One income family of four - can we get ahead even after pay cuts?

Bluegreen143

Hoping I can keep up with a diary this time 🙂 will subscribe to some others too as I find them so inspiring.

I’m an at home mum of two small kids (my 4.5yo son Monkey and 18mo daughter Bambi) and we live with my husband Red who works a skilled manual job - he’s currently furloughed on the 80% pay but due to return to work soon.

I should say upfront we don’t have much debt - currently £150 on one credit card and £1,250 we owe MIL. We had been using the CC through lockdown but our holiday refund came in on it and paid most of the debt off... of course that money was meant to be saved so we don’t have much in the way of savings. I’ll check exact figures but maybe £600 which I have aside for Christmas (but it’s also our emergency fund).

Red has been told they will all be working on a paycut for the next four months, gradually working back up from the 80% pay to 100% again. We just feel lucky he has a job at the moment! We are on the mortgage holiday but from Aug 1 we need to start paying it again.

The problem is we never seem to get ahead even when on full pay and we have owed MIL her money for years so I’m really keen to pay it back. Each month I’m full of optimism that we will start to save properly but we invariably lose track of our budget and end up just scraping by.

I’m quite old style in my interests (love that forum board) and love cooking/baking from scratch, growing veg in the garden, we have chickens, I like to do simple stuff with the kids like homemade playdough and getting outdoors. We were spending a reasonable amount of money on kids’ activities like softplay etc before but obviously not now. We haven’t actually missed anything like that too much so I think we will make some changes for a slower, more thrifty life - at least that’s what I intend!

I would say we both have our weaknesses money-wise. Red has quite a high spending allowance for our income which he tends to blow on beer, vaping supplies and junk food (he’s an utter gem in other ways, this is not about bashing him). He’s very into DIY and woodworking which saves us a fortune v paying people to do projects - but costs us when compared to not doing the project... he likes to keep busy and once he thinks of a project wants to do it ASAP. He is quite generous and tends to overspend on gifts or if we had a party say, he wouldn’t be happy to be too cheap.

As for me, I tend to buy far too much for the kids and not working does mean we are usually spending on doing things through the week. I have a weakness for books, especially buying kindle books on impulse, and buying resources etc from blogs especially on parenting. Definitely an area I need to reign back in. At the moment I’ve chosen to use a weekly fruit/veg box and glass bottle milk deliveries which we love but are expensive so it’s important to note that not all of the food overspend is Red’s fault!

I’ll come on later and do a full look at all our figures 😊 need to go and take the kids for a walk now as we seem to have a break in the rain.

MagicCat

Hi bluegreen, I had to comment as we're in such similar circumstances I want to keep following your diary. I also have a 4 1/2 year old boy and an 18 month old girl and I totally get the buying parenting blog resources I keep telling myself they're quite cheap as a lot are American and priced in dollars but the exchange rate is so rubbish they aren't really!
I was aiming for 2020 being the year to get our finances in order but lockdown has really thrown everything - I'm hoping to get some inspiration from diaries here.
Good luck with everything, looking forward to reading about your journey 

Bluegreen143

@MagicCat Thanks so much for your comment. It’s nice to hear I’m not alone! I too have had that inner conversation about American resources and the exchange rate on the dollar 😅

Just had a quick look at our current state of play. Red gets paid a week today and we will get the child benefit money the day before. 

My account (our main account) - £207 - a lot of this will go on this week’s food & groceries - any extra I will transfer to the credit card on payday as all this month’s bills have been paid

Red’s account (Just his personal spends) - I think about £1 😂 will check his phone bill has come out or otherwise I’ll need to transfer him money to cover it 

Savings accounts:
Christmas & gifts £400
Emergencies £94
Clothes £20
Annual bills £5

 Debt:
CC 1 £50 credit due to a refund
CC 2 £210
MIL £1,250

Moneywhizz

If you are brave enough to post an SOA it will help us to see if there is any advice/areas for cutting back. It does sound as if you know where your problem areas lie and there is potential to make some fairly easy savings. Maybe you can cut your husband's allowance for personal spends a bit without it causing him too many problems. If you can give yourself a certain amount for spending and when it is finished it cant be replaced till next payday, you might find that it curtails your spending quite a bit. Keep posting. 

redofromstart

Hi Bluegreen, just called into say happy new diary and good luck with your journey.  

Mumoffourkids

Just posting to say I’ve subscribed! Good luck on your journey x

enthusiasticsaver

Do you do a budget at the start of the month?  I would be inclined to start making a regular payment to your MIL as if you wait until you have spare money it will never happen especially if you only have one income. Also giving your OH a set budget to work in may work in making him not overspend.  Using credit cards when you have a low income is a recipe for disaster so I would move away from using them altogether until you can go back to work and your family income increases. 

Bluegreen143

I’m going to start this with a disclaimer. I never find the standard SOA easy to fill in as it doesn’t fit how I categorise expense in my own budgeting. And I find it hard to read when you have lots of 0s because the categories don’t apply. So I’ve amended it all to suit me. Happy to clarify anything if anyone is reading it and thinks I’ve missed something out. Also this is in “normal life” as we aren’t spending much on going out or petrol in lockdown, but things are starting to ease now. We won’t have the mortgage this month as are in the mortgage holiday, but also the income is going to be the lower number. 

Statement of Affairs and Personal Balance Sheet

Household Information

Number of adults in household........... 2

Number of children in household........ 2

Number of cars owned.................... 1

Monthly Income Details

Partners monthly income after tax. £1,600-2,050 lower amount is his furlough income, higher is usual as he has some overtime each month usually too. It won’t be back to normal til November at the earliest though.

Benefits.......................£134 (child benefit)

Total monthly income........£1,734-2,184

Monthly Expense Details

BILLS

ESSENTIAL 

Mortgage.....................................£425

Council tax (inc water).....................£155

Electricity & gas............................. £105

Home ins*................................£12

Life & illness ins...........................£49 but I’ve discovered an old policy for £15 on top of this I forgot to cancel so I’ll sort that this week

Car ins*....................……................£35

Road tax*.......................................£12

MOT/car servicing*.........................£15-25

Boiler service*..................................£8

Breakdown cover*............................£8

Internet..................£23 (I’m going to say in our current world this is an essential for us)

NON ESSENTIAL BILLS/CONTRACTS

TV license................................£13

Amazon Prime*......................£8

Disney+*...........................£5

Mobile phones.............................£78 two smartphones, both in contract - we use these instead of having a laptop/tablet 

Spotify......................................£10 we do use this every day as don’t have CDs

*annual bill so have averaged the monthly cost 

Bills total................... £971

DISCRETIONARY

Food...............very roughly £400 

not including alcohol which comes from our personal budgets

Other groceries/household........£50-60

Petrol & parking..................£50-70 

usual amount, obviously less currently as still in semi lockdown 

Fun...............................£80-100 

(takeaways, taking the kids out/family day trips pre lockdown, since lockdown I’ve been buying them books etc on amazon out of this)

My spending.............................£50 

Red’s spending.........................£250-300 

this is a black hole. It’s actually hard to tell what he spends on himself as he also orders supplies for the house, tools etc and forgets to separate out his spending.

DIY/home projects & gardening....£30-100 

varies a lot, we have been doing a lot while Red has been furloughed

Holiday....................£0-100

aim is to save at least £100 a month for this - isn’t regularly happening - we haven’t been abroad together since we had the kids and our planned holiday in May got cancelled. We usually go away a long weekend in Scotland most years but not sure if that will happen now 

Clothes...................................£25-30 

maybe? Twice a year I’ll do a bigger kids clothes shop as they outgrow stuff, we only very occasionally order basics for ourselves or sometimes get vouchers for birthdays - Red wears uniform to work

Christmas/birthdays.........£100 

I aim to put this into the account, bit behind now this year. Tbh this isn’t actually enough when you add in all the birthdays, weddings, new baby gifts etc 

Emergency fund................£0

would like to put something away each month but it rarely happens! When I get a spare £10 I chuck it in here

Total estimated discretionary £1,000-£1,250

Total expenses.................. £2,000-£2,250

I know this is a big range. I don’t want to just make figures up & they do vary monthly. We aren’t getting into tons of debt every month over time so I think I’ve been pretty accurate in my spending estimates and it’s pretty close to what we earn. Looking at the figures I can see why I never have anything to put in savings or pay off MIL though. If we get more money in one month due to overtime etc we just spend more on DIY or are less careful with the food budget so it all just goes. Then because there is never much in the emergency savings then when the washing machine goes or whatever we always need to make that up from somewhere and it causes a lot of stress.

I haven’t filled in the bottom section fully - the only asset is our home (£170k value, £112k still owed), the mortgage we very recently remortgaged to a 5 year fix. Car is 10 years old with no finance on it. It is possible we will need to replace this in the next year depending how it fares on its MOT. Red drives a van for work provided by the employer.

We owe:

MIL £1,250 - no interest or set repayment date. This was from buying our house years ago, it was £5k but we’ve paid most of it off

CC £220 - could possibly pay this off in one go once the child benefit comes in...

I’ll be back posting on here with thoughts for improvements once I’ve had a good chat with Red... he pays lip service to being better with money but he is a bit resistant to change.

Mumoffourkids

One thing is your groceries bill can be cut. I have six kids and up until recently had two in nappies. My food budget each week is £100 and that includes toiletries, cleaning stuff, pet food for one dog, everything. So I am sure you can cut yours if there are only 4 of you in your house. Also presents is too high really. Again with six kids and their birthdays and Christmas I put away £150 per month. They normally get £100 spent on them on their birthdays and £150 at Christmas. If it’s a big birthday like an 18th then I save up beforehand any extra that I want to spend. 

Also I would say that £15 - £25 a month for car maintenance probably isn’t enough for a ten year old car. My car is ten years old and last year I spent nearly £1000 getting it through its mot. However it had done a lot of miles and it was tyres, brakes and other bits that needed doing. I had this money saved and I knew the car would then last me a lot longer. Since then the car hasn’t done hardly as many miles so I am expecting this year’s mot to be much cheaper, although I still have a large amount saved in my car maintenance fund just in case, because for some reason cars don’t seem to like me and go wrong a lot!

Bluegreen143

Thanks for the thoughts! 

Yes I totally agree re groceries, I used to be very good at this but it’s spiralled out of control. I’m doing the grocery challenge on Old Style again from July onwards. It’s £25 a week for our fruit/veg boxes from our local greengrocers and £10 a week for glass bottle milk deliveries. These have been a godsend in lockdown tbh as we have almost totally avoided supermarket trips but going forward we might need to look at cancelling the milk as it is double the cost of supermarket milk. It’s a shame though as I like supporting the local business/using less plastic. I can drop a couple of the extras in our greengrocer box to reduce the cost a bit potentially as our garden is beginning to produce now but not keen to cancel that totally. We do cook most things from scratch eg tonight had sourdough pittas with beetroot falafel and hummus, all homemade. We probably aren’t great at having very cheap meals, Red buys junk too, and we are eating less vegetarian food than we used to. I used to cloth nappy but have switched to disposable as I was getting stressed keeping on top of the washing, I could go back to cloth maybe though.

Re the car, that’s actually what it cost last year - sailed through the MOT with one minor issue and only needed a couple of new tires later on. But you’re right I can’t depend on that always happening! 

Just tried to cancel the Amazon Prime - thought I could as it just renewed last week. But I can only cancel from next June and as it’s all paid for I guess we will keep using it! But I don’t think we will renew next year so I’m not going to budget for doing so. We use a friend’s Netflix log in (and they use our Disney+ one in return) and we use that much more. Having the prime delivery only encourages us to order things we can’t afford too.

Also remembered I have an Audible account £7.99 a month - I’ve been using this to order audiobooks mainly for my 4.5yo who has just discovered them but I’ll cancel it for now as it’s definitely a luxury.

Bluegreen143

Popping on to say the Audible account is cancelled. I had to use my credits first or lose them so my son has plenty of listening to do a while now (plus kids like the same stuff on repeat anyway). I do read to him myself a lot every day as well I feel I need to add! It’s just nice as he will happily curl up under a blanket and listen to an audiobook for half an hour quiet time during the little one’s nap so I can get on with stuff.