London on £40,000

[creampuff]

Need some help with this one. I work in an engineering office job in oil and gas. Prior to 2014 when the oil price was high, it paid really well. I had to eat about a 50% pay cut with the collapse of the oil price, but even now, it still pays pretty well, just not ridiculously well.

Mrs Puff and I have two kids. She doesn't work as the kids are young. So on one income.

Last 4 years, we have cut back on expenses but not by enough and have still been slowly depleting our savings. Reckoning day has arrived and we now need to spend no more than I earn. I've figured out our daily free cash and come up with a very modest amount of discretionary spending.

Just to be clear, I'm currently on about double the £40,000 in the post title. But Mrs Puff has asked "how do people on £30, £40 or even £50k in London do anything?"

So that's the question for anyone in the situation.... if you are on a single income of £40,000 before tax in London, have a mortgage, have kids..... what is your budget to make ends meet?

[mike9009]

I cannot directly answer your question as I have no personal experience of living and working in London.

My wife gave up work whilst the kids were young and now they are both at school (currently 5 and 9 years old) she went back to work part time. This helped 'ease' our finances after about five years on one income. She also set up a small business which brought her pocket money in too - she still runs the business whilst at work part time. (The business was a hobby so she enjoys doing it anyway, which helps)


The other alternative is to move out of London - I have quite a few friends who lived in London, then had kids and moved back 'home'. My BIL moved with my sister back to the Peak District (was in Enfield) and can work from home, but still goes to the office in London for a few days a month - dossing on mates floors etc. This gives obvious benefits but having the grandparents around to help with childcare also helps massively. (We don't have this benefit so childcare is still another expense).

Kids are expensive! London is expensive.

HTH


Mike



Mike

[Shnozz]

When you read of average salaries and see job sites supporting these figures, you wonder how the UK population sustain a life of expensive property values, roads full of new german marque cars, busy restaurants and bars charging strong money for food and booze, high streets packed with designer stores that rarely seem unoccupied etc etc. Then you read that consumer debt and mortgage debt are at all time highs.

Income versus expenditure certainly does not seem to match on face value.

In short, the debt bubble seems to grow ever bigger.

[valiant]

Apart from Property,London can be as cheap or as expensive as you want it to be.

Until recently I lived in London my whole life and was on a very modest salary to begin with. Managed to buy a small house and simply stayed there as there wasn’t really any reason to move as I only had the one kid.

I couldn’t afford to buy in the borough I’d been brought up in so we chose a cheaper borough nearby but even now it’s bonkers price as the area became gentrified and the hipsters moved in.

There was a program on tv a while ago where a group of millennials were moaning about not being able to get on the property ladder. Where were they looking? Notting Hill ffs! Wanted a champagne lifestyle but only had a lemonade budget. London is much more than zone 1-2.

Plenty of state schools that score good results and are not too stabby. Excellent public transport which isn’t too expensive and gives you the option of foregoing a car (not very ph, I know!) and there’s plenty of decently priced restaurants and entertainment if you know where to look.

For most of my twenties and early thirties I earned less than £40k and had a decent life but then I bought my house when it was affordable so this does skewer my results a bit.

[cossy400]

Move out of London, and have a read through the thread in Finance on "cheap people"

I live in the Derbyshire, Mrs400s family live in Sawbridgeworth, near Harlow.

If we sold up and moved down there to be closer we d be in one bedroom flat.

(mortgage free, buts that's what we are now)

But that's the joy of living near the capital I suppose, think the train in is around 30 mins? I might be wrong.

Ill stick with my village life and less traffic.

[vixen1700]

Used to love the Straw Hat in Sawbridgeworth before it turned into a Chinese reastaurant.

The pheasant had me so stuffed I felt as though I wouldn't be able to drive home.

[romeogolf]

We have an income approximately the same as yours. Mortgage, no kids, and live in Dorset... But we wonder how anyone raises a family even on this income, nevermind anything lower!

[Esotericstuff]

Both partners work, live in a cheaper area in a less desirable property. Have a modest life without frivolous expenses.

My cleaner manages it and brings up two kids, quite happily.

That said, the secret to a good life in London seems to be, earn a st tonne of money.

[ruggedscotty]

London ! Why ? What is it with the fascination of living in London ?

Any time Ive been all ive seen is a city that is full of depressed souls working every hour and struggling to have any decent life while telling everyone that they live in London.....


A life obsessed with square meterage and the cost of a parking permit....


jesus wept rivers of tears... this isn't life this is purgatory. Wake up and take stock, what is it that fascinates about the London experience what makes it so special ?

Move to the sticks relax and live within your means,

[Fermit and Sexy Sarah]

My older brother lives in Ealing. As the senior BBC iplayer engineer he doesn't earn vastly more than you do. He also has Cerebral Palsy, it's not cheap to have such a condition, even with certain disability benefits which he rightly claims. He can't cook for himself, further than microwaving, can't use a kettle, and because he earns 'too' much he now can't claim motability, AFAIK. IE transport food and coffee are just somethings he often has to pay much more for. He gets by, he has no kids, a modest place, but AFAIK he has everything he needs (car aside) to keep himself happy.

[vixen1700]

ruggedscotty said:

London ! Why ? What is it with the fascination of living in London ?

Any time Ive been all ive seen is a city that is full of depressed souls working every hour and struggling to have any decent life while telling everyone that they live in London.....


A life obsessed with square meterage and the cost of a parking permit....


jesus wept rivers of tears... this isn't life this is purgatory. Wake up and take stock, what is it that fascinates about the London experience what makes it so special ?

Move to the sticks relax and live within your means,

I'm originally from London, grew up and went to school here.

Lived in a little villiage on the North Essex/Cambs/Suffolk borders for ten years, and now enjoy living back in London.

Don't get me wrong, living back in East London is far from perfect, but both me and my wife far prefer it.

Suppose you're city people or you're not.

[Pothole]

Shnozz said:

Then you read that consumer debt and mortgage debt are at all time highs.

Then I scoff and throw that article in the bin. A mortgage is not a debt while the housing market is rising. Media portrayals of the "debt burden" are rarely accurate (in either "direction").

OP: move away from London. Life will be much better for everyone, especially the children.

[bitchstewie]

Isn't it as simple as live somewhere cheaper and commute?

Whenever I go to London I'm struck by the sheer number of people employed in the service industry and I'm pretty sure they all live somewhere that means they can get to work and back, and I'm positive they'd kill to earn anything close to £40k.

They cut their pattern to the cloth.

[Pothole]

bhstewie said:

They cut their pattern to the cloth.

Reverse engineering? I like it.

[bitchstewie]

Pothole said:

Reverse engineering? I like it.

Balls

[fido]

By yourself you'll just scrape by on 40k - no dreams of owning your own place - unless you already have a place in which case 40k will get you some toys and holidays for yourself. Hence two people on that sort of salary is required in London if you have any aspirations beyond singledom.

[craigjm]

The kind of money you are talking about is not poverty money in London. As someone above said London is more than zone 1-2. The money you are pulling is a kings ransom compared to the kind of money people working in McDonald’s and other minimum wage service jobs are earning. These people have to still live with family even when married and often there are three generations of the same family living in the same house. Modern society says that we should have a house or our own and all that but you don’t have to go that far back in history to find multi generation living the norm, even outside of London. If you have a roof over your head, running water, electricity and sewerage then you are not in poverty. Certainly the east end would have been sharing outside toilets between families.

[Tim1989]

The finance section on here is absolutely stuffed full of excellent posts, but only on Pistonheads would somebody be struggling to balance the books at well over three times the average UK salary.

To the OP, there’s plenty of people both outside and inside London raising two kids on a quarter of what your salary is. Presumably they do what all of us do who earn under the £100k Pistonheads average salary and make sacrifices. There’s no secret strategy to it.

[xeny]

creampuff said:

if you are on a single income of £40,000 before tax in London, have a mortgage, have kids..... what is your budget to make ends meet?

If you're on £40,000 you're unlikely to have a mortgage - let's say you can get a 4.5x multiple of salary, that's £180,000, which means you'd be looking at a significant deposit. In reality, you'd commute in, and ideally find a handy grandparent to babysit so you could both work.

[williaa68]

Fermit and Sexy Sarah said:

My older brother lives in Ealing. As the senior BBC iplayer engineer he doesn't earn vastly more than you do. He also has Cerebral Palsy, it's not cheap to have such a condition, even with certain disability benefits which he rightly claims. He can't cook for himself, further than microwaving, can't use a kettle, and because he earns 'too' much he now can't claim motability, AFAIK. IE transport food and coffee are just somethings he often has to pay much more for. He gets by, he has no kids, a modest place, but AFAIK he has everything he needs (car aside) to keep himself happy.

Slightly off topic but the mobility components of PIP or the old DLA aren't means tested. So if you brother qualifies he should receive the benefit regardless of income. Worth him having a chat with a benefits specialist at his local Citizen's advice bureau who can help him make a claim.