One pay packet from being homeless
Discussion
I have heard this banded around so much that the average population are only one or two pay cheques away from being homeless.
I did think that in practice this is probably not true as people generally have family to fall back on etc. That said the more I think about it, I know a lot of friends who live hand to mouth every month spending way more than they earn. A lot of friends do not have the ability to miss social events and will get themselves into all sorts of debts just to go out.
Personally, I am fairly risk averse in this department and have built up a 'fall back' fund, mainly because I moved from a long term role into a higher paid, but less secure position. I do not have any children or dependants so made sure I shunned a few things.
Do any of you happily live month to month spending all your salary, or know anybody that does fall into this 'one pay packet from being homeless'?
I have worked a lot with homeless charities and have seen first hand this happen to people. Just interested in the risk appetite of people that live in this way.
I did think that in practice this is probably not true as people generally have family to fall back on etc. That said the more I think about it, I know a lot of friends who live hand to mouth every month spending way more than they earn. A lot of friends do not have the ability to miss social events and will get themselves into all sorts of debts just to go out.
Personally, I am fairly risk averse in this department and have built up a 'fall back' fund, mainly because I moved from a long term role into a higher paid, but less secure position. I do not have any children or dependants so made sure I shunned a few things.
Do any of you happily live month to month spending all your salary, or know anybody that does fall into this 'one pay packet from being homeless'?
I have worked a lot with homeless charities and have seen first hand this happen to people. Just interested in the risk appetite of people that live in this way.
supercommuter said:
I did think that in practice this is probably not true as people generally have family to fall back on etc. That said the more I think about it, I know a lot of friends who live hand to mouth every month spending way more than they earn.
I think this is the majority case in the UK - Many people sail pretty close to the wind but even if you do stop paying your mortgage /rent, you have a reasonable amount of time to sort things out before actually being homeless.Not so true in the US I think where people do go from receiving a steady paycheck to living in their car pretty swiftly.
It is in part a generational thing.
I'm mid-late 20's and live in London zone 3, luckily a "homeowner" well the bank is, but my monthly living expenses are ~£2,000 for home and living costs, that's without many luxuries.
With the majority of people earning significantly less but with living costs not too dissimilar it's near impossible to build up a 6 month rainy day fund (hell even I can't), for most it just takes an unexpected bill or 2 before any savings have vanished...
I'm mid-late 20's and live in London zone 3, luckily a "homeowner" well the bank is, but my monthly living expenses are ~£2,000 for home and living costs, that's without many luxuries.
With the majority of people earning significantly less but with living costs not too dissimilar it's near impossible to build up a 6 month rainy day fund (hell even I can't), for most it just takes an unexpected bill or 2 before any savings have vanished...
kiethton said:
It is in part a generational thing.
I'm mid-late 20's and live in London zone 3, luckily a "homeowner" well the bank is, but my monthly living expenses are ~£2,000 for home and living costs, that's without many luxuries.
With the majority of people earning significantly less but with living costs not too dissimilar it's near impossible to build up a 6 month rainy day fund (hell even I can't), for most it just takes an unexpected bill or 2 before any savings have vanished...
I think you are a lot like me. But I live miles outside London and commute in on the bike. So my monthly outgoings are significantly less!I'm mid-late 20's and live in London zone 3, luckily a "homeowner" well the bank is, but my monthly living expenses are ~£2,000 for home and living costs, that's without many luxuries.
With the majority of people earning significantly less but with living costs not too dissimilar it's near impossible to build up a 6 month rainy day fund (hell even I can't), for most it just takes an unexpected bill or 2 before any savings have vanished...
fat80b said:
supercommuter said:
I did think that in practice this is probably not true as people generally have family to fall back on etc. That said the more I think about it, I know a lot of friends who live hand to mouth every month spending way more than they earn.
I think this is the majority case in the UK - Many people sail pretty close to the wind but even if you do stop paying your mortgage /rent, you have a reasonable amount of time to sort things out before actually being homeless.Not so true in the US I think where people do go from receiving a steady paycheck to living in their car pretty swiftly.
More than 16m people in the UK have savings of less than £100. In five areas of the country, more than half the adult population has savings below that level
www.bbc.co.uk/news/business-37504449
www.bbc.co.uk/news/business-37504449
I have often wondered if you lose you job, contact the mortgage provider and say that you are out of work, how long will they allow you to hold off paying your mortgage (charging you extra or course) before they move to repossess?
Edit to add... I’ve just looked it up. Apparently you can be three months behind on a mortgage before they even start talking about court action and then that can take another three months before they are granted possession so in reality you have six months to sort yourself out. That’s without even contacting them and explaining your situation.
Edit to add... I’ve just looked it up. Apparently you can be three months behind on a mortgage before they even start talking about court action and then that can take another three months before they are granted possession so in reality you have six months to sort yourself out. That’s without even contacting them and explaining your situation.
Edited by craigjm on Thursday 12th October 15:39
Saleen836 said:
fat80b said:
supercommuter said:
I did think that in practice this is probably not true as people generally have family to fall back on etc. That said the more I think about it, I know a lot of friends who live hand to mouth every month spending way more than they earn.
I think this is the majority case in the UK - Many people sail pretty close to the wind but even if you do stop paying your mortgage /rent, you have a reasonable amount of time to sort things out before actually being homeless.Not so true in the US I think where people do go from receiving a steady paycheck to living in their car pretty swiftly.
I'll be honest we're just about liquid these days.
Actually thanks to the way regulations are set in the UK in regards to debt we're probably safer than a lot of people.
We've got about £10k in savings, and we owe about £8k - which is a bit odd admittedly but a lot of the debt is tied up in a PCP for my Wife's car which is covered by her mileage allowance. If 'it all went wrong' we're free to keep our savings at the same time as asking our creditors to accept next to SFA until we're on our feet again, wouldn't do much for the old Experian Credit Score but the kids would still get fed, the lights would stay on etc.
When we first lived together it was tough, my Wife was a student and we just had my income, which was pretty dire at the time, I'd been made redundant from Banking at the height of the crash and took a 50% pay cut to find work, When she graduated things got a lot easier, we didn't have a huge pile of savings, but about a months worth of take-home pay, plus we managed our finances so we could, just about, cover everything on either of our incomes, I was made redundant again a few years later and we managed through it without much pain and stress but an unexpected Baby (worth every penny and more) meant we've spent about £30k on Childcare over the last 3 years, I think it's actually closer to £40k, I don't dare work it all out.
Last year was pretty much the most stressful, we outgrew our last place, we held on as long as we could but it was unbearable, the new place is a lot bigger and lovely, but costs a lot more, a lot, lot more, but our Daughter started School Nursery a few weeks ago, it didn't halve our childcare bill, but it took a decent lump out of it and things are a bit easier and our debt level drops a decent lump every month, come next September we're be pretty much back to the way things were. All things considered - I think it would have cost £50k to raise our Daughter from Day 1 to first day of school, but it's only money - I only mention it to remind myself why things have been so tight for the last couple of years.
As for the title - it's not impossible, but it's pretty hard to find yourself homeless in the UK if you have kids, local councils are duty bound to put a roof over your head, it can take months and months to evict someone from a rented place, mortgage homes take 6 months usually and creditors pretty much have to roll over these days.
Actually thanks to the way regulations are set in the UK in regards to debt we're probably safer than a lot of people.
We've got about £10k in savings, and we owe about £8k - which is a bit odd admittedly but a lot of the debt is tied up in a PCP for my Wife's car which is covered by her mileage allowance. If 'it all went wrong' we're free to keep our savings at the same time as asking our creditors to accept next to SFA until we're on our feet again, wouldn't do much for the old Experian Credit Score but the kids would still get fed, the lights would stay on etc.
When we first lived together it was tough, my Wife was a student and we just had my income, which was pretty dire at the time, I'd been made redundant from Banking at the height of the crash and took a 50% pay cut to find work, When she graduated things got a lot easier, we didn't have a huge pile of savings, but about a months worth of take-home pay, plus we managed our finances so we could, just about, cover everything on either of our incomes, I was made redundant again a few years later and we managed through it without much pain and stress but an unexpected Baby (worth every penny and more) meant we've spent about £30k on Childcare over the last 3 years, I think it's actually closer to £40k, I don't dare work it all out.
Last year was pretty much the most stressful, we outgrew our last place, we held on as long as we could but it was unbearable, the new place is a lot bigger and lovely, but costs a lot more, a lot, lot more, but our Daughter started School Nursery a few weeks ago, it didn't halve our childcare bill, but it took a decent lump out of it and things are a bit easier and our debt level drops a decent lump every month, come next September we're be pretty much back to the way things were. All things considered - I think it would have cost £50k to raise our Daughter from Day 1 to first day of school, but it's only money - I only mention it to remind myself why things have been so tight for the last couple of years.
As for the title - it's not impossible, but it's pretty hard to find yourself homeless in the UK if you have kids, local councils are duty bound to put a roof over your head, it can take months and months to evict someone from a rented place, mortgage homes take 6 months usually and creditors pretty much have to roll over these days.
Edited by P-Jay on Thursday 12th October 15:52
P-Jay said:
I'll be honest we're just about liquid these days.
Actually thanks to the way regulations are set in the UK in regards to debt we're probably safer than a lot of people.
We've got about £10k in savings, and we owe about £8k - which is a bit odd admittedly but a lot of the debt is tied up in a PCP for my Wife's car which is covered by her mileage allowance. If 'it all went wrong' we're free to keep our savings at the same time as asking our creditors to accept next to SFA until we're on our feet again, wouldn't do much for the old Experian Credit Score but the kids would still get fed, the lights would stay on etc.
When we first lived together it was tough, my Wife was a student and we just had my income, which was pretty dire at the time, I'd been made redundant from Banking at the height of the crash and took a 50% pay cut to find work, When she graduated things got a lot easier, we didn't have a huge pile of savings, but about a months worth of take-home pay, plus we managed our finances so we could, just about, cover everything on either of our incomes, I was made redundant again a few years later and we managed through it without much pain and stress but an unexpected Baby (worth every penny and more) meant we've spent about £30k on Childcare over the last 3 years, I think it's actually closer to £40k, I don't dare work it all out.
Last year was pretty much the most stressful, we outgrew our last place, we held on as long as we could but it was unbearable, the new place is a lot bigger and lovely, but costs a lot more, a lot, lot more, but our Daughter started School Nursery a few weeks ago, it didn't halve our childcare bill, but it took a decent lump out of it and things are a bit easier and our debt level drops a decent lump every month, come next September we're be pretty much back to the way things were. All things considered - I think it would have cost £50k to raise our Daughter from Day 1 to first day of school, but it's only money - I only mention it to remind myself why things have been so tight for the last couple of years.
Very honest. I must say the idea of having a child worries me from a financial perspective. Unjustifiably so, I think. It really does look like an expensive game!Actually thanks to the way regulations are set in the UK in regards to debt we're probably safer than a lot of people.
We've got about £10k in savings, and we owe about £8k - which is a bit odd admittedly but a lot of the debt is tied up in a PCP for my Wife's car which is covered by her mileage allowance. If 'it all went wrong' we're free to keep our savings at the same time as asking our creditors to accept next to SFA until we're on our feet again, wouldn't do much for the old Experian Credit Score but the kids would still get fed, the lights would stay on etc.
When we first lived together it was tough, my Wife was a student and we just had my income, which was pretty dire at the time, I'd been made redundant from Banking at the height of the crash and took a 50% pay cut to find work, When she graduated things got a lot easier, we didn't have a huge pile of savings, but about a months worth of take-home pay, plus we managed our finances so we could, just about, cover everything on either of our incomes, I was made redundant again a few years later and we managed through it without much pain and stress but an unexpected Baby (worth every penny and more) meant we've spent about £30k on Childcare over the last 3 years, I think it's actually closer to £40k, I don't dare work it all out.
Last year was pretty much the most stressful, we outgrew our last place, we held on as long as we could but it was unbearable, the new place is a lot bigger and lovely, but costs a lot more, a lot, lot more, but our Daughter started School Nursery a few weeks ago, it didn't halve our childcare bill, but it took a decent lump out of it and things are a bit easier and our debt level drops a decent lump every month, come next September we're be pretty much back to the way things were. All things considered - I think it would have cost £50k to raise our Daughter from Day 1 to first day of school, but it's only money - I only mention it to remind myself why things have been so tight for the last couple of years.
Having recently married, I had to set it straight that we won't be having kids for a few years. Which my wife is fine with luckily!
supercommuter said:
P-Jay said:
I'll be honest we're just about liquid these days.
Actually thanks to the way regulations are set in the UK in regards to debt we're probably safer than a lot of people.
We've got about £10k in savings, and we owe about £8k - which is a bit odd admittedly but a lot of the debt is tied up in a PCP for my Wife's car which is covered by her mileage allowance. If 'it all went wrong' we're free to keep our savings at the same time as asking our creditors to accept next to SFA until we're on our feet again, wouldn't do much for the old Experian Credit Score but the kids would still get fed, the lights would stay on etc.
When we first lived together it was tough, my Wife was a student and we just had my income, which was pretty dire at the time, I'd been made redundant from Banking at the height of the crash and took a 50% pay cut to find work, When she graduated things got a lot easier, we didn't have a huge pile of savings, but about a months worth of take-home pay, plus we managed our finances so we could, just about, cover everything on either of our incomes, I was made redundant again a few years later and we managed through it without much pain and stress but an unexpected Baby (worth every penny and more) meant we've spent about £30k on Childcare over the last 3 years, I think it's actually closer to £40k, I don't dare work it all out.
Last year was pretty much the most stressful, we outgrew our last place, we held on as long as we could but it was unbearable, the new place is a lot bigger and lovely, but costs a lot more, a lot, lot more, but our Daughter started School Nursery a few weeks ago, it didn't halve our childcare bill, but it took a decent lump out of it and things are a bit easier and our debt level drops a decent lump every month, come next September we're be pretty much back to the way things were. All things considered - I think it would have cost £50k to raise our Daughter from Day 1 to first day of school, but it's only money - I only mention it to remind myself why things have been so tight for the last couple of years.
Very honest. I must say the idea of having a child worries me from a financial perspective. Unjustifiably so, I think. It really does look like an expensive game!Actually thanks to the way regulations are set in the UK in regards to debt we're probably safer than a lot of people.
We've got about £10k in savings, and we owe about £8k - which is a bit odd admittedly but a lot of the debt is tied up in a PCP for my Wife's car which is covered by her mileage allowance. If 'it all went wrong' we're free to keep our savings at the same time as asking our creditors to accept next to SFA until we're on our feet again, wouldn't do much for the old Experian Credit Score but the kids would still get fed, the lights would stay on etc.
When we first lived together it was tough, my Wife was a student and we just had my income, which was pretty dire at the time, I'd been made redundant from Banking at the height of the crash and took a 50% pay cut to find work, When she graduated things got a lot easier, we didn't have a huge pile of savings, but about a months worth of take-home pay, plus we managed our finances so we could, just about, cover everything on either of our incomes, I was made redundant again a few years later and we managed through it without much pain and stress but an unexpected Baby (worth every penny and more) meant we've spent about £30k on Childcare over the last 3 years, I think it's actually closer to £40k, I don't dare work it all out.
Last year was pretty much the most stressful, we outgrew our last place, we held on as long as we could but it was unbearable, the new place is a lot bigger and lovely, but costs a lot more, a lot, lot more, but our Daughter started School Nursery a few weeks ago, it didn't halve our childcare bill, but it took a decent lump out of it and things are a bit easier and our debt level drops a decent lump every month, come next September we're be pretty much back to the way things were. All things considered - I think it would have cost £50k to raise our Daughter from Day 1 to first day of school, but it's only money - I only mention it to remind myself why things have been so tight for the last couple of years.
Having recently married, I had to set it straight that we won't be having kids for a few years. Which my wife is fine with luckily!
Currently in a 2 bed flat, only ~£60k of equity and I'd then need a £500k mortgage to get a proper 3 bed semi that's in an area suitable for raising a child in the same general location. That amount of borrowing is doable but its only me with the decent salary I wouldn't feel comfortable increasing the £2k living costs to £2.5k a month as I'd only have ~£100pw to actually live on (before repaying other debt etc.)
i tempt fate here a little as any significant surplus by way of bonus etc I tend to use to chip at the mortgage which although in itself is much more responsible than spunking it on a motorbike it does mean I don't sit on large cash reserves. We have a decent chunk in the bank for kids uni fees (grand parent contributions) which in reality would probably be used as an emergency fund if it came down to wire and repaid back at a later date. my wife is a teacher so in the "job for life" health permitting. Mine is far more risky but I have long service so would get a nice pay off if I was made redundant. We tend to spend all of our money otherwise month to month, which generally speaking results in a lot of money going out for what appears to be a relatively average lifestyle...
It's an interesting topic, especially as I believe we are only a short period away from another crash based on borrowing levels, already rock-bottom interest rates, Sterling on its arris etc etc. Seems a perilous situation that has been brewing for some time and almost inevitable once defaults start.
I have a tenant in a house of mine who was earning decent enough money (1.5 times average UK income in an area with low cost of living and I would imagine only a small % earning UK average, let alone way above). Family of 4 and lived hand to mouth to include a mortgage. Previous recession hit and job went, house of cards came crashing down soon after. I know this as he failed the credit check when seeking to rent the house and the situation was explained; he has since been the model tenant but has now found himself renting a house for nearly 10 years now. A small rainy day fund would have seen them through the bleak period.
You'd be hard-pressed to ever have a big enough contingency pot to survive indefinitely unless you are 50+, but if you can at least put aside a bit of a buffer it could save you a lot more additional expense. Conversely, the same buffer if not needed can be used to capitalise if values fall to use it to your advantage. As often though, there seems a general reluctance across the population to cut their cloth not to their means, but beneath them enough to build a get out of jail/investment fund that can be seen as an irrelevance when its not needed or beneficial. Savings pots don't photograph well for instagram.
I have a tenant in a house of mine who was earning decent enough money (1.5 times average UK income in an area with low cost of living and I would imagine only a small % earning UK average, let alone way above). Family of 4 and lived hand to mouth to include a mortgage. Previous recession hit and job went, house of cards came crashing down soon after. I know this as he failed the credit check when seeking to rent the house and the situation was explained; he has since been the model tenant but has now found himself renting a house for nearly 10 years now. A small rainy day fund would have seen them through the bleak period.
You'd be hard-pressed to ever have a big enough contingency pot to survive indefinitely unless you are 50+, but if you can at least put aside a bit of a buffer it could save you a lot more additional expense. Conversely, the same buffer if not needed can be used to capitalise if values fall to use it to your advantage. As often though, there seems a general reluctance across the population to cut their cloth not to their means, but beneath them enough to build a get out of jail/investment fund that can be seen as an irrelevance when its not needed or beneficial. Savings pots don't photograph well for instagram.
That actually sounds pretty cheap for full time childcare, we peaked at around £1800 a month (for two).
I was made redundant a few years back, the Co. went down and hardly anyone got paid for even the month they were working let alone any redundancy. I was lucky but the 3 months of being unemployed wiped out all my savings. That was more luck than judgement as I'd been saving for a new-old car. I now keep a bigger buffer and no other debts.
This would be a key concern for me over a lease motor, I can afford it now but if I lost my job I have no money and no car.
I was made redundant a few years back, the Co. went down and hardly anyone got paid for even the month they were working let alone any redundancy. I was lucky but the 3 months of being unemployed wiped out all my savings. That was more luck than judgement as I'd been saving for a new-old car. I now keep a bigger buffer and no other debts.
This would be a key concern for me over a lease motor, I can afford it now but if I lost my job I have no money and no car.
Sheepshanks said:
Been discussed lots before - it's the same as the "half of households have less than £100 savings" thing.
I swear these headlines are fictional I don’t know anyone who’s a month from being homeless or has less than £100 savings. I cashed in the kids piggy bank the other week it had £91 in it (it’s a big pig) so find it pretty hard to think that apparently every other person in the whole country doesn’t have £100 saved. supercommuter said:
Very honest. I must say the idea of having a child worries me from a financial perspective. Unjustifiably so, I think. It really does look like an expensive game!
Having recently married, I had to set it straight that we won't be having kids for a few years. Which my wife is fine with luckily!
Yeah, my Wife was 'fine' with it too ha ha.Having recently married, I had to set it straight that we won't be having kids for a few years. Which my wife is fine with luckily!
To be honest again, it's the most outrageous 'change in circumstances' I've ever experienced, nothing really prepares you for it - sticking to just the financial side of things for a moment. Full time childcare with any place reputable is going to cost you £900 a month, that's it, if you've got family to help, it makes a huge difference but my folks live abroad and my Wife's mother passed away a few years ago.
We both earn more than the national average, we live in Cardiff, which is pricer than a lot of the UK, but not a patch on the South East, but decent income, not massive expenses, we were doing okay, but despite that, never, not once, did I even think about strolling down the Porsche Garage and say "I'd like a brand new Cayman S please" even though I'd love one, not once, because after working in finance I knew roughly what it would cost and it was more than I could afford to spend on such a luxury. It's costs about £700 a month to lease a 718 S with PDK, a lot of money, I couldn't afford that - a month before our Daughter was born my Wife started her Maternity leave - our income fell by £700 a month...
About that time we spent a few grand on stuff for her, I didn't bat an eyelid, I dropped 2 months worth of Porsche payments over the counter of Mothercare alone I think.
When she was 8 months old my Wife returned to work, not quite full time, but enough to keep her career going, she was still at the start of hers and didn't want to fall behind, it was heart wrenching but after touring the city checking out places we chose a Day Nursery and dropper her off, we made a deal with our employers so my Wife would work 4 days a week and I'd been home Friday afternoons, partly because I didn't want her raised by Nursery staff and party because of the cost. It was still £800 a month or so.
At a rough guess, the extra expenses of just childcare and housing since we had our Daughter was about £1400 a month at peak, down to about £1200 now - if we went for a standard manual 2.0 718 we could have one each!
Come next Sept childcare becomes a couple of quid a day stuff, we're fairly flexible work wise so I can take her to school and my wife pick her up, I'd guess we'll be possibly £600 a month better off, we're both earning more now than when our Daughter was born thankfully - we'll be in a better position month on month than ever before - will I get that Porsche? will I f
k, partly because after the last few years I'd be happier having the money in the bank rather than renting a Porsche, maybe when we're debt free (or close to, seems the only way to have a new car now is rent one) I'll squirrel away few grand and buy an old one - the bubble will have burst by then. On balance though, I'm happier than I ever have been, money is just money, it comes, it goes, I worry sometimes (a lot) but I always have, I've had anxiety since I was 8 - it just finds something to focus on.
My best mate is single, always has been, never had kids, probably never will - his house is largely white, something people will kids tend to avoid - he's got a weekend car, a C63 AMG, it's lovely, I haven't checked, but I suspect the back of the passenger seat isn't covered in tiny shoe marks, the carpet is less than 95% baby spit, vomit, toys and Peppa Pig 'stuff' and on long trips he listens to the engine roaring, not the passengers whining. I'm sure he pities me, he's too polite to say so, but the opposite is also true sometimes, he comes home, plonks himself on his never-been-pooed-on sofa and relaxes, I'll get home about 6, but won't rest until about 8, but closer to 9 - BUT, when I do come home the first thing I'll hear is "DADDDDDDDDDDDDDY" as my Baby comes running to see me - I'd pay anything for that.
Gassing Station | The Lounge | Top of Page | What's New | My Stuff