How much income that you can live comfortably with?

littlewillow87

We’re a family of 3 with the joint income around £68k.
After tax and childcare voucher, our net income is about £3800, which is higher than UK average income but we’re just about living ok with the income, definitely don’t feel rich.
I cannot afford luxuries, cannot afford Waitrose or M&S, constantly look out for sales and reduced items.
At the moment, Our biggest expenses are £1000 on mortgage & council tax, £1000 on childcare monthly, then the rest will be for car, home improvements, holiday, etc.
We’re budgeting very carefully, £70 weekly for Groceries (which we’re still a little bit struggling), £40 for entertainment (treats like cinema/ meal out once a week), and £20/ week for each of us for lunches and bus.
We manage to save £200/month for emergencies and hopefully pay off a lump sum mortgage at some points and £100/month for a new car when we have another baby… And that’s it, all our money gone.
I’m worried that we will struggle when we have a second child, have to pay 2 nursery fees, and I may not be able to work as such. I see other families with 3-4 children and still live well so I’m wondering if we need to manage our finance better.
How about you? How much is your family income and do you feel like you’re living comfortably?

grumbler

Well, you have to post a proper SOA as your figures don't make much sense:
3800-1000-1000=1800.

Indeed, ~ 1000 p.m. mortgage is a big burden - especially for a family with child(ren) and if you add indefinite 'home improvements' on the top.

Unless you already have decent savings, saving £200 p.m. is far too little.

SOA Calculator

Goldiegirl

As Grumbler says, a SOA would be useful.

I'd also suggest that you complete a strict spending diary for a few months, so you can see exactly where the money is going.

All those coffees, snacks and magazines add up - it may be that a large chunk of money is being spent that you don't even notice.

Lastly, I'd suggest that you don't compare yourselves to other people. Their incomes, outgoings and attitudes will be different to yours. There'll be some people who feed their families on one chicken a week and never leave the house....... But they will comfortable on a monthly income that other people would consider a pittance. Equally, there'll be high earners who spend money that others would regard as profligate.

Just concentrate on you and your family, and find you own level of comfortable.

littlewillow87

Thank you all for your replies.
Yes I also think £200 for emergencies is too little, that's why I'm worried.
I'm listing all our monthly spending here (just realised the income is higher than I thought - 3900 after deducting childcare voucher. I'm trying to squeeze other categories so that more can be put towards saving and giving away. If you can see any item that we can save, please feel free to comment.

Income (monthly): £3900

Outcome (monthly):
• Childcare (after childcare voucher) £500
• Mortgage: £780
• Council Tax: £190
• Factor (this seems a lot to me but nothing we can do): £140
• Electricity & Gas: £100
• TV Licence + media package: £46
• Bus (1 day a week for 2 person): £26
• Professional Subscriptions: £9
• Mobile Phone for 2: £43
• Life Insurance: £10
• Giving away (we feel blessed in many ways so we'd like to give away if we can): £150
• Car running costs (Service, MOT, tyres, brakes, parts etc - I found this is too high but we counted the bills from previous years and it's £1200/year!!!): £100
• Car Insurance: 37
• Car Tax: 13
• Car fuel - To work, day out, visit parents: 230
• Lunch & Small Spending make-up, hair cut, exercise for 2 adults: £195
• Food & Household goods (consumables) for family of 3: £305
• Entertainment (cinema, meals out): £180
• Furniture and Home Improvements: £130
• Clothing : £43
• Medical and Dental : £44
• Holiday fund (this is a big expense but my family are abroad so we will need to see them every year - cost us at least £2500 each trip): £300
• Visa (I am foreigner so had to spend so much in the last few years for visa, £1000 anytime to renew, this will stop in 3 years time when I've got the citizenship): £65
  
  All leaves us with:
  
• Car buying saving (so we can get a bigger car in 2 years): £100
• Savings (for emergencies & mortgage lump sum): £200

bouicca21

£100 a month for gas and electric is three times what I pay - and I mainly work from home. Presumably the reference to a factor means you are in Scotland, where it is colder than down south, but surely not to that extent, especially as given your expenditure on entertainment, exercise etc plus presumably full time work, you can't be in that much?

You have a media package and spend £180 on entertainment as well? You could cut that down without significant impact on your social life.

lunches haircuts and exercise at £195? Another obvious target.

What it really comes down to is that your budget shows that you spend a great deal on going out, whether cinema, restaurants or gym. You need to make a decision about what is most important to you, saving or lifestyle, or a better balance between the two.

I get that people think saving £200 a month isn't a lot - but when I had young children things were so tight I couldn't save a penny and I couldn't finance meals out etc either. So I think you are actually doing well. You could do better, but the question is, do you really want to? Life is to be enjoyed.

GwylimT

As a family of five we live comfortably on £35k a year before tax.

Why are you spending £130 on furniture?
Why are you spending £180 on entertainment?
If it was lunch and Small spending it wouldn't be almost £200.

grumbler

bouicca21 wrote: »

£100 a month for gas and electric is three times what I pay

It's hard to believe. We pay ~£80, and it's a small pretty modern (i.e. not very inefficient) house. And no, we don't waste energy. The thermostat is on 20C and the heating isn't on 24/7. The boiler is pretty old, but I don't think this makes a big difference for a small house.

Goldiegirl

It depends on how much you want to cut back on your discretionary spending, but, as the previous posters have said, there are lots of areas that could be trimmed, if you wanted to.


I'd also highlight the holiday.


I know family can be a cultural thing, but do you NEED to see your family every year? It'd be nice to see them every year, but it might not be classed as a necessity.


Perhaps you might consider visiting them every other year... or perhaps they could visit you some time?

shegirl

Tbh I'm not sure how you can say you can't afford luxuries (and even more so then quote how you don't shop at Waitrose?!?!?!)

£195 a month on haircuts,make up,lunch an exercise. Many would consider this a luxury tbh

You give away £150 a month. Nice,good for you, but you think you're struggling and have no luxuries despite having them.

£180 a month on cinema,meals out etc

£130 a month on home improvements and furniture? What are you doing?

£20 per person per week on lunches?!

You save £300 a month for holidays, £100 towards a new car and £200 for emergencies. So in reality you are saving £600 a month.

I think you can very easily make cuts and you certainly aren't without 'luxuries'

littlewillow87

bouicca21 wrote: »

I get that people think saving £200 a month isn't a lot - but when I had young children things were so tight I couldn't save a penny and I couldn't finance meals out etc either. So I think you are actually doing well. You could do better, but the question is, do you really want to? Life is to be enjoyed.

Thanks, I will look at gas and electricity bill. Yes we're both working full-time, the flat is south-facing so it's very warm without heater, shouldn't cost that much.
Our baby just broke our TV yesterday so I'm thinking about not buying a new one & getting rid of the media package. I hardly ever watch TV, but my husband does.
You're right we're spending a lot on entertainment. We try to do at least 1 nice thing together a week so either a meal out (often cost at least £40 for dinner for 3). If not restaurant it would be cinema. I think we should try to find more free stuff to do e.g. park, museum, go for a walk.
We also enjoy inviting people to our house for meals and ending up spending much more than £70/week on groceries (but it's another way of blessing others so I think it's ok)
Car is also a very big expense.
Yep we're not doing too bad. I had never been worried about finance, only until I had a baby then I realised I should start saving. What I need to do is to find the best balance between lifestyle & saving... :j

littlewillow87

shegirl wrote: »

Tbh I'm not sure how you can say you can't afford luxuries (and even more so then quote how you don't shop at Waitrose?!?!?!)

£195 a month on haircuts,make up,lunch an exercise. Many would consider this a luxury tbh

You give away £150 a month. Nice,good for you, but you think you're struggling and have no luxuries despite having them.

£180 a month on cinema,meals out etc

£130 a month on home improvements and furniture? What are you doing?

£20 per person per week on lunches?!

You save £300 a month for holidays, £100 towards a new car and £200 for emergencies. So in reality you are saving £600 a month.

I think you can very easily make cuts and you certainly aren't without 'luxuries'

What I mean by "can't afford" luxuries is that we never go to posh restaurants or buy high-end products. I always look for sales and reduced stuff, second hand and need to consider a lot before buying things (so it's not like living comfortably in a way that I can buy small items without comparing).

I don't think "giving away" is a luxury. I know many poor people give away but many rich people don't. I thought about cutting back on this to have more spare cash but then I probably would end up spending the money on something else unnecessary so I'd like to keep this (unless our job situation changes).

£195/month on lunches and personal things for 2 = £22/week each . I thought it's normal but if you think it's a lot, I will look at this.

£130 on home improvements: this is also a sort of saving as we put aside £130/month but only do a project or buy new things every few months (we had a flat a year ago so lots of things to do, maybe it won't cost as such in future)

Yes holiday is also a type of saving. Except the budget disappears every year :eek: