Barely getting by on £75k, what's wrong?

[MariaDingbat]

We are two professionals in the civil service on a total income of £75k and we're barely making it to the end of the month at the moment. I could really use some tips on what we can do to save money and get an emergency fund together.

The past 4 years have been busy financially, we bought a house and had 2 kids, so all our savings are gone between house and two mat leaves. We planned financially in 2020 and had a lot of wiggle room predicted but between childcare and mortgage increases, fuel, energy and food costs going up we're close to £0 at the end of each month with no savings. Our take home is £4050 p/m (after pensions, tax, ni, student loans). What small amount there is left gets eaten up in fixing the roof or servicing the car or something else unexpected.

Our outgoings per month are:
Childcare - £1220 (3 days x 2 kids)
Mortgage - £830
Rates - £170
House insurance - £85
Car insurance - £65
Road tax - £15
Petrol - £200
Gas - £200
Electricity - £100
Food - £500
TV licence - £13.50
Parking - £75
Car payment - £210
Kids essentials - £50 (clothes, toiletries etc)

We're in NI so there's no free childcare hours so this is the childcare bill for at least the next two years. Any help or advice would be very welcome.

Honestly, short of getting rid of the car payment, I think this is you for the childcare years unless you can up your income. We're just coming to the end of it now (youngest goes to school in Sept).

You don't list any money there for socialising, birthdays and Christmas, days out etc. Are you doing any of these?

Is the car payment a loan or a lease hire? If it’s a loan I presume that’s short term and you will soon be better off, once that is gone you will have approx £487 per month spare which isn’t so bad. It’s the transport and associated costs that are high, can you car share or find cheaper or free parking even if that involves walking part way?

Hi OP,

have you considered keeping record of what you’re spending for. Month? From what I can see you spend around £3733 so would have left around £316- as a family of 4 maybe keep £200 fun money then you could definitely reduce your food bill- try meal planning and make multiple meals out of same ingredients to keep cost cheaper e.g large cooked chicken could make roast and then maybe a curry the next day. I think you could save £100 or more on your food bill so therefore could save £200 per month. Have you considered a childminder if not already using as normally cheaper than nursery? X

This is the childcare years. It will get better.

Maybe it's just like this in NI but isn't your house insurance crazy? Mine is about £150 per year for an £800k house.

What are your working hours? Could you both work compressed hours to gain more days per month not working? Tbh, I'd just expect to be skint for a few years until your childcare fees drop.

House insurance and car insurance both seem high- are these competitive and do you shop around?

Ok so your joint take home is £4050 ish.
Your outgoings are 400 less than that.
You probably need to do a spending check over a month to see where that 400 is going.
You also get £172 child benefit a month. So nearly £600 unaccounted for.

Same position here. Joint income of around£80k but always low by end of month. Childcare bill of £1100 too. I can't wait until these payments are finished, it's soul destroying being so poor 😞

Could one or both of you get promoted? Your house insurance is very high.

So the car(s?) cost £500+ per month, so almost 15% of your income. Are there alternatives?
I also reacted on the house insurance as I pay £400 for a house in London.

The outgoings you list will be hard to reduce - unless your mortgage is likely to come down when interest rates fall? But there will be other costs that you haven’t listed. For example, you don’t mention mobile phone contract.
Are the electricity/gas bills annual averages? If they are winter bills, you will at least see a reduction as we come into Spring and summer.
I suggest keeping a record of everything you spend for the next couple of months - then you might find something else to cut.
Any chance of promotion/ pay rise any time soon? Overtime? Might be an impossible thought, but do you have any options for increasing income rather than reducing costs?

Your spending £565 on your car

Surely there is a cheaper option, it's costing you more than feeding your family each month.

Your energy bills are way higher than mine. I pay 1/3 what you're paying - can you get that down? Also I reckon you could knock £100 off your monthly food bill
Insurance is v.high too at £1020 a year

I am sure if you start looking at those things you could gain an extra £3500 a year

Thanks for the great suggestions, but unfortunately our food shop includes nappies and formula, which are so, so expensive right now. A box of formula used to cost £10 for my first child, the same formula is now £14 a box. Hopefully when the littlest is fully weaned that will come down too. It's so frustrating, we're eating much more frugely than 2 years ago but it costs more.

Childminders are really expensive where we live and have a massive waiting list unfortunately. The nursery there in have an attached preschool that they're guaranteed to get in and it won't cost any extra so we'd like to keep them there if we can. Otherwise we will end up paying for 3 full days of childcare and additional collection and food fees, which would cost more.

You are spending an awful lot on your car. That insurance is v high! (Or is it for 2 cars?)

Otherwise yes the nursery years are savage. But it gets better after that.

Oh yes and your House insurance seems v high too. Ours is much less than that for a big 5 bed house.

We're similar income and outgoings to you. It's shit. I just have to think that the childcare costs (and ours are £900 for one child) is an investment so I can keep my job and keep progressing. Are you working full time with that childcare bill? Seems low for full time and not saying you should work FT (I don't have a choice...) but that could be one way out, dependent on another sacrifice

We’re working on the childcare issue, it’s crippling. Check out melted parents NI on Instagram!

Is one of you working p/t? Could either /both of you do compressed hours instead to get salaries up? (Or I used to do a lot of overtime as I could WFH once the children were in bed- tiring as I was a single mum by then but really helped)

It is ridiculous! Our renewal quote was £1700 this year but I bartered them down to £970. We share a post code with some riverside houses that were built on a former flood plain that hasn't flooded in 40 years and has new defences, but insurers just type in the postcode and say no so we're stuck with a specialist flood insurer. It's a bog standard 4 bed semi detached house, so that's not the reason it's so high 😂

We're both full time at the moment, but civil service and in NI so even though we're at the top of our payspine, our wages have stagnated without an Executive for the past few years. There's no overtime available in our roles unfortunately as we're in the professional grades.

I think you might be able to get better deals for home and car insurance, perhaps?

Our monthly food bill for 2 adults and 2 teens is just over £200, eating mainly plant based. I know you said you're also paying for nappies and formula out of the £500, but even if you manage to trim £50, it's a saving, right?

The childcare years left me in debt for the first time in my life and I found it so stressful. We made some radical changes, temporarily really downgrading our expectations of living standards, which was actually OK. I sold lots of things on eBay and FB Marketplace and was genuinely grateful for every tenner made. Wishing you all the best ‐it'll pass.

It's a loan but we still have 3 1/2 years left on it. We pay £6 a day to park in a government car park, it's the cheapest possible parking in our city at the moment. We live in a rural village and the one bus in and out a day would cost us £12 return each day, so driving in and parking is the cheapest option right now. We work a few days from home when we can do don't have to pay those days.

Thank you for the kind words. I've spent today putting up baby things to sell on Facebook and vinted so hopefully that will help.