Help with lack of pension quandary

Waspyyy

barnstar2077 said:

It is great that you want to get your finances back on track, and without much effort you could be laughing!

I would start by writing down every monthly bill that you have.  Adding them up and then subtracting the total from your monthly income will show you what you have to play with.  This will show you if you have too many expensive bills and subscriptions.  If you do, then work your way through every bill one at a time and try to reduce it by shopping around (comparison websites are great for this!) and also knocking on the head things that you don't really get value for money out of.

If on the other hand, once you have added up all of your bills, it looks like you should have thousands of pounds left over then it will show you that you are spending too much on keeping yourself entertained (assuming that you would like to save more.)

Once you have this information the world is your oyster!  As once you know how much money you should have left over at the end of the month you can start to make that money work for you, instead of feeling like all you do is work for money!

I used to spend so much money on toys, games and gadgets that it is embarrassing to me.  What helped me change my ways was realising that the life I was living wasn't actually making me happy and that what I really value in life is my free time, and being able to spend that time with friends and family.

As others have suggested, I would also lean towards a frank conversation with your wife, not just about finances, but about what really makes you both happy and what your long term goals are.  Early retirement, more holidays etc.

Above all, don't beat yourself up about it, plenty of people struggle with their finances, but not many people make an effort to sort it out, so you are already a step up on many others!

Thanks, have already done this sort of exercise, don't really spend too much on trinkets and entertainment atm and I've already cancelled newspapers, books, streaming services etc. sure I could cut back some more but you would get to a point where it's just existing...not after that if I can help it

Waspyyy

Auti said:

Just an idea but why not have a separate bank account that you both put money in to cover bills including childcare plus 10% to cover unexpected. So basically you sit down together, add up all the household bills and childcare plus transport to work, then add 10% and then divide in 2 to get each share. That amount goes in the new, joint, bank account for necessary life living bills. 

It is a start and whilst not perfect might take some pressure off. Children living as part of a partnership (whether biological or not) are looked after by both so costs bourne by both - just my opinion 

Already have this, we both pay in £900, pays all the bills but always runs out near end of month so need to look at food spend...

Auti

Not only food spend but also how much gets thrown away/ is duplicated unnecessarily. There was a program a while back about food shopping and saving money and one couple with children were wasting over £12000 per year on stuff that was thrown away as past sell by or just not eaten. Also watch take aways - nice and simple but cost a fortune and a real eye opener  

Langerhan

Getting the spending under control, which you mentioned in your first post, sounds like a really good plan and will help a lot with everything else.

Without knowing the rate on your £30k debt it's hard to do the sums, but it's very likely that saving into your workplace pension will be the winner here since there's an employer contribution and you'll be paying less tax. 

enthusiasticsaver

If you earn £70k and your employer contributes to your workplace pension (assuming you restart your contributions) then you are turning down free money from HMRC and your employer. At 42 with almost zero pension I would make that a priority. You and your wife need to get on the same page re the debt. Not talking about it is crazy when you are already linked via marriage and children. 

theoretica

'Bad with money' so often means simply doesn't bother thinking about it.  How often do you sit down and actually do calculations relating to your money?  Any sort of calculations?  If you actually gave it 15 minutes a week, this could really change things for you.

Where is your money actually going - do you know?  How much of that spending is unavoidable, how much is good value, how much do you not really remember a month later?  What big expenses do you have coming up - anyone getting married, holiday plans, how old is your car?  What is your plan for when the boiler dies?

You are 42 - so say you will work for 25 more years and be retired for 25 years, how do you want to spread out spending your money over those 50 years?  Looks to me pretty close to one year of earning and one year of state pension needing to pay for two years of living.  Personally I really would not want to live on the full 70k now and then need to survive on only state pension in retirement.

kimwp

Waspyyy said:

Auti said:

Just an idea but why not have a separate bank account that you both put money in to cover bills including childcare plus 10% to cover unexpected. So basically you sit down together, add up all the household bills and childcare plus transport to work, then add 10% and then divide in 2 to get each share. That amount goes in the new, joint, bank account for necessary life living bills. 

It is a start and whilst not perfect might take some pressure off. Children living as part of a partnership (whether biological or not) are looked after by both so costs bourne by both - just my opinion 

Already have this, we both pay in £900, pays all the bills but always runs out near end of month so need to look at food spend...

With £70k salary, your take-home pay could be (IE no pension contributions/charitable donations etc) £4k a month. Do you know where this additional £3k a month is going?

GunJack

kimwp said:

Waspyyy said:

Auti said:

Just an idea but why not have a separate bank account that you both put money in to cover bills including childcare plus 10% to cover unexpected. So basically you sit down together, add up all the household bills and childcare plus transport to work, then add 10% and then divide in 2 to get each share. That amount goes in the new, joint, bank account for necessary life living bills. 

It is a start and whilst not perfect might take some pressure off. Children living as part of a partnership (whether biological or not) are looked after by both so costs bourne by both - just my opinion 

Already have this, we both pay in £900, pays all the bills but always runs out near end of month so need to look at food spend...

With £70k salary, your take-home pay could be (IE no pension contributions/charitable donations etc) £4k a month. Do you know where this additional £3k a month is going?

This, in a nutshell...and this is just on your salary, never mind the £100k of you wife's.

You talk about £900 each into a joint account but it runs out - so up it a bit!!

You talk about looking at your streaming services, etc. but (and I don't want to sound harsh about this) that's just tinkering around the edges. You appear to be spending a stupid amount a month on...what, exactly? As others have mentioned you need to take a long hard look at your spending , both individually and joint - you are a family unit, not just a couple of individuals who share a house. If you (both) insist on not looking at things as a family you might as well just be housemates who just happen to have kids with each other  rather than other people.

I get you don't want to end up existing rather than living, totally, but in order to live you may need to exist for a year or two to sort yourself/selves out, clear the debt and get pension and cash saving!!

sheramber

What if you can’t work until you are 70?

What happens if you live to 90?

You need to look at why  you are spending more than you earn. 

you need to write down what you spend on each month and how much.
Then look at what you can shave down or off that list. 

Unless you are disciplined about spending, that £400 you spend on nursery will be spent on something else, just because you can.

BlackKnightMonty

You are in a great position to turn the tide and boost your retirement pot.

It is difficult; and the financial pressures today are much harder than they were.

25 years of compound interest could be a real game changer.