and living off what we have left as opposed to saving what we have left as we end up spending everything!

Thank you for explaining I thought funded hours meant the nursery was paid for.

That makes sense. I think there might still be a chance for some small savings depending on how the current budget looks.

We probably do burn a lot on trivial things like subscriptions, coffees, food out etc so will maybe try putting an amount in savings on payday and living off what we have left as opposed to saving what we have left as we end up spending everything

Sounds like a lot of non essential 'nice to haves' have crept into your regular spending.

You're not living 'paycheque to paycheque' you're just buying yourself more nice things.

Definitely be honest about what are essentials and what are luxuries, and make sure you put away a decent amount in savings for annual and irregular expenses like insurance, car repairs etc and Christmas, holidays, car replacement and an emergency fund, before you spend on non essentials like food and drink out of the house, subscriptions etc.

Have a look at Moneysaving Expert. Lots of ideas on how to reduce the cost of broadband, TV subscriptions etc, which will make your money go further.

www.moneysavingexpert.com/family/money-help/

I think I'd do more than that. I really recommend doing a thorough budget. Go through all of your outgoings to reduce those that you can. Allocate a proportion of your income to all the fixed costs and essentials such as groceries. Put a chunk into savings. Only then will you know what your true disposable income is.

I suspect you'll be surprised at how much you spend on non-essentials. You've both earned this privilege, but it's an eye opener to realise how you've slipped into spending on things that you don't need.

Yes the 30 free hours does make it sound like a complete freebe but it's not if you're using a day nursery that does full working days all year round. Essentially for us it was a handy discount but not anywhere near free.

Bit of a nosey Q. but I’m interested to know how much your wedding and honeymoon cost @somewhereinthemid? It’s just that you mention wedding costs in your OP.

At least £500 of the £1500 bonus needs to go into savings. Keep christmas to your means and give the 3 year old a lovely time but otherwise keep it minimal and to a budget.

If you had a honeymoon recently and moved id forefit the weekend away. Until you get your savings up a bit and some debt paid off.

£100 a month into savings and £100 on to debts. By budgeting strictly. Keep tabs on what you are spending and understand exactly where it all goes.

You need to start budgeting so the savings can increase and the debt can be paid off. The December bonus should be allocated (half savings and half debt repayment) forget spending it all for Christmas and the trip away. You are in an OK financial position but with a bit of willpower and trimming here and there it could be so much better. I would save enough for a 6 month rainy days fund (at least), then I would save up for the help to buy loan. I wouldn't want to add it to the mortgage if I could help it as we don't know what the interest rates are going to be in 3 years time.

You are in an ok situation. But you have more credit card debt than you havd savings. So your DH is correct that you need to find a way to be putting a bit by into savings. The December bonus I would try and save at least half of it. With DC that young, I can’t imagine Christmas and a weekend away costing £1.5k.
I would also consider what I do and that is every week I have a standing order of £50 go from my current account to a savings account. On good months, my savings builds up. On a bad month, I can just move a bit back from savings into my current account. It helps me because I tended to look at my account and mentally think, ah I have £x until my next deposit/pay day and I’d adjust my spending to match that £x. But with £50 coming out every week to go to savings, that £ amount is now less and I find myself usually able to adjust to that by buying cheaper groceries or skipping a treat.

Move the savings into a long term savings account or a premium bonds account. This stops you from dipping into your savings easily & forces you to make what you've got left last longer.

You can make easy changes to make savings such as:

• Look at free activities for dc
• Take packed lunches & drinks with you when out
• stick to a monthly budget
• look at all your outgoings & swap to cheaper deals
• cut down your luxuries
• use all money towards your debts & into your savings accounts
• look at pre loved toys & clothes for dc
• sell off unwanted & outgrown items on vinted etc & put money towards debt
• cut down on your Christmas budget & buy for a smaller circle of people & stick to a strict budget
• have a look on the Christmas board for the bargain thread #Thread 17 - the one with nice slappers for bargains & codes

I encourage you to reconsider spending £1500 on Christmas when your credit card debt is higher than your cash on hand. Your OH is right to worry if you have not just used up your savings, but are actually starting to carry non-mortgage debt. It does sound like you’ve got the room to adjust your spending to get debt-free and then start building up savings again. The time to do that is now though.

I would be very worried in your situation; your credit card debt is larger than your small savings, you have a car on credit and an additional large increase in your mortgage coming down the line against a potential drop in house prices. I would be cancelling Sky, cutting back on the expensive Christmas and paying down your debt.