True cost of living- how do others manage?

lifebegins

I'm not sure if this is the right place- our monthly costs have been going up and up and we've realised that we've been spending more than we earn each month masked by the use of credit cards and an overdraft. We are lucky and earn a good income but still seem to have basically nothing left once monthly bills are accounted for and we've paid the minimum on the credit cards.

I've gone through everything on our bills and changed the gas/ electricity, changed contract phone, checked mortgage is good deal (it is) , reduced grocery costs budgeted (will be a challenge) so have shaved off a couple of hundred off our outgoings but I just don't see how everyone manages hobbies/ holidays/ replacement cars (not new) etc. . We've missed taking my 6 year old car to the garage fir a service (would have been £400 at the main dealers).
We pay a big chunk to our older 2 children who are at uni as they get a minimum maintenance loan each which doesn't even cover their rent. Its trying to get them to budget which prompted me to look at our own again.
As soon as they turned 18 the credit card offers started dropping through the letterbox for them- banks are the lowest of the low they try and snare teenagers and keep them in their grip for life- snake oil salesmen (I digress!)

I hope that going through everything would mean we were in a better position but at the moment it just seems that it's highlighted the fact we have nothing left to really get rid of the credit card balance or for fun which is a bit disheartening!

What am I missing? How does everyone else do it?
Will post SOA in a moment.

lifebegins

I can't find the SOA template- does anyone have a link please?

tallyhoh

http://www.stoozing.com/calculator/soa.php

Teacher2

You will find a big difference when your children leave university and get jobs. Ours got the full £3000 a year loan for fees plus another four grand for living expenses and we still had to pay their accommodation which was £5000 a year each. One of them delayed applying for a year so for two years we had to pay these costs for both of them. Ouch!

Things got better financially pretty quickly when they graduated.

On the subject of garage servicing main garage tariffs are priced with the fact that many cars are fleet cars with contracts and many new cars are bought on car purchase plans with the servicing included. Thus the service costs are somewhat fictional and you can negotiate on them.

£400 is wildly expensive. We pay less because we told the Ford dealership we pay the costs ourselves and can't afford what they were charging. On the basis that we have both of our cars serviced with them plus our son's and because we have bought cars with them they don't fleece us because they want repeat business.

I sympathise with the 'nothing left at the end of the month' syndrome.

We never eat outside the house except for very special and rare occasions and we also gave up takeaways years ago. My DH and I do not buy each other Christmas presents and I have virtually given up buying clothes. We never, ever buy anything unless it is in a sale or reduced in price. I spend a lot of time researching prices and have 'price alerts' on goods sent from shopbots like 'mysupermarket' and 'camelcamel'. If something comes down to a stupid price on non perishables like cleaning or bathroom products I bulk buy. I also use Poundland and other discount outlets for essentials. I avoid leisure shopping and shop for food from a list for a pre-planned weekly menu. It's boring and repetitive but certainly saves money. Our activities for pleasure are mostly free like reading, walking, visiting National Trust properties (on an annual subscription) and free galleries and museums and so on. I do all of my own decorating, cleaning and house and garden maintenance which saves a fortune and gives me plenty of exercise.

I had to retire early through stress and thereby lost a quarter of my pension and I have used my free time to retrench and research how to live more cheaply. I am not saying I 'live high' but my DH and I are generally pretty happy with life.

Good luck with your maney-saving efforts.

ReadingTim

lifebegins wrote: »

our monthly costs have been going up and up and we've realised that we've been spending more than we earn each month masked by the use of credit cards and an overdraft. We are lucky and earn a good income but still seem to have basically nothing left once monthly bills are accounted for and we've paid the minimum on the credit cards.

Sounds like you've had your light bulb moment (ie you're spending more than you earn), and have also realised that the problem's been going on for a while: like you it only hits many when they struggle to make the monthly minimum repayments, or can't get another 0% balance transfer deal.

lifebegins wrote: »

What am I missing? Have does everyone else do it?

Nothing - you've grasped the basic problem that more's going out than is coming in, so you need to reduce what goes out, and increase what comes in. An SoA will identify what cuts can be made in the spending (mobile phones and sky TV are always good places to start...) and investigate 0% balance transfer deals to reduce the interest component of the repayments and attack the capital/principal element. Increasing what comes in can include getting a job, getting a 2nd job, getting a better paid job etc.

Sort that, and the rest it just a matter of time. Unfortunately however, it took you some time to get into this position, and it'll take longer to get out of it. Good luck!

PasturesNew

The cost of living depends on choices. Sometimes choices made because you know no different/have always done that; sometimes choices made because you never micromanaged the money.

e.g. take your 6 year old car and skipping a service as it costs £400. In the past you've made a choice to have a newer car that's more expensive to run and so that might now be something that's hindering you. Others might, say, have a 12 year old car and a service bill of £100. Now, you're not going to get rid of the car, but next time you think "we should change the car" ... think more carefully about the Total Cost of Ownership and whether your choice of car is driven by "looking well to do", or "getting from A to B cheapest".

You can budget for food.... but a baked potato for 20p is food ... serving salmon in an organic free range egg sauce on top, adding (say) £1 to the cost is NOT budgetting...

You have to list what you're doing and then compare your costs against, say, somebody who lives on the dole, or somebody on a NMW job - how'd their life be different to yours? By comparing how they'd live and how you do you might be able to spot something to do differently. e.g. leaving it another 2 years before changing your car, or opting for cheddar on a spud instead of organic salmon etc.

lifebegins

Finally managed to do the SOA:

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 4342 (OH and me combined)
Partners monthly income after tax....... 0
Benefits................................ 82
Other income............................ 0
Total monthly income.................... 4424

Monthly Expense Details
Mortgage................................ 947
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 208
Electricity............................. 72 (cheapest deal)
Gas..................................... 75 (cheapest deal)
Oil..................................... 0
Water rates............................. 28
Telephone (land line)................... 0 (included in internet- includes all calls except premium/ mobiles)
Mobile phone............................ 30 (just left expensive contract- now 3 x SIM only)
TV Licence.............................. 12.12
Satellite/Cable TV...................... 7.49
Internet Services....................... 32.49
Groceries etc. ......................... 300 (ambitious- usually much more than this)
Clothing................................ 80 (guesstimate for this year- 1 child still growing!)
Petrol/diesel........................... 440 (both have longish commutes and smallish cars and 2 kids to ferry to / from distant unis every term) so hard to see how to reduce this)
Road tax................................ 260 EDIT- should be 21.67 monthly
Car Insurance........................... 71 (highish as includes kids)
Car maintenance (including MOT)......... 140 (ambitious- has been more than this in past)
Car parking............................. 0
Other travel............................ 15
Childcare/nursery....................... 0
Other child related expenses............ 750 (uni costs x 2)
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 35 (includes food)
Buildings insurance..................... 37
Contents insurance...................... 0
Life assurance ......................... 45
Other insurance......................... 0
Presents (birthday, christmas etc)...... 125 (approx. £100 per birthday and £200 at Xmas per child)
Haircuts................................ 50 (for 3 -4 of us)
Entertainment........................... 70
Holiday................................. 150 (modest hol for for 5 of us- much less than in past!)
Emergency fund.......................... 80 (old house- things always needing repair)
Child's hobby........................... 52
Total monthly expenses.................. 4142.1



Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 189000...(947)......3.5
Total secured & HP debts...... 189000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit card 1..................5500......55........0
Credit card 2..................7600......89.41.....0
Credit card 3..................3250......32.5......0
Total unsecured debts..........16350.....176.91....-


Monthly Budget Summary
Total monthly income.................... 4,424
Expenses (including HP & secured debts). 4,142.1
Available for debt repayments........... 281.9
Monthly UNsecured debt repayments....... 176.91
Amount left after debt repayments....... 104.99 EDIT

***should be 343.32 due to car tax mistake*** - sounds a lot better in theory, but still 0 in reality so need to find where it's gone

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

But it really doesn't seem as though we have anything left each month at the moment so keeping a track of every pound this month to see where the "surplus" goes.

lifebegins

Teacher2 wrote: »

You will find a big difference when your children leave university and get jobs. Ours got the full £3000 a year loan for fees plus another four grand for living expenses and we still had to pay their accommodation which was £5000 a year each. One of them delayed applying for a year so for two years we had to pay these costs for both of them. Ouch!

Things got better financially pretty quickly when they graduated.

On the subject of garage servicing main garage tariffs are priced with the fact that many cars are fleet cars with contracts and many new cars are bought on car purchase plans with the servicing included. Thus the service costs are somewhat fictional and you can negotiate on them.

£400 is wildly expensive. We pay less because we told the Ford dealership we pay the costs ourselves and can't afford what they were charging. On the basis that we have both of our cars serviced with them plus our son's and because we have bought cars with them they don't fleece us because they want repeat business.

I sympathise with the 'nothing left at the end of the month' syndrome.

We never eat outside the house except for very special and rare occasions and we also gave up takeaways years ago. My DH and I do not buy each other Christmas presents and I have virtually given up buying clothes. We never, ever buy anything unless it is in a sale or reduced in price. I spend a lot of time researching prices and have 'price alerts' on goods sent from shopbots like 'mysupermarket' and 'camelcamel'. If something comes down to a stupid price on non perishables like cleaning or bathroom products I bulk buy. I also use Poundland and other discount outlets for essentials. I avoid leisure shopping and shop for food from a list for a pre-planned weekly menu. It's boring and repetitive but certainly saves money. Our activities for pleasure are mostly free like reading, walking, visiting National Trust properties (on an annual subscription) and free galleries and museums and so on. I do all of my own decorating, cleaning and house and garden maintenance which saves a fortune and gives me plenty of exercise.

I had to retire early through stress and thereby lost a quarter of my pension and I have used my free time to retrench and research how to live more cheaply. I am not saying I 'live high' but my DH and I are generally pretty happy with life.

Good luck with your maney-saving efforts.

Thanks- you've really useful tips- I didn't know that servicing at main dealers could be negotiable. I'll join the price alert sites as I've not tried them before, although I've saved a lot making lists and shopping at Lidl/ Aldi. Our eldest won't graduate from uni for another 3 years and the youngest for another decade :eek: so we need to find a way to still live though it's nice to think how much better off we'll be once they graduate. And maybe the youngest won't want to go

MrsTinks

lifebegins wrote: »

Finally managed to do the SOA:

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 3
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 4342 (OH and me combined)
Partners monthly income after tax....... 0
Benefits................................ 82
Other income............................ 0
Total monthly income.................... 4424

Monthly Expense Details
Mortgage................................ 947
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 208
Electricity............................. 72 (cheapest deal) - Switch stuff off - with 2 at uni most of the time this is high!
Gas..................................... 75 (cheapest deal) Turn the thermostat down a couple of degrees and same on the hot water tank.
Oil..................................... 0
Water rates............................. 28
Telephone (land line)................... 0 (included in internet- includes all calls except premium/ mobiles)
Mobile phone............................ 30 (just left expensive contract- now 3 x SIM only)
TV Licence.............................. 12.12
Satellite/Cable TV...................... 7.49
Internet Services....................... 32.49
Groceries etc. ......................... 300 (ambitious- usually much more than this)
Clothing................................ 80 (guesstimate for this year- 1 child still growing!)
Petrol/diesel........................... 440 (both have longish commutes and smallish cars and 2 kids to ferry to / from distant unis every term) so hard to see how to reduce this) See if the kids can get cheap bus tickets - quite often some good deals about!
Road tax................................ 260 This is probably per year? Which means your surplus should be even bigger...
Car Insurance........................... 71 (highish as includes kids) See if it's cheaper to insure on one of them on each car? DO they really NEED to be insured on your cars??
Car maintenance (including MOT)......... 140 (ambitious- has been more than this in past)
Car parking............................. 0
Other travel............................ 15
Childcare/nursery....................... 0
Other child related expenses............ 750 (uni costs x 2)Seriously??? Sorry but wow. I am going to assume you have found the cheapest place to live you could and they are on a survival budget - tell them to get part time and holiday jobs to help subsidize their uni time
Medical (prescriptions, dentist etc).... 30
Pet insurance/vet bills................. 35 (includes food)
Buildings insurance..................... 37 does this include contents?
Contents insurance...................... 0
Life assurance ......................... 45
Other insurance......................... 0
Presents (birthday, christmas etc)...... 125 (approx. £100 per birthday and £200 at Xmas per child) You gift each of your older ones £375 each month - cut back on this.
Haircuts................................ 50 (for 3 -4 of us)
Entertainment........................... 70
Holiday................................. 150 (modest hol for for 5 of us- much less than in past!)
Emergency fund.......................... 80 (old house- things always needing repair)
Child's hobby........................... 52
Total monthly expenses.................. 4142.1



Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 189000...(947)......3.5
Total secured & HP debts...... 189000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit card 1..................5500......55........0
Credit card 2..................7600......89.41.....0
Credit card 3..................3250......32.5......0
Total unsecured debts..........16350.....176.91....-


Monthly Budget Summary
Total monthly income.................... 4,424
Expenses (including HP & secured debts). 4,142.1
Available for debt repayments........... 281.9
Monthly UNsecured debt repayments....... 176.91
Amount left after debt repayments....... 104.99

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

But it really doesn't seem as though we have anything left each month at the moment so keeping a track of every pound this month to see where the "surplus" goes.

Clearly there is something missing because not only should you have a bigger surplus given your car tax is down as a monthly payment for the annual amount, but you're getting deeper and deeper in debt.

You need to work out there exactly this is going wrong. And you need to find a way to not subsidize your grown kids as much in my view... Sorry but the harsh truth is that they're grown up now. They can get part time jobs and holiday jobs to help pay the bills for the rest of the year.

Indout96

The problem is that you are struggling because you are paying £750 a month to your kids to go to uni.
Can they not get part time jobs ?
I cant see much else you can cut back on (knocking them off the car insurance ??)
The Car maintenance looks expensive - almost £1,700 for car repairs each year. Why on earth are you taking a 6 year old car to a main dealer.

lifebegins

PasturesNew wrote: »

The cost of living depends on choices. Sometimes choices made because you know no different/have always done that; sometimes choices made because you never micromanaged the money.

e.g. take your 6 year old car and skipping a service as it costs £400. In the past you've made a choice to have a newer car that's more expensive to run and so that might now be something that's hindering you. Others might, say, have a 12 year old car and a service bill of £100. Now, you're not going to get rid of the car, but next time you think "we should change the car" ... think more carefully about the Total Cost of Ownership and whether your choice of car is driven by "looking well to do", or "getting from A to B cheapest".

You can budget for food.... but a baked potato for 20p is food ... serving salmon in an organic free range egg sauce on top, adding (say) £1 to the cost is NOT budgetting...

You have to list what you're doing and then compare your costs against, say, somebody who lives on the dole, or somebody on a NMW job - how'd their life be different to yours? By comparing how they'd live and how you do you might be able to spot something to do differently. e.g. leaving it another 2 years before changing your car, or opting for cheddar on a spud instead of organic salmon etc.

I know what you mean, but please don't think we have flash cars and eat organic salmon- we don't! My OH did change his car last year but that's because his previous one was becoming so expensive in repairs (it was 12 years old and had done nearly 200K miles).

That's why I wonder how others manage- it really hasn't felt like we've been living the high life but we have exceeded our income. You're right about micromanaging the money- that's what I've been doing for a month now and will continue.