People will adjust their spending habits in order to afford their mortgage

Graham_Devon

shortchanged wrote: »

Holidays, Graham, you forgot about holidays.

But then again hard working people don't deserve them do they.

I had to be good. I didn't even include 3 ipads, a mac air or take aways.

Honestly, I'd seriously like to know how people can live on less, but live a normal life and pay the mortgage with a couple of young kids....as I'm obviously missing a large trick here.

I think sometimes people assume you have to start from their own personal position. That is with a fully furnished house, full suite of electrical goods, the computer they type on and the kids having flown the nest. Trouble is, that's NOT the starting point. All those things have to be bought, and from the example above, have to be bought from the spare £264 a month. But for a family, the people who will be buying those houses today, I'm really not sure how people achieve such minisule living costs.

jackieblack

Graham_Devon wrote: »

But you installed a solar system?

Yes we did, why?

Graham_Devon

jackieblack wrote: »

Yes we did, why?

Do you have a couple of growing kids and raise them on less than the quoted figures?

Just wondering how you manage with that monthly budget to install such a system.

CLAPTON

Graham_Devon wrote: »

I had to be good. I didn't even include 3 ipads, a mac air or take aways.

Honestly, I'd seriously like to know how people can live on less, but live a normal life and pay the mortgage with a couple of young kids....as I'm obviously missing a large trick here.

I think sometimes people assume you have to start from their own personal position. That is with a fully furnished house, full suite of electrical goods, the computer they type on and the kids having flown the nest. Trouble is, that's NOT the starting point. All those things have to be bought, and from the example above, have to be bought from the spare £264 a month. But for a family, the people who will be buying those houses today, I'm really not sure how people achieve such minisule living costs.

be a little more clear

you firmly believe that when interest rates go up the repossession will sky rocket because it's impossible to cut back on utilities, car, food etc?

why not make some predictions about the huge increase in repossessions so we can see how they pan out in the future?

ash28

Graham_Devon wrote: »

Well, were talking in general. Obviously i'm not looking for specific figures for each family, but a general household. Just ideas on what could actually be cut back for a general household.

The ONS produce a household spend report every year and in 2012 the average household spent £59.80 a week on Recreation and Culture, £39.10 on Hotels and Restaurants and £36.50 on Miscellaneous Goods and Services which is around £139 a week for the average household. Then there is spending on clothing etc.

http://www.ons.gov.uk/ons/dcp171766_297746.pdf

There will be wriggle room for most people I would imagine - they just might have to go without some things.

Anyone who had a mortgage during the 1980s and early 1990s has lived through this type of scenario before.....our mortgage more than doubled, it went from around £350 a month to £750 a month, rates were quite volatile and the majority of people were on SVR. It was a real pita but the majority of people survived it .....not all though. Our mortgage was for £60k....imagine paying £750 a month (we actually paid more than that for a while) for a £60k mortgage today......

We went from my wages being a nice extra to an absolute necessity as OH's wages covered the mortgage and related endowments, the rest of the household bills and his travel to and from work.....there wasn't a lot left after that. Mine bought the food and clothes for the kids (we rarely bought new clothes), Christmases and birthdays.....

How often do people pop into Costa or Starbucks for a coffee that costs around £3.......or buy a sandwich and a coffee that cost £6 or £7 or take their kids to McDonalds or Monkey Mates or similar.....A trip to McDonalds was a rare treat for ours until they could buy their own.

And how many clothes do children need? Looking the amount of clothing my grandchildren have they could clothe half of Berkshire.

People may not like it, but you do what you have to do to keep the roof over your head and if that means letting go of what I would term luxuries but my children would term necessities then that is what they'll do.

My DiL meets her friends for breakfast!!!!! They take their babies and toddlers with them after the school run and meet up......I used to go to my friends for a coffee..........

I know the report is pretty general but so is your post.

Running_Horse

One workmate took three family holidays this year. We treated ourselves to one more expensive special holiday. That is an immediate saving. We have spent the last few years reducing debt, which means lower repayments and we can now stop overpaying. Our car can be made to last an extra couple of years. Reduce nights out, babysitters, new furniture, days out, home improvements, take aways, expensive toys, and no doubt many other savings that can be made when push comes to shove. We have always seen low interest rates as a one off windfall, and will adjust accordingly.

ukcarper

Graham_Devon wrote: »

I reckon that would be pretty darn tight.

For a start there can be no debts, but I guess they would need a car, so I'm going to suggest £100 a month on car loan.

£150 per month on council tax.
£150 on electric / gas / water.
£240 a month on food.
£150 a month on fuel (for the average car and average mileage)
£15 a month on presents etc (thinking christmas)
£35 a month road tax, MOT, servicing.
£70 a month car and home insurance
£10 a month TV licence
£30 a month clothing and footwear (believe me, this is scrimping by when it comes to growing kids....one pair of shoes and that budget for the month is blown).

Now, after all of those, what I would class, quite low, the clothing for example I have assumed ebay prices for second hand stuff, but workwear could cause issues) but mandatory expenses for a family, were left with the grand total of £264.

That £264 has to pay for:

Any item of furniture / white good.
Mobile
Landline
Boradband
Any unexpected car repair costs (tyres, MOT failiure etc)
Prescriptions,
Any kids event or childs birthday
Any housing repairs
Any recovery (AA, RAC)
Any personal items (small items, such as hairdressing for a family of 4 soon racks up)
School meals
Dentists
Opticians
Any single hobby or event you undertake with the kids....even if it's paying for parking so you can take them to the beach / park
Any emergency.

Quite a long way for £240 to go, don't you think?

So, we'd HAVE to cut back. So, what goes? The washing machine never gets replaced? You never ever have to replace any item in the house? Broadband and PC, remembering the kids do benefit from this with schools now? Precriptions...a bit like those families in Greece?

Doesn't seem all that great in todays age to be having to get rid of this stuff in order to pay for a roof, does it?

Of course it will be tight I don't think any ones is saying it won't but it would be possible.

Graham_Devon

CLAPTON wrote: »

be a little more clear

I am being clear. My whole thread is clear. You appear to be turning my thread around and asking me to predict repo's. This isn't what this thread is about.

What would you cut from the list of expenses I listed? Or do you firmly believe £264 per month is enough for everything else once absolute bare essentials have been paid?

My problem is, too many people appear to be stating "families will just cut back". I want to know on what. You've said sky, but frankly, most people don't have sky packages, and definately not at £70 a month.

Graham_Devon

ukcarper wrote: »

Of course it will be tight I don't think any ones is saying it won't but it would be possible.

Yer, possible being the operative word.

Should we really be encouraging this? As that's what is happening. It;s on the BBC news that it's all ok and people will just cope. That's encouraging it. He said wages are not out of kilter with house prices, basically saying it's all perfectly do-able. That, in my mind, is encouraging people to get in. Theres no questioning of his "it's all ok" theory, but we can see how tight it would be.

One emergency would not be able to be covered on those figures. Just one. Hell, you can't even join in and have a PC and broadband or a mobile, let alone one each for the adults on those figures.

My issue is that people do seem to be putting a voice across that this race to the absolute bottom where families cannot cope with any single unknown expenditure, or even the relative living basics of today's wage is perfectly acceptable in order to buy a house.

grizzly1911

CLAPTON wrote: »

in concept

broadband or lose your house?

difficult choice

Well if it is down to the last £10 per month it costs I gues things would already be irreparably broken.

Telecomunications are a pretty key part of modern day living including job search, distance learning, banking, shift/job availability etc.