How does everyone do it? Household Budget Review

Hammerhead17

Hi All,

My husband and I always say 'how does everyone do it' in relation to getting a house and getting on in life etc and we're looking for some outside perspective on our budget to see what's missing.

Monthly income: £3700 + £1800 = £5,500
Monthly outgoings: £5,238

Mortgage 656

Service Charges 83

Water 27

Gas + Electricity 158

Contents Insurance 11.39

Broadband 27

Council tax 180

critical illness 14.8

Life Insurance 23.89

TV Licence 13.37

Social Budget 150

Petrol 250

Food shopping 500

Kids swimming 75

Cleaner 60

Contact lenses 11.49

Netflix 10.99

Prime 7.99

Car 1 Finance 270

Car Service plans 54

Car 2 Finance 224

mobile 1 39

mobile 2  12

Child uni savings 100

Car Insurance 41.66666667

Car Tax 30

Christmas Gifts 50

Birthday Gifts 75

Christmas Food 12.5

House 100

holiday 100

Nursery (already factored in £166 for tax free childcare) 1270

Personal spending money (£300 each for lunches, clothes, gym, personal fun) 600

Based on our income we should be able to afford a bigger mortgage and be able to get a house but it just seems so unachievable especially based on interest rates right now and the market in our area (small 2.5 bed home is about £340k, we'd have about a 60k deposit).

things we considered:

1 car - this would be a struggle as one of us commutes and the drop off time for nursery would mean they would never be able to stay late at work. The carless partner would then be unhappy with their lack of freedom.

Cutting out non-essentials and savings for xmas/birthdays - thing with this is. If we did this to get in a house we'd end up living a miserable life. We enjoy giving all the family little presents (big family so lots of little gifts add up). We'd also be unable to save - there'd need to be contingency for increased household bills as well.

please be kind!

Sarahspangles

How real are these numbers i.e. do you budget in advance each month, record outgoings, and have averaged them out, or are they estimates?

sevenhills

Mobile 1 - £1.39, mobile 2 - £2.12 per month 

That is very good, I buy a £100 phone every couple of years and pay around £10 month.

Lifes_Grand_Plan

sevenhills said:

Mobile 1 - £1.39, mobile 2 - £2.12 per month 

That is very good, I buy a £100 phone every couple of years and pay around £10 month.

I think the OP means Mobile 1 @ £39 per month, and mobile 2 @ £12 per month...

elsien

How many children?

If it was me, I’d lose the cleaner, lose the pay-TV services, cut down on the personal spending money - why do you have both personal spends and a social budget? - as a starting point,

But it’s not me. 

So you need to decide whether or what you are willing to compromise on to move on, or choose  lifestyle over house and carry on as you are
Or increase your earnings. 

There isn’t a magic wand, there’s just what you decide to prioritise. 

powerspowers

I think the biggest impact for you will be when nursery fees are over with. There are bits you can tinker with but it’s not going to make a massive difference quickly and it’s always nice to have a buffer so there are things you can cut if circumstances change.

Is moving urgent or can it wait until kids at school? 

comeandgo

How does everyone do it?  If you really want something you will find ways of doing it.  You are finding excuses not to do it.
  If you prefer to have the things that money can buy, rather than a larger house then that’s fine. 

Spendless

Accept that some things have to wait until later in life. My Nan became a property owner aged 80! 

Nursery fees are taking a large chunk currently.  Once they are over they look at paying the same amount into a savings account. Meanwhile see where else you could make cut-backs. Echoing an earlier comment £600 between you for 'personal spends' is probably on the high side if you wish to achieve other goals. 

Hammerhead17

Thanks for the inputs all. I think we kind of knew what the answers would be but wanted to make sure we hadn't missed anything. 
I am conscious that we could definitely cut back more. I just know how I felt when we were saving up for a deposit and I don't want to give up everything fun. I think the childcare is the biggest difference and until we can change that, we won't be able to increase our mortgage budget enough to move to anywhere that's worth spending the moving costs for.

Longwalker

How do the rest of us do it? Live within our means

Ok I accept you have child care cost but seriously TWO cars on finance? Broadband plus 2 tv pacakages AND TV licence?

If you dont have time to clean, you dont have time to watch tv

Sorry that sounds so harsh, its not. I had a boss who's favourite was - time to lean, time to clean

No kids here anymore thankfully, I do feel for you who do have those costs. However we are on a fixed budget now we are at the end of our earning life

Packed lunches will cut the personal spends down considerably. Also do you really spend £144 on food for a two day holiday?

And gift allowance? Thats really huge, I mean seriously a lot of money. I tell the grandkids at Christmas its Jesus's birthday , not yours and they get what they are given, Saying that Im not tight, the grandkids want for nothing, even today I picked up an outfit for the middle one as it was such a bargain and she will love it

When we first bought back in 96, interest rates were huge, wages weren't great and I do appreciate that house prices were a lot lower, but we still wet ourselves, esp as we bought a doer upper that we had to live in at the same time ( 6 months with no back of house or kitchen soon tightens you ) but you know we never ever really felt we were living a miserable life. We still went to the pub, had weekends away had a car, even managed to buy a brand spank new one after having a mortgage for 3 years  

I swear to god we thought we would be on baked beans and toast for most of the month but we soon learned to cut our cloth and were soon back out having pub nights and days/ weekends away and 2 holidays a year. Not one penny was spent where it didnt need to be, back then it was a tv licence and dial up, a weekend away was a Butlins adult weekend, pubs were Wetherspoons . I cooked every meal a week bar one - still do. Lunches were left overs or made from what was in - still are. And Im a canny shopper, I know the price of everything so to speak. Right now car insurance renew has come in at £120 more then last, Ill not be hitting renew I can assure you, just a quick search has found it £10 less then last year, plus cash back of £45

Saving money but living the life takes time and it does mean making choices. Only you know what choices you are prepared to look at . At the end of the day there is X amount coming in, and with mortgage rates increasing, you at some point are going to have to find that time xx

Bluebell1000

You've got a really good income, and it looks like you are used to spending accordingly. That's fine, of course - the key thing is you spend less than you earn! If you want to do something else with your income though, some of those categories are going to have to shift, so you could maybe sit down and look at your priorities.

As an example, my husband and I have £30 a month each for personal spends. Our entertainment and holiday budget is £120 a month, which also includes Disney plus (no TV licence). Our food budget (not including pet food) is £200 a month for 2 adults 2 children. We have one car, and it's an electric car via salary sacrifice through work, which costs nothing in fuel at the moment with solar panels, and maybe £10 a month in winter. As part of the package all servicing etc is included. We have a Lebara SIM only contract for just under £4 a month each. Gifts are £40 a month for everyone. So yes, your childcare is a lot, but you could shave a bit of various categories if you wanted to.