Cost of Living Crisis - How are you coping?

Spendless

Have you got debts? How old are the kids? Are you paying for childcare or private schooling as that would take a chunk of your money?

Is it a typo when you've put you and your wife earn £55K each, did you mean between you?  My DH's salary looks good on paper and I'd get similar reactions if I posted it here. He has a company car and  doesn't pay for petrol so these benefits in kind reduce the net pay he receives. We were looking at the HMRC website this weekend and he saw the amount of tax free allowance he gets, forgotten it now but it was either just under or just over £1K and that's better than years ago when all of his salary was taken up and he used to have a negative tax code.  Yes it's handy we don't have to take his petrol or car costs into account but we live on the net income and then support student children from it who receive minimum loans due to salary + car benefits taken into account. People don't always realise when you post a gross  salary that you might have a range of circs affecting  what you receive as net or have to pay out. Do you have anything like that in your lives, paying maintenance to a child from a previous relationship for example? 

Posting an SOA (statement of affairs) on the Debt free wannabe board might help. Posters on there will go through your bills with suggestions on how to cut down. 

Choirgrl

lisyloo said:

Choirgrl said:

I’m pretTy sure that what feels like struggling a little to you can be addressed by really looking critically at what you spend money on and then making some choices about what you want to prioritise. 

I am doing exactly that but mainly for retirement planning pre crisis.

Quantifying I find quite easy.
I simply make some categories e.g. travel, gifts, car costs etc.
And then put everything i spend into one of these categories, if you don't want to do it constantly you can do it monthly.

It is really making me think.

Completely agree. I’ve developed a good discipline around budgeting and tracking expenditure, and it’s been invaluable. I know what I spend for what purpose, and can make choices. It still includes plenty of things that aren't ‘necessary’ - things that make my life easier, things I enjoy, and the odd splurge - but nothing I’d describe as wasteful or thoughtless. It allows me to live comfortably and generously, to save for the future, and to have financial peace of mind. The last of those, in particular, is priceless.

pinkshoes

Deleted_User said:

Sorry of this isn't the right place to ask. 

When I moved into my place 7 years ago, my gas and electric bill was £65 and I actually got some of that back each other. We were out of that house for work most of the time so makes sense. Bring on the children and working from home, that nearly doubled to £120 a month. Now, my deal is set to come to an end in August and I've just been quoted £240!

Used to cost £45 to fill my car and now it's over £70. I used to visit my family once a month but now I've stopped due to petrol considerations.

My wife and I recently got pay raises and earn £55k each. We don't drive a fancy car (same one for 9 years, no debt on it) and the only bill that is not a necessity is the £60 a month we pay for the kids activities. Even our house is a very modest two bed we got for £280,000 years ago. With that said, each month we find ourselves dipping into savings or using the credit card to get by.

I just look at our salary and think if we're struggling a little, how the hell is everyone else coping? Especially those with nursery fees and, relatively, lower income. 

OK, after tax, NI, pension payment and student loan repayment, your take home CASH is £6000!!!!!

If you are struggling, then clearly there is something wrong here!

£240 gas/elec
£60 kids activities
£1200 mortgage (?? This is a complete over estimate)
£600 food
£300 fuel for cars

That comes to £2400, so where is the other £3600 going?!?! 

Either this post is a wind up, or someone in your family is up to something dodgy with the money!!

Pollycat

Deleted_User said:

Sorry of this isn't the right place to ask. 

When I moved into my place 7 years ago, my gas and electric bill was £65 and I actually got some of that back each other. We were out of that house for work most of the time so makes sense. Bring on the children and working from home, that nearly doubled to £120 a month. Now, my deal is set to come to an end in August and I've just been quoted £240!

Used to cost £45 to fill my car and now it's over £70. I used to visit my family once a month but now I've stopped due to petrol considerations.

My wife and I recently got pay raises and earn £55k each. We don't drive a fancy car (same one for 9 years, no debt on it) and the only bill that is not a necessity is the £60 a month we pay for the kids activities. Even our house is a very modest two bed we got for £280,000 years ago. With that said, each month we find ourselves dipping into savings or using the credit card to get by.

I just look at our salary and think if we're struggling a little, how the hell is everyone else coping? Especially those with nursery fees and, relatively, lower income. 

People on a small income have to cope.
They have no choice.
They don't have the luxury of being able to dip into savings or putting stuff on credit cards.
They have to make hard decisions about what is most important to them.

It really does sound like you need a total overhaul of your finances to find out where you are spending what is a considerable amount of money each month.

tooldle

Not necessarily. OP says the house was purchased for 280K, seven years ago and is a 2 bed. It is possible the OP lives in an expensive area. The OP also says they have one car. Perhaps the SE of England. Full time child care for one at 1.5K per month, a couple of season tickets (travel) could be up to 1K a month, out of hours child care for a school age child / nanny adds another 1-1.5K each month, there may be school fees in addition to these costs and then the mortgage on top again. 
I'm aware of colleagues who use private education and a part time nanny as it is cheaper than state school with a full time nanny. All depends on what the person does for a living. 

london21

You need to look at your outgoings to see where your money is going and what you can cut back on.

Everyone is affected one way or the other.

We have cut down on our energy use, switch lights off, heating is off.

Finally went on holiday this year, last holiday was 2019. Prices of flights and hotels also gone up.

Soon will have to look for another role that pays better, my pay has only gone up 7% recently in 5 years.

My thinking is either increase income or cut costs.

RL11

I think the OP is simply wondering how others are coping, if he finds it tight on £110k!
When I used to be on £80k, I found it all went out every month!
Now I'm retired and have no mortgage, no other debt, don't pay into a pension or have any school fees, me and my wife have a reasonable standard of living on £25k per year. Though energy costs alone are going to add an extra £2k to what we need to spend this year

TBagpuss

Deleted_User said:

Sorry of this isn't the right place to ask. 

When I moved into my place 7 years ago, my gas and electric bill was £65 and I actually got some of that back each other. We were out of that house for work most of the time so makes sense. Bring on the children and working from home, that nearly doubled to £120 a month. Now, my deal is set to come to an end in August and I've just been quoted £240!

Used to cost £45 to fill my car and now it's over £70. I used to visit my family once a month but now I've stopped due to petrol considerations.

My wife and I recently got pay raises and earn £55k each. We don't drive a fancy car (same one for 9 years, no debt on it) and the only bill that is not a necessity is the £60 a month we pay for the kids activities. Even our house is a very modest two bed we got for £280,000 years ago. With that said, each month we find ourselves dipping into savings or using the credit card to get by.

I just look at our salary and think if we're struggling a little, how the hell is everyone else coping? Especially those with nursery fees and, relatively, lower income. 

I think, like you, people are cutting non essentials and trying to reduce the essentials, for instance cutting food bills by shopping at a different supermarket and adjusting what is bought etc, and looking at what 'essentials' cnabe reduced . 

Like others, I am very curious about where your money is going - do you have  school fees or very expensive child care?  or are there things like holidays, pensions  etc that you are treating as essentials (which is not unreasonable but may not be sustainable!) 

TBagpuss

To go back to the question of how others on lower incomes are coping, the short answer is that a lot of people are not. 
More people are having to chose between food and energy, are skipping meals for themselves to feed their children, trying to get help from food banks etc.

I think for many people there are non essentials that can be cut relatively easily, savings to be made by being more careful about energy use, thinking about how much you use the car etc, maybe reducing the amounts going towards savings etc, but then eventuially the core things have to be cut, and of course the less you have for discretionary spending in the fist place, the faster you hit that point. 

lisyloo

TBagpuss said:

To go back to the question of how others on lower incomes are coping, the short answer is that a lot of people are not. 
More people are having to chose between food and energy, are skipping meals for themselves to feed their children, trying to get help from food banks etc.

I think for many people there are non essentials that can be cut relatively easily, savings to be made by being more careful about energy use, thinking about how much you use the car etc, maybe reducing the amounts going towards savings etc, but then eventuially the core things have to be cut, and of course the less you have for discretionary spending in the fist place, the faster you hit that point. 

The winter is going to be very worrying.
If it gets cold I'll bring my elderly dad to my house, but of course not everyone has that option.
When I hear the tories arguing about lowering taxes I despair and austerity is the main reason I didn't vote for them.