Please can you help me with a financial makeover (warning- we are rich)

[ohIdoliketobebesidethe]

After all the threads on money recently I have finally pulled my head out the sand and gone through our finances. I have looked at everything we have spent in the last 12 months. The money has all gone. All £106,000.

When I return to work in Feb, our childcare costs will be increasing and also in Feb our mortgage discount period will be ending and we will have to pay an extra £4000 a year in interest.

I know this is a undignified thing to do in our culture- but as you don't know me-I'm going to tell you where all the money went.

Any advice about cutting down any of it will be gratefully received. (eg. our landline/broadband costs seem high seeing as we barely use the phone, has anyone got a cheaper deal?)

3000 living where we live
400 having a car
2750 childcare
520 supermarkets
66 house/baby stuff
250 holidays
310 work related expenses
175 cleaner
180 charity
120 computer stuff
50 books
160 council tax
40 water
75 electricity
35 phone/ broadband
162 life insurance
140 healthcare/dentist/opticians
45 mobiles
120 presents
100 eating out
100 clothes
120 travel
15 newpapers
20 kids outings.

Please don't be too offended at what we spend. And I genuinely would like advice about cutting down.

If you're getting rid of the car then you can join a car club like Street car or Zip car if you need a car for occasional use.

I'm assuming you just want to cut down, not move, change jobs or massivly change your lives. SDo it's just eating out, monthy prezzies, charity and that strange 'computer things' expense.

My childcare is 650 because my children are school age, so we have an au pair, and cover school hols by taking off time (dh will take a week, then 1 take a week), going on holidays and a small amount of using holiday clubs.

When they were pre-school age we spent everything we earnt, because we had a nanny!

If you are thinking of employing a live-in nanny there is lots of advice on the childminder,nannies etc part of mumsnet. I loved not having to pick up overtired children from nursery and having snuggly fed children at home when I got home instead.

Didn't mean to worry you over the nanny thing, just wanted to counterbalance the 'a nanny will look after all 3 children,,tidy up and cook meals for the whole family for the same price as 3 kids in nursery' argument.
Live-in nanny is a good idea - the salary will be less than live-out and you won't have the worry of him/her being stuck in traffic on the way to work. Some nannies are really great at finding cheap/free things to do with the children so best to discuss this at interview.

Haven't read whole thread, but make sure you eBay everything you possibly can. I just got £45 for a carseat that my baby had outgrown (cost £89 new, we kept it in really good condition). Something that people might stick in the attic/garage etc, you might find you can get really decent cash for. With eBay, you do make crap sales as well and have to let things go cheaply somtimes, but overall it is worth it.

Clothes - if your DH needs expensive work clothes, then this should be his Christmas present from you and kids. Don't buy him anythign frivolous or something that will end up in a drawer.

Washing and ironing - wear clothes more times before washing. Then there will be less ironing and you will actually need fewer items of clothing overall.

Def. don't go on holiday. I have 2 young children and we've never been on holiday yet. I think we'll save the money for now and go somewhere when they are old enough to know they're on holiday.

Ouch at your mortgage payment! Do you have any money you could offset against it? Your monthly salary is large and that could save mortgage interest every day it languishes in a current account attached to your mortgage.

Books - ouch again! - try to sell these on second hand. Is there a website for doctors where you could sell them? Use a work photocopier to photocopy any bits you need to keep.

Presents - only buy for children, not adults like BILs SILs etc. Anything you buy for DH should be something he would have bought anyway. I have a rule now that I never buy anything that is a "gift" in the shops. I buy people things that they would have otherwise needed to buy themselves. And if they want to buy me something, I tell them some bits and pieces that I need and that would have bought myself anyway.

Go to moneysavingexpert.com as well. I find that great. Use a cashback website like topcashback.co.uk (I use this) and loads of stuff you buy online is eligible for money back.

Packed lunches for you both at work?

Can DH make his employer subscribe to the economist. Is it really necessary?

And my final tip...pinch stationery and printer paper etc from work

Another option is to speak to the nursery and do a deal with them. Ask for £ for 2 option. We have had both nanny and nurseries. Son learnt a great great deal from a brilliant nursery so you don't necessarily have to give up on it.

Nothing to lose by asking for 3 for 2 offer from nursery. Everyone is doing deals on everything now.

Do you know what? This thread has revived my belief in MN. Virtually all the posts have been constructive suggestions as to how seaside can cut down. No one has started on the "I should be so lucky to have that income" - probably because the thread title carried a wealth warning. Well done all!

This thread has been really interesting.... am going to make a proper spreadsheet of everything we spent last year..... am NOT going to share on here though

Seaside- you re doing really well on the supermarket shop for 5. We are 5 here and Sainsburys + a tiny bit of MS is more like 800+ per month - includes basic pack lunches for 4 , not much wine + the odd specialist food for allergies, no ready meals for kids, 50pc adult is basic cooked from sratch . Am I missing a trick?

Food - 6 in my family (4DCs) and trying to budget around £70 pw (happy as long as less than £85) in food.
This is only done by serious meal planning and absolutely only one trip to the shop per week (far less stressful).
I am allowed to get milk if necessary in between but otherwise have to improvise with store cupboard which is full of ancient impulse stuff and digging to bottom of freezer.

Hmm- last trip to Sainsbury's (tonight) was 170 and I didn't buy any steak. Will see whether we can stretch for a week but normally pop back in a couple more times in the week. I do the supermarket shopping because it is considered heavy lifting round here and the kids and DW think I am thrifty- obviously not.

Tacky- dats it! New shopping law passed in dah house!

You got it - it really does have to be a rule.
DH himbly admitted that he broke the 'shopping rule' by nipping in to Tesco.

It really becomes quite easy after a week or two and I'm quite smug(I know, fairly sad) about keeping to my personal rule.

alot of pasta, chicken (thigh - much tastier than breast) curry, cottage pie, simple cereal and homemade brownies in lunchbox instead of Penguins etc.

good luck !!

I haven't read a lot of the thread, just skimmed it, but am not sure if anyone has mentioned that a significant number of your expenses are tax deductible- professional subscriptions, newspaper an possibly even mobile phones. Apart from your housing costs which are eye watering, the others didn't seem unreasonable at all. It's just a hellish time having to pay for 3 lots of childcare.

It will get easier.

(fwiw I would try and stick with the nursery as the worry of trusting all your childcare to one person sounds like a stress too much. One person can get ill or have a personal crisis, but nurseries are always open. Also it sounds as if with both of you working you might need the social contact that you get in a nursery for the kids and also for you two.)

Only other thing that helped me is to shop at Morrisons.
Previously absolutely loathed this shop and much preferred Sainsburys but discovered a quieter Morrisons where don't have to fight the fight in the larger busier one.

MUCH cheaper and good deals.

But be easy on yourself and try your new rule at Sains.

I always thought Sains were fairly reasonable but have seen posts on MN saying it's one of the most expensive. Clearly Tesco out as complete scheisters!

Re. the food bills: Tacky is right, menus are essential and I love the idea of the no nipping in for extra stuff rule.

We've recently started on a downsizing kick on this front, and the thing to realise is that you really have to adjust your expectations.

I still buy organic/ free range meat, but not as often, and I'm cooking things like fishcakes with tinned salmon, gammon steaks with egg and chips - stuff that I used to regard as second rate, but I now feel quite smug that my latest bill (for 5 of us) was £115.

Pathetic in comparison with others, I know, but I'm still new to this stuff, and I'm breaking my DOs in gently to a life of chick-pea burgers (surprisingly tasty).

i can cook a very manly chick-pea curry (tasty with pitta bread/rice) as you are on the subject- another of my contributions to thrift round here.

With regards to your mortgage, ours is 300K and costs us 1200 a month. We did get a good deal earlier this year, maybe you could shop around and see if you could save on this, which is your biggest expense.

Then the nanny would be cheaper than your nursery, but only if you are happy with it. It would probably be cheaper to ferry your parents or inlaws in daily from France or Yorkshire than what you currently pay.

It's hard when you earn a lot to have no money left for saving etc.

I sympathise with your outgoings! Esp. childcare in London as it generally is non negotiable and you pay for what you get. The nursery I use is £1400 pcm. I do think if you are both working then you need a cleaner and you need holidays. I would rather go to a diet of beans on toast than give up my cleaner (I'd just spend my days arguing with partner about it otherwise). Going rate in London for a cleaner is 9-10 per hour.

Check who your banking account to see what you get in addition e.g Lloyds provide breakdown cover and travel insurance if you keep your balance in credit to a level. I know others so something similar.

money saving expert web page

Make sure you always buy your books from amazon and if you have to buy lots of text books work out if being a prime customer would save you money.

You would be amazed where Aldi and Lidl are - they do exist in London.

Agree about meal planning and ordering online - make sure you sign up to the stores and use the offers whenever they post them.

Don't do false econmony with things like broadband/phone/sky packages etc as often your'll spend hours on the phone to customer services which will send stress levels sky high and a waste of time which is in my opinion more precious than the money

One friend went through her wardrobe and 'remembered' some lovely clothes she re wore, and with the rest organised a swap party.

Ps how do you get time to read a newspaper!

Oh and if you said your dh likes his Economist, I think you can subscribe and get it cheapy cheapy, I'm sure I did when I was living overseas. Even now we subscribe to our daily paper, dh pays for it by direct debit every quarter because he likes the cricket reporting.

Childcare wise, the nursery should be discounting off the Nursery Education Grant (or whatever it's called at the moment) for your 3 year old's funded sessions. Check with them if it is being taken off. NEG starts from the term following your child's 3rd Birthday. It may not be that much though, here in Surrey I think it is around £8 per session.
With childcare it is important that you and your children feel happy with whatever care you choose to use. The difference between a nursery and a live-out nanny in London I don't expect to be that much. A nanny may save you a couple of thousand, but it could also add on additional costs - such as outings for the children plus travel expenses, food costs, heating and light costs, additional water usage (if on a water meter). It does come with some benefits as well - such as home cooked food, nanny doing the washing. Nannies also come and go, you need to spend time recruiting and managing. With a nursery you leave it to the nursery to manage it's staff.
You need to look at both options and weigh up the pros and cons, keeping in mind that you need to be happy with your choice, so you can go to work without worrying about your children.

Paying your mortgage off faster / cash ISAs are good forms of savings in the current market. My personal view is that share ISAs will be very worthwhile in the long term when/if FTSE gets to 3700 or lower. At 4200 not too bad either but I am not buying shares at present.

Idolike, what are your plans re: schooling? Private or state?

If private and your 3.5 year old is not far off from that, then bear in mind if you use a nanny, you will have to pay private fees on top of her wages, whereas if you use nursery, the nursery fees transfer seemlessly into school fees with maybe even a little to spare which will pay for holiday cover and perhaps breakfast/afterschool club or an aupair (£300 per month roughly + room) for the school run - aupair can also do the nursery run.

If you use a nanny now, you can still get nursery sessions for free once your dcs are past 3. The surestart grant (about £100 a month) - which is which kicks in after the 3rd birthday will pay for (I think) 5 shortish morning sessions a week.

TBH, your childcare costs will fluctuate from year to year, your children being at the ages they are.

Childcare cost milestones:

• when your youngest starts to need childcare (I assume you are on maternity leave at the mo)

• when your second hit 2, nursery fees drop a modest amount
• your dcs hit 3, surestart grant kicks in
• your older ones start school, issues of private fees (if you go down this route), holiday cover, before and afterschool cover and split school/nursery runs

I would look into how the landscape changes and plan it out for the medium term.

I would also add that £162 for life insurance and sickness cover is rather high. We spend significantly less than that on insurance, about $40 a month?

Can you and dh check that your employers are not already providing insurance which would cover what you are insuring privately?

In our case, dh and I each got life cover for half of the mortgage amount (which actually is more than what we need because we have since paid down the mortgage substantially but kept the life cover as it is). Living expenses will come out of employer's group life insurance which is 4x annual salary + pension refund.

We don't take private sickness cover because that is really expensive. Instead, we rely on our employers' long term disability cover which kicks in after 6 months. We can self-finance the expenses over 6 months through savings. Put the savings into ISAs for tax efficiency.