Finances - does it all add up?

[Knakered]

Am I the only one who seems to be working for about £1.50/hr. I actually earn a very good salary - but take out my childcare costs for 2 (currently running at £85/day from my taxed salary) and I am left with very little. I go on maternity leave soon with number three and am wondering what is the point in returning to work afterwards so that I have job when the youngest starts school?? - in total 8 years of juggling/stress and for no financial gain. Some days I just accept the situation - other days when a minor blip throws the whole balancing act into chaos I feel very dismayed. Does anyone have any tips on how to reduce my childcare costs (currently I have a nanny so this cost should not increase with No 3) or ideas on how to trim our
household bills?

Fair point Sml. When we employed our very experienced and relatively expensive nanny, many of our friends told us we were mad. A lot of them went for a mixed Au pair/ Mother's help option and chose young inexperienced girls solely because they were cheap. 18 months on, in all 3 cases they have been through a multitude of carers and suffered the full gamut of problems from deceit, incomepetence to downright neglect. Not that it is the girls fault - they just didn't have the relevant experience and were simply unable to cope.

I sympathise hugely on the question of childcare costs and think its downright obscene that it isn't tax deductible. Also, feel strongly that it shouldn't only be well paid women in a position to enjoy quality and qualified childcare. Rather than tinkering around with SMP here and there, the government should be working towards a system where everyone has access to qualified carers if they choose to work.

I think I must be Mrs Mean. I don't work and my husband only earns £19.5K, which works out about £1200 a month of which £450 goes on mortgage and most of the rest of bills. We basically don't have anything left over for luxuries. However we always have plenty food and drink and we own a car.

To save money I use washable nappies, don't buy wipes (use flannels instead), buy all my son's clothes at nearly new sales, buy my own clothes in thrift shops or sales, don't buy any packaged food, don't buy baby food like special yoghurts, instead buy a large pot of yoghurt, buy 'value' products. Also my husband goes shopping every fortnight at around 8pm when they reduce all the nearly out of date stuff. Most of this ends up in the freezer. We save a lot of money on food this way. Don't buy tissues, use toilet rolls. don't buy magazines, make-up, perfume etc (usually ask for this kind of stuff for birthday/Christmas). Don't spend money on unnecessary meals out (save up for a treat), cups of expensive coffee or drinks out. If you do go out then take your own food for a very young child or take some off your plate.

I could go on... but it is actually about saving the pennies and they do turn into pounds. I am always surprised at my richer friends how often they go out for meals, drinks, trips to Burger King and the like and yet they never seem any happier for it.

We also have one proper holiday a year which is a last minute bargain break.

It is hard because for instance not buying convenience food means more time in the kitchen cooking and I often have to walk further to get to cheaper shops. However I have more time anyway due to not working so it all balances out. I feel that I am enjoying the time spent with my child and he enjoys so many simple things that cost nothing or next to nothing anyway such as walks in the park, playgroup and swimming. Also there is only one of us stressed and tired from being out at work all day.

My partner and I have just started a system whereby every Saturday morning we take £100 cash out of the machine and divvy it up between us. We have made the decision that all 'non-essential' spending, i.e. magazines, drinks, books, clothes etc has to come from this money. If we want something expensive, i.e. a new bed or a holiday then we have to save up for it. Any money we don't use during the week ends up in a pot which we keep in a kitchen cupboard. It's amazing how much we've saved. We've been doing this for about 6 weeks now and in that time have saved £100!! This is from money that we have budgeted for already so we can spend it on whatever we fancy. We are going to be using it as spending money when we go on holiday in Spetember. Hopefully by then we will have more than £200.

This way of spending means you know exactly how much you are spending during the week on stuff but conversely it stops you from spending money on tat or really unnecessary stuff. Sometimes in the morning I think 'I really don't want to make my packed lunch - I'll just buy a sandwich' then I think if I don't buy the sandwich I can put the money towards something I really want or save it in the jar. It really makes me stop and think about how I spend money. I used to use the credit card for everything - justifying it by saying that because we got cashback on everything we bought on the card it was actually saving us money(!). Now we only buy our weekly shopping on the card and everything else is a cash purchase. Much easier to bugdet.

I realise that this way of spending requires a certain amount of discipline but try it for a month and see how it goes. You might be surprised at how much you save.

P.S. Does anyone watch Alvin Hall's 'Your Money or Your Life'? I can't believe some of the people on there.

Good on you Eulalia - I really admire your disclipline and your sense of priorities. You sound very content with your choices. Makes me feel more than a little ashamed....

Thanks Croppy - I may sound very virtuous but we always make sure we have a bottle of gin in the house and plenty of wine! I would like to go out more but we tend to have friends round or pop round to their's at weekends so no money doesn't necessarily mean no social life.

Today I started a spreadsheet deducting all the direct debits so I can see exactly how much we actually have. I wish I'd done it before as it is so easy to update.

For July I've worked out after paying the bills and leaving enough for food and fuel we have £45.50 to spend on ourselves. And we've to buy our son's birthday presents out of that! Argh! We will probably get a sandpit from Argos - I think they are around £8. However any suggestions will be greatly appreciated.

Eulalia, I'm sure he'll love a sandpit, he won't care how much it cost! I am going to follow your example and do a spreadsheet for our finances. Have chickened out of it up til now as I'm sure it will be too depressing. Once I've done that, I'm going to try the cash only method. Don't think I can totally jettison my Switch card, so I'll try Debster's method - building up a pot of savings is an attractive idea. Bit like pocket money really.

I am not sure where the 4 year old came from on the main page. Our son will be 2 next month.

Yes I think a sandpit would be ideal and it might put him off throwing the gravel from the garden into the house. Unless that is he throws sand instead!

Lil, Madsahatter - I read my Melissa Hill book on Fri. Overall it was quite disappointing and rather irritating. Early on there is lots of encouragement to "go for it" and give up work - some bits I found quite motivational. However it then deteriorates into some poorly researched, light weight, often inaccurate, pop-psychology. It looks like her publisher/agent got the first draft (50 pages) and said you need to pad this out. The second half has no relevance to being a SAHM -- its a generic account of getting out of the rat race. It then seems to go some way to justifing this decision by going through how, before you know it, you will be running your own multinational/creating artistic works of genius/etc etc. I am considering being a SAHM because I want to give my children my quality and quantity time. It would have been nice for her to have talked through how she thought being a SAHM benefited her children, changed her parenting focus, drove her around the bend, was financially disasterous etc etc - rather than how all of the non family related activities (eg creating a collage from magasine cuttings!!!??) fulfiled her.

She is right in a sense about work not taking over everything but she seems to do so many activities that I imagine she is at home less than when she had a job. I think it should focus on money making activities you can do from home to stop you going around the bend. And of course, it goes without saying it could be aimed at everyone and not just women.

Debster - I love watching Alvin Hall's Money or your Life programme - it makes me feel so much better about my own finances! What about that couple last week who were adding over £300 a week to their debt. About time they brought a few a more value products and stopped grocery shopping at M & S!

I've just had a financial review with my bank manager which was great. Its good to be able to have such a good relationship with your bank. We're about to consolidate a couple of loans and its going to save us about £100 a month. The money we're going to save we are going to set up a direct debit and get it put into our savings account.

My bank manager told me that she's seen people come in with debts of up to £45,000 on their credit cards! How do they do that?! That is seriously scary.

Knakered, I agree totally about the book! I feel a bit guilty as I hadn't waded thru' the second half of the book when I wrote here, but I have since, and it was terribly lightweight! It was all airy-fairy getting in touch with your arty-farty imaginative side and spending the days rejoicing in nature. Nothing to help you with real life at all. I wonder if money just wasn't a problem for her, and so she didn't focus any thought into it. For the rest of us, as Jbr says, we could do with some money-making schemes and the effect it does have.

In fact Eulalia I think your experiences/lifestyle are much more realisic and helpful than Melissas. It does leave me looking for a more nitty-gritty 'I left work and its tough, but worth it' book!

Emmam - it's great you're sorting out your finances but one thing I would suggest is always clear your debts before you start saving. The amount of interest you get on savings is hardly worth it when you're paying interest rates on loans. I realise that it's nice to have extra cash in your pocket and that you've probably worked out a specific repayment plan with your bank but from a purely financial point of view it doesn't add up(!) To be honest it took me a long time to realise this so while we were paying our loan we had money sitting in a bank account doing bugger all. Our next headache is that we're about to move to a house from a flat and our mortgage is going up from £260 to £680 a month (gulp!)

Anyway, apologies for the dull, public service announcement nature of this message and good luck with the finances.