Worried about affording things - how do you do it?!

[loeylo]

Now that we are sort-of WTT and sort of ntnp, I'm really starting to think a bit more about finances and affordability.

We both work full time, our joint salary is in the region of £47,000 so fairly comfortable, and I'm still at a point in my career where I am moving up the pay scale for about another 5 or so years - by then we will be on about £60,000 depending on my partners job. So a lack of income isn't the issue. The problem is outgoings!

Our mortgage is only £400 per month, council tax is £150 and we are about £100 in gas and electric. We also pay £150 finance for our new kitchen (the house vitally needed one so we couldn't wait and save) plus £60 for our sofa, then £200 car loan and £80 car insurance. We are £200 per month on food (roughly) and the maybe £50 on other insurances. We also spend about £300 on commuting and £150 on petrol per month. My credit card is being paid off at £100 per month.

This means our wages are basically eaten up before any savings or "fun" things. I have no idea how we are going to afford a baby! Especially since our wages would have to drop.

Does anyone have any advice on how we can make things work better, or how I can convince my oh (and myself!) that it will be okay?! I see so many people earning significantly less than us and managing, it doesn't seem fair since we have both worked really hard and made a lot of sacrifices to get decent jobs to be able to provide for our kids, yet can't afford kids, and my cousin who has never worked, nor has her husband, can afford two!

 

[Caite]

My outgoings are way more than that. I'm on my own and probably bring home about £1800 per month (it depends on what unsociable hours I work).

Have you actually sat down and worked out what your outgoings are? From what you've put here, you have about £2000 left per month after those outgoings (though I wasn't sure if the £47000 was before or after tax? - obviously less if it's before tax. Perhaps you could set up a specific bank account for saving, and both put money in on payday. Are you sure you're not both spending unnecessarily?

 

[loeylo]

Before tax. Some of his wage comes in a lump payment in December which we use to pay for christmas, so per month we get just under £3000. When I add together our outgoings then we should have about £1200 left each month! So you are right it doesn't add up. There are some things I haven't accounted for like phones, tv and internet, the charges for our bank account loyalty scheme thing, and the £50 which goes into a savings account automatically which we keep for a treat at the end of the month. My partner also smokes so obviously that costs money too.

I don't know if it is just because we are still getting into a routine in the house - we are still doing bits of decoration. Also, I have still to build up a decent work clothes wardrobe and usually buy something each month (I need to wear my own clothes but need to be smart and comfy) plus I haven't accounted for little things like our weekly takeaway, but that is maybe like £50 per month. Then the weekend drinks. And the odd dinner with friends (maybe dinner or pub once a month)

I just don't know how we can cut back to a point we can survive on just one wage especially if it was my partners wage because his is lower!

 

[HelenJane]

At least your thinking about it early enough to save or cut back. There is definitely room for you to cut back and save, you just have to make some sacrifices but not huge ones

 

[pandabub]

When I became (unexpectedly) pregnant with DD, our combined wages were close to yours, and our out-goings were fairly significant (we were living in London - enough said).

We were able to afford it through careful budgeting and supplementary tax credits - in addition to this, my DH went from full-time work to becoming self-employed, which enabled us to reduce our childcare costs (to a certain extent). Everybody has unique circumstances, so I would advise you to take a close look at your monthly budget, as well as your current situation, and see if there isn't anywhere that you can make changes in order to allow for the additional cost of having a baby.

I know it isn't easy. In the end, we emigrated (back to New Zealand, where I was born) where, for us, having more children (and a more affordable lifestyle) becomes a possibility. However, I have plenty of friends in the UK who have babies (some on their second) and, whilst they sometimes struggle financially, are managing to get by (on modest salaries). Do look into what is available to you/what would be available to you were you to reduce your current hours (see here: https://www.entitledto.co.uk/) and perhaps make up a rudimentary budget to get an idea as to how it could work.

Good luck. x

 

[Angel_blues]

I have a budget sheet I can post if you'd like? It's in Canadian $ but I'm sure you could switch it

 

[Angel_blues]

Had to put it in PDF to post hope it helps!

 

[Pearls18]

My advice is to have a million different bank accounts lol, I segregate our finances down to the penny.

We have a Christmas saver, the boys each have a savings account, we have a joint account for bills, we pay for groceries on a credit card to get the clubcard points but transfer the money directly from our joint account to another savings account that is used to pay the credit card off by the end of the month so we're not waiting on payday we're paying on a credit card with what we have, we have a long term savings account, a short term contingency account and a car saver, oh and hubby has his own saver and we have individual accounts lol....it sounds crazy, but I treat account as an outgoing if that makes sense. All our money goes into the joint bed fore I separate it out and we each have an allowance to make sure we can spend some money on ourselves guilt free. I have a spreadsheet which details what we have coming in over the year and what expected outgoings, with a savings plan. Your wages are more than sufficient, it's just good financial planning that helps keep on top of things.

In your case the important thing will be working out what you will be needing to save (if you do) for maternity leave and then if you're both returning to work child care, that is obviously one of the biggest expenses and even if one of you doesn't you will then have a drop of income to consider.

 

[lucy_smith]

Is it possible to try and pay off the kitchen, sofa and credit card ASAP, that's an extra £210 a month back? Is there interest on these? Is it possible to get one interest free loan/ or put it on interest free credit card?
I absolutely agree with having lots of bank accounts!!!
We both have our own account for things like food that we pick up and going out which is the left over money after I put the other money in the relevant places, we have a savings account, a house account ( to pay council tax, oil, electric, phone bills, car insurance etc) and our current accounts and credit cards, we also have a joint account which will have out money in for building our home ! So I completely agree with splitting the money up when you get your wages!

 

[loeylo]

The sofa and credit cards aren't a concern as they will be paid off by the time a baby comes anyway. I upped my payment on the card from £50 to £100 and it is clearing the balance much faster. The sofa has about a year left but is interest free. Can't pay the kitchen faster as we still have four and a half years left (!!!) and it cost nearly £7000 - hence we needed finance for it!

The different accounts thing is a good idea. We each have an individual bank account - I never use mines, my partner uses his for travel expenses only. We also have a daily savings account but really need something more long term. I was thinkin about "trickling" our money into another account - having all our wages paid into the joint account then transferring say £200 per week into another account for spending, but having the bills already paid. That could work for us!

In terms of staying at home or reducing hours, it would really have to be my oh who cut back his hours. I earn about £4000 pa more than him and my salary is increasing so the gap will be bigger - up to about £14000 by the time I reach the top of the pay scale, presuming he doesn't get promoted before then. He also commutes three hours a day which costs significantly more than my £4 per day. So for us it makes sense - plus he hates his job!

I always struggle to work out what we would be entitled to - I will try that like and have a look at the budget too.

 

[LynAnne]

I think people live within their means. Some families can survive on less than £20k whilst others struggle with £60k simply because they spend the money that they have, if that makes sense. Even though my DH has had small pay rises in the last few years we don't ever see any more in our savings because we live within our means. Having a little more money means we'll spend a little more on ourselves just because it is there.

I have absolutely no idea how we'll ever afford to have a baby but our household income is much lower than yours unfortunately. I think if baby was on its way then you would learn to make little sacrifices which would allow you to afford your LO.

 

[Tasha]

I think it sounds like you need to do a month of both of you noting down everything you spend, even a coffee here, drinks there, it all adds up. That will help you decide what can be cut back on x

 

[Pearls18]

If neither of you earns more than...is it about £44,000? Around that, individually, you will be entitled to child benefit which is £20ish a week, so £80 4 weekly. (Combined income over £44,000 is ok, it's only if ONE of you earns over that set amount, from what you've said I gather neither of you do, yet).

Other than that it's probably best to just assume you wouldn't be entitled to anything else as the system is always changing, your wages are very reasonable though, you just make do either way, DH and I were not on anywhere near what we're on now when we had DS (unplanned) but there's ways to make everything cheaper, you're doing the right thing not going into it blind though

 

[Eleanor ace]

I think it sounds like you need to do a month of both of you noting down everything you spend, even a coffee here, drinks there, it all adds up. That will help you decide what can be cut back on x

This. I couldn't make out outgoings add up wile we were WTT and decided to note everything I spent. It was a real eye opener. Things that I had just chalked up as miscellaneous spending here and there actually deserved their own category- I was spending £30 a month on chocolate and treats, for example .
I think that a lot of people have to cut back when they have children- either due to financial pressure or because they don't have the time for things they were spending money on before, like gym membership, make up and beauty treatments, going out. Your outgoings will likely be different when you are pregnant/have a child, so try not to worry about affording everything you spend money on now aswell as baby stuff.
Looking at your outgoings I would suggest trying to pay off the things you have on finance, if possible, as that will take the pressure off. A few months of not buying take aways, cutting back on your food budget and going out less might mean you can pay off the sofa and kitchen, for example.
It seems like travel to work is a big outgoing so I'd see if there is anything you can do about that if possible. Does your OH drive to work? If so a car share could help, if he doesn't do it already. If he doesn't drive maybe he could find someone who does drive to the area he works in and pay them some petrol money, it might take time off his journey too. If he gets the train maybe he could buy a bike and cycle a few miles at the start or end of his journey. My brothers OH started doing this partly to save money and partly for his health and he has saved a significant amount by cutting off just 2.5 miles at the end of his journey because his ticket was a fair bit cheaper because he missed off a big station.

I definitely found finances daunting whilst WTT, it was my main worry. We are significantly better off now though, partly unexpectedly and partly due to OH getting promoted, but also due to budgeting better and no longer being bothered about things that felt like essentials before!

 

[Earthylove]

yeah i definitely agree with the others. It's a good idea to keep a very close tab on your expenses so you know how much you're spending. then you can ask yourself if those things are necessary and if there is some way to cut the cost. You may need to look into being more aggressive and proactive in saving, which can be done but may mean some lifestyle changes. One thing I've done that is helpful for us is to try to reduce, as far as possible, the number of disposable things i have to keep buying. toilet paper is really the only thing i buy that is disposable, but instead of paper towels, i use old rags or wash cloths, instead of tampons maybe consider a menstrual cup or reusable pads, instead of using one of those disposable mop things, maybe a regular old reusable mop. Also, i almost never buy things new unless it's necessary. You mentioned you need work clothes and things. consider trading in some of your old clothes at a consignment shop for gently used work clothes. I did that this fall and got $120 voucher for the clothes i traded in. I also sell my old clothes on online consignment stores (a good one is called tradesy). I also check sites like craigslist and freecycle for free things for the home. you can often find good quality and even name brand things that people are in a hurry to get rid of because they're moving or something.
Also consider eating at home and using the money you have at the end of the month for savings instead of treats. look into free entertainment in your area, rent movies from your local library, invite friends over for dinner and drinks instead of going out.

Speaking of dinner, another thing to think about is making things yourself instead of buying pre made things, mixes, or frozen meals. big bags of beans, rice or quinoa, and flour can go a long way and can be used to make a vast variety of things.

I also agree with someone else who mentioned doing a car share. Do you have public transportation where you live? maybe taking the bus or train on some days will save some money too.

Anyway, these are just some suggestions. there are also lots of websites that can give you ideas on how to aggressively address saving money and cutting expenses.

 

[confused87com]

its amazing how you just cope. i had to work part time once i had my son, was off sick for a lot of the pregnancy, but we still found a way. now my hubby brings home 2000 a month, me 1000, childcare is 500, plus 220 car loan, and general living, food. plus we have 3 cars ( theyre our hobbys!) money just seems to drain away, but we just dont have fancy things and huge holidays. We are far from skint, its amazing how if you are careful you manage. We are buying a bigger house, bigger mortgage, further to commute etc. all more expensive, just found out we are having number 3! a complete shock adn a worry financially but i know we will cope. Dont stress, just think when you spend. ! we got loads of second hand things for baby, no one even knows, you can save a fortune

 

[tinkerbelle93]

My DH earns around £24K and I am an open uni student although flit between part-time work and being a SAHM. We've managed fine so far (DS is 3). We lived in a shared ownership 3 bedroom that was £480 a month in mortgage and rent (although we're currently at my parents after selling up to look for a house in a different town) with £125 a month council tax plus all the bills and groceries etc. We did have to budget quite tightly though and have never had any credit or finance on anything (old-ish car that we saved up for, furniture on Ebay, a small but sweet wedding etc) purely because we wouldn't have been able to afford any extra monthly payments on anything. We receive £80 per month in child benefit which is a help for all the essentials for our DS. There are a lot of money-saving tips online to look at, I'd recommend starting with a spreadsheet to work things out and go from there

 

[loeylo]

Thanks everyone.

We are waiting on a cheque clearing into our account and we are going to pay my credit card off. We are also setting a £150 per week budget for food, petrol, pet food and daily expenditure (apart from travel to work) and see how we get on.

I guess we do just live within our means - I was a student for the first two and a half years of our relationship yet we afforded to go abroad three times, we had meals out etc and had the same disposable income that we do now. Buying the house on a whim (we saw it despite not properly looking, put in an offer and were accepted straight away) has meant we needed to kit out a whole house really quickly so we had no option but to finance things, which was not ideal.

We can't cut commuting costs as he already travels by train on the inter city line so it is like a 45 mile commute - he drives two miles each way to get to the station. We can't move closer to his work as I don't drive and we would just end up sending the difference on my commute. Driving works out more expensive as he works in the city centre and parking is at least £6 per day, plus no one really lives this far away for him to car share with. He starts work at 7am so I don't really like the idea of him driving from 6 in the morning to get to work and not leaving until 5pm on the way home, then not being home until about 7 because of congestion.

In terms of food, I make pretty much everything from scratch but I actually find it more expensive! We make our own pizza base and toppings, our own pasta sauces, our own curries etc and we even buy things reduced and freeze them (meat, bread etc) so I think we are pretty sensible on that front. Eating out is our downfall but I really look forward to it as our treat - we both work really hard and work really long hours and I feel we should be able to have a weekly treat

 

[Angel_blues]

For me having it down on paper really helped. I saved every single receipt over one month and I sat down and looked at where money was going. ALL of our bills are in my name. From mortgage to house alarm. He gives me a lump sum of money on the first of the month including groceries and I pay bills on the first and on each pay using a spreadsheet. I always have $100 in my account for my fuel and coffee everything else pays off bills and credit. My projected payment plan I should be debt free (except car and house) on March 1st!

 

[Tasha]

Loeylo, it's important that you do have that treat. Otherwise you will feel like you're working for nothing as it is ongoing on bills and savings, then it builds up resentment. It's all the other little things in talking about, grabbing a coffee, a cake, magazine etc. it all adds up.