Does this make us ‘comfortable’?

[Missteeside]

Hi

first of all, this is NOT a stealth boast. Just looking for perspective.

i’m super excited to Be going back to work as a teacher in September, full time. This will make a big difference to our finances.

we have worked out what our budget will look like from September onwards. After all mortgage bills and direct debits we will be left with £2300-2400 per month. From this we’ll need to buy food and fuel. Fuel is about £150 per month.

dh thinks that this makes us ‘comfortable’ but I disagree and think this is quite a lot of ‘disposable’ money.

our mortgage is fixed till 2027 so we’re safe from any hikes till then.

surely this makes us more than ‘comfortable’? I really want to save a big chunk of this money

OP, it is stealth-boasty!

Surely you realise that if you weren't having full time childcare provided by your ILs, your position would be quite different, and like many others. You'd be ok, but a significant portion of your disposable money would be eaten up by childcare.

You're not paying your ILs I take it?

I would certainly put savings aside for any eventuality where this doesn't work out, and you need to pay for childcare

As a minimum, I would calculate how much your mortgage would be if on a tracker at current rates, and save the difference in a high interest account/ISAs.

You'll then be used to paying what would be the current mortgage amount at current rates rather than the % you locked in which I assume is lower than the current savings rate for longer term investments. In 2027, I'd then use the lump sum thus gained over the 4 years to pay off capital when you remortgage. It may well improve your LTV and thus allow you a lower rate, as well as reducing the amount you owe and again result in lower repayments.

You should be comfortable if no childcare costs. Are your in laws really happy to do full time childcare for presumably a young baby/toddler assuming you are returning after maternity leave?

Yes.
I would save/invest £1K pcm in a stocks and shares ISA and use the £500 pcm towards holidays/leisure/entertainment.

If you were keen to pay down your mortgage, I would spend less on the holidays and increase the mortgage overpayment.

Precisely this.

Does it matter if you’re ‘comfortable’ or ‘have a lot of disposable income’ - it’s basically the same thing?

What you need to agree on is how much you save.

You have practically described my family finances and I have been living this for 18 months since I went back to work Ft. We are also fixed until 27. We save one salary and rest goes on bills. So, we spend £3k and save about £2500. I feel very fortunate yet still watch the pennies so we have not changed our lifestyle from our poor days. We are saving to pay off mortgage so we don’t have to face any interest hike, whilst also £500 goes to holidays and any bonuses or if we have a frugal month I’ll buy a bit of gold and then put rest in index funds.

‘Comfortable’ means you don’t have to worry about lonely.

I wouldn’t describe you as ‘wealthy’, so yes, ‘comfortable’ is right.

Figure out now much of that disposable income you want to direct into savings, and you can start to build a decent fund.

dh thinks that this makes us ‘comfortable’ but I disagree and think this is quite a lot of ‘disposable’ money.

To me, comfortable means having quite a lot of disposable money for spending and being able to save quite a lot every month (at least £1000). I'd agree with your husband that you're fairly comfortable.

And I’m sure it goes without saying that you are doing some very nice things for your in-laws, and not taking their incredible contribution to your family for granted.

After mortgage bills and direct debits you have £2400 left is that correct and one child? I'd say definitely comfortable!

Look at it this way, your £2400 "food and fuel" money is more than DH monthly take home before any bills etc and that's sustaining 6 people.

I would be looking to set up savings and get the mortgage down and any debts paid off personally so that if the in laws can’t look after DC or anything changes you have a good safety net.

This is what we have left after all the direct debit bills come out and it's just enough but I never feel like I'm rolling in dosh that's for sure!

This is not a v nice thing to say! You have no idea why the OP and her DH have no children. Maybe they're struggling, maybe they've been through losses, maybe they simply don't want children. Also, there are a lot of people who have both children and money. Sorry if that's not your case.

I wouldn’t class you as comfortable or well off. You havent mentioned savings at all, we save £1000 a month and that isn’t really enough when you factor in on top of MOT, insurance etc we need to save towards two new cars. Do you already have 6 months of both of your take home pays in a savings account in case anything happens to your jobs? What do you have saved towards holidays, Christmas etc?

dh thinks that this makes us ‘comfortable’ but I disagree and think this is quite a lot of ‘disposable’ money.

I think you are both saying the same thing.

You have enough money left over that you are not worrying over watching every penny and can live "comfortably" with a moderate set of treats/luxuries. You're not so well off that money is no object. Further cost of living rises and the increased costs relating to a child getting older mean that you may well find the money being eroded. Also, if you've been off work for some time, you may well have stopped/reduced spending on some things e.g house maintenance and find that the money starts going there. Plus you have a cushion for the "whatif" scenarios - in-laws no longer providing free childcare, for example.

Do you have savings, OP? Sorry if I’ve missed this despite having rtft

Depends if you are contributing enough to pensions and savings too to deal with the regular costs that are one offs that come along - new car, new boiler, new kitchen, new sofa, rainy day fund, new washing machine etc

Are you saving for children's futures such as uni?

I agree with you OP, it’s more than comfortable. You have about £20k a year surplus cash, so yes I think if it were us we would enjoy a few nice meals/takeaways a week (5k a year), and a couple of nice hols (15k a year).

But OTOH, it’s not really surplus, because you also have mortgage debt, so overall you’re not as cushty as you might feel. Maybe focus on paying the debt off first and then enjoying your cash.

Great position to be in though OP, and best of luck in September! I’m returning to work as a teacher too, soon, excited and nervous!

To me, being comfortable isn’t really about monthly income, but what you have saved and how much you are prepared for the future. Of course, having a decent income which exceeds basic expenditure can allow you to build these savings, but it takes time.

So, how much do you have in savings? Could you happily replace a couple of white goods? Could you replace your car? Are you able to fund pension contributions and have done so already to create what would be considered decent for your age?

To me, it’s not just about having spare left at the month (although I realise that’s a luxury many people can only dream of) but money behind you so you do t have to worry about unexpected large expenses. It also means when utility bills double or when mortgage rates rise substantially it can be covered without serious worry. It also means that when something comes along that you’d really like - such as an expensive school trip for your child, or an expensive item for a hobby, you are able to choose to have it without making sacrifices elsewhere.

I’ve known friends with better incomes than us, but when their car has conked out, they couldn’t replace it without a loan. When one got divorced, she couldn’t fund the legal stuff without a gift or loan from her parents.

We save £2500 per month after everything is accounted for

We holiday well. We could drive nicer cars but we don't feel the need for fancy badges (Volvo & Mazda here)

No debts, Civil Service pensions, five bed house, six figures in savings - house deposits for the kids sorted etc.

I'm still not "comfortable"

It's an attitude more than anything. I could have £10m in the bank and still feel like I could do more

I buy bread from Lidl at 44p. I buy toiletries from Home Bargains and try to avoid paying full price for anything. Vinted is one of the best things to ever happen to me. I check and update my spreadsheet numerous times a day

We do prioritise holidays with the children and ensuring they have experiences - but I'll never feel like I can take my foot off the gas with money, so to speak

Outside of MN, so looking at families across the country, it makes you extremely well off, as you well know.

I'd say the word 'comfortable' in terms of money though is very much an emotional reaction rather than something you can measure.
Some people wouldn't be 'comfortable' until their mortgage was paid off. Some wouldn't be comfortable if they had to check their account before making bigger purchases. Others would be comfortable if their income were just a couple of ££ higher than their outgoings. It sort of depends what you are used to. It also depends on things like how secure your dh's income is (yours is likely to be, as a teacher), and how fit and healthy your childcare (parents) are. But it also depends on life expectations for you and for your dc - if you, as a family are used to 2 foreign holidays a year, and membership of leisure clubs or season tickets to places, your idea of a 'reasonable' amount of spending each month is different from the vast majority of families. But the feeling of being 'comfortable' is linked in with that.

Comfortable to me means you can pay your bills, food and luxuries/leisure expenses and still have money left over for unforeseen expenses and saving. You can probably feed 2 of you for £200 a month easily so yes I'd say you'll be quite comfortable.

Now would be a GREAT time to invest in YNAB budgeting app. It helps to quantify EVERYTHING you need to allocate for eg car tax / repairs / insurances / Christmas / DC birthdays / "homewares" (I don't really know what this is but I know I put a lot of money into it mostly via Amazon )

Then you can see exactly how much actual "savings" you can build up vs "savings for expenses that we know will be needed in the near future"

Firstly, it will help you answer your question when you see it broken down in black and white to every penny.

But mainly it will make sure that you don't waste your new found wealth!

I agree that feeling comfortable is a state of mind and different people need different amounts/circumstances to feel like that.

I have a friend who says her parents have hundreds of thousands in the bank, a big house and big pensions. They still worry about money and ask my friend to have short showers and to turn the lights off all the time. Actually, Perhaos that’s not the same as not feeling comfortable, but simply feeling the need to be thrifty. Apparently these parents grew up fairly poor and their grandparents were in poverty. I’m sure it has a lot to do with how we react to money.

As a PP said, some people never feel comfortable, no matter how much they have. Every expense is a source of upset to them.

Feelings of contentment, peace and being satisfied are hugely important. I’ve known people in terrible financial straits to still be able to experience these. I’ve also known people who are totally loaded to lack all of these and thoughts about money habe dominated their lives.

Perhaps feeling comfortable means you don’t dwell on money. It doesn’t necessarily mean you give zero thought to it or aren’t prudent, but you feel secure enough in what you have, to not be thinking about either your monthly bank balance or overall financial picture very often.

Comfortable for me is two things. Is there anything uncomfortable for me now. Am i cold, hungry, frightened, cramped, unsuitable dressed, in pain etc. If not i am comfortable. The second element is how long will that last / how secure do I feel. So I still feel a bit uncomfortable as my next mortgage rate rise could mean a lot of my comfort disappears. The state of the nhs gives me concerns about a health issue so i"d like to afford healthcare.