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Minimum income calculator

Minimum annual wage for a couple with one child aged under 1, (adjusted to account for our actual mortgage and energy costs) according to the Joseph Rowntree Foundation’s Minimum Income Standard

Ever since I started this blog, I have been plagued by the thought that potential readers would be perfectly justified in dismissing my money-saving efforts as ridiculous. At the outset, I set myself a budget of £80 a week, after mortgage and household bills. To me, it sounded high; after all, unemployment benefit in the UK is currently set at £71 a week and that’s for everything. What’s more, I’ve been regularly relying on store-cupboard ingredients, falling back on store-card loyalty points, foreign currency or vouchers that I had in reserve. I’ve even gone over budget a couple of times. In short, I have felt like a bit of a fraud, albeit one that ’fesses up to her failings.

Today, however, the Centre for Research in Social Policy, funded by the Joseph Rowntree Foundation, published a report entitled A Minimum Income Standard for the UK. It’s a fascinating read. According to the report: “A minimum standard of living today includes, but is more than just food, clothes and shelter. It is about having what you need in order to have the opportunities and choices necessary to participate in society.” You can read the report and discover more about the Centre’s approach here.

Minimum income calculator

Weekly outgoings for a couple with no children, (adjusted to account for our actual mortgage and energy costs) according to the Joseph Rowntree Foundation’s Minimum Income Standard

What I found particularly heartening is that, using the website’s Minimum Income Calculator, I have discovered that my weekly budget falls well below the ‘minimum’: in fact, as a couple with no children, my husband and I would need £557.28 per week to conform to the standard of living defined in this report. To make a direct comparison (i.e. stripping out mortgage costs and household bills), my weekly budget should be £128.30. It appears I am £48.30 short of attaining this meagre standard each week. Now clearly, I actually have more money than this: I am choosing to save it rather than spend it and I am lucky to be in a position to choose at all.

However, it’s not as if we’re saving to buy a pair of designer shoes. We’re saving for the next stage of our lives and that has been bought into sharp perspective by a further turn on the Minimum Income Calculator.

Reader, I would like to have a baby. There I’ve said it. I’m not saying that I want to have a baby right this second, but I would like one in the next few years. I am 30, I am married and I own a tiny proportion of my own home. To the casual observer, there is no reason on this earth that I shouldn’t have one.

My employment contract entitles me to statutory maternity pay (SMP). Nothing more, nothing less. For those not familiar with SMP: for the first six weeks, you get 90% of your average gross weekly earnings. For the remaining 33 weeks, you get £135.45 per week.

Minimum income calculator

Weekly outgoings for a couple with one child aged under 1, (adjusted to account for our actual mortgage and energy costs) according to the Joseph Rowntree Foundation’s Minimum Income Standard

Back to the minimum income calculator. If my husband and I had a child aged 0-1, we would need £619.24 a week, assuming we continued to live in our five-room flat (kitchen-diner, sitting room, 2 bedrooms, bathroom), to achieve this basic standard. My share of that is £309.62. It doesn’t take a genius to work out that my maternity pay would leave me £174.17 short every week, or £5,747.61 over those 33 weeks.

And it doesn’t stop there; it’s not as if I can just go back to my job after nine months and leave the child at home. When/if I go back to work, I will then have to pay for childcare. As you all know, my disposable income is currently £820 per month (and it’s not looking likely that that will change for the better any time soon). According to the calculator, I would need disposable income of £696.17 per month, before childcare to maintain a minimum standard of living. That would leave me £123.83 to spend on child care per month. My official working hours are 9am to 5.30pm. Let’s assume that I never work late (I wish), I make that 40 hours per week. According to the daycare trust’s 2010 report, the average cost for 25-hours of care for children aged under 2 in London was £109. For my 40-hour week, not including travel time, that is £174.40. Errrrrr…..

In other words, with my ‘spare’ £123.83, I could afford just over 28 hours of childcare. Per month. At 2010’s prices. Let’s say the husband chips in: we can afford 56 hours of childcare per month. Woop di woop di woo.

This morning, as per my daily routine, I watched BBC news as I put on my make-up. Today’s discussion was the age at which women are ‘choosing’ to have children. It was the usual discussion: we’re having children later, blah di blah di blah. Women who wait to have children are risking infertility, miscarriages and complications. So far, so predictable—although this was the BBC, so it was less scare-mongering than usual. One aspect that was missing, however, from the segment I watched at least—I had to leave for work half-way through— was the issue of money. Has it not occurred to anyone that even if we’ve miraculously found someone to have children with during our child-bearing years (NOT a given, and something I am thankful for every single day), we can’t actually afford to have them?

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The one that got away

The one that got away

As someone who has watched pretty much every episode of Location, Location, Location ever, I’m sure it would take Kirstie Allsopp precisely three seconds to lose patience with us. We have a long, specific wish list, we’re picky about location and we don’t have much money—so yes, we are a property finder’s nightmare.

What do we want: a period house in Sussex with a large garden that is not overlooked, three bedrooms and a large eat-in kitchen. Must have working fireplace. Preferably a renovation project. Am prepared to knock down plenty of walls.

What we don’t want: anything close to a busy road, anything modern, anything that is too ‘done’ – especially if it is not to my our taste.

The main problem is that we found all this and more, our offer was accepted, the valuation completed, and I spent hours picking paint colours and researching central heating systems—but the mortgage company wasn’t as keen on the renovation project as we were. The day before we were due to exchange and complete, it slapped a retention onto our mortgage offer pending completion of works—thereby rendering it impossible to proceed with the purchase. Humph.

So on to plan 4,623 part B. If we can’t buy the house we want without selling our flat, we would buy a tiny foothold in London first, then sell our flat and escape to the country. The first property is a non-starter. We are outbid almost instantly by an investor. Disappointing. The second property, bingo. Offer accepted, mortgage application in and approved in principle, survey done, solicitor prepped…. and the vendor pulls out. Humph.

On to plan 4,624. We’re now readying our flat for sale, and scanning Rightmove for any of the above. Oh and I’m occasionally getting sidetracked by how far our money would go in France. Watch this space.

To cut a very long story short: it’s audit time at number 53.

We need to save up a lump sum and we need to do it as quickly as possible. Our mission is to cut back and slim down. Well, at the moment, it’s my mission, but I’m hoping the husband will get on board sometime soon.

First step: assess the money we have…

That was quick, you say?  Well yes, because we have NOTHING. Correction, we have a lovely house, incredible friends and family and each other. But we don’t have any spare cash and we need some because we’re chasing the dream—more on that when any of our plans come even close to fruition. Full disclosure: we have the deposit for our next house and a small fund of money at our disposal for essential works on our flat. But that doesn’t really count as it belongs to the bank, rather than us.

Why do we not have any savings? Well, first we saved to buy a dilapidated flat, then we did it up, then we got married, then we went on honeymoon. Then we tried to buy a family home. Three failed property purchases later, and we’ve shelled out three sets of survey, mortgage application and solicitor’s fees. Humph.

Truth be told, with a balance still to clear on my credit card, I actually have minus nothing.

As for money coming in and money going out… well I’m still trying to pin the hubs down on that one, but I’ve done my calculations. I’m a pretty open person, but my employment contract expressly prevents me from revealing my income—suffice to say it is almost exactly the mean, full-time wage in the UK.

So, after income tax, NI, council tax, gas and electricity, mortgage, TV licence, water rates, life insurance, buildings & contents insurance, mobile phone, cable and internet and landline rental, I have £820 left per month.

Sound a lot? It is in the grand scheme of things. A perfectly respectable sum, princely in some parts of the world. But we live in London, we have active social lives and demanding jobs.

If I save £500 a month, it will take me 17 months to reach my goal. That leaves me with £320 a month, or £80 a week, for everything else, broadly: food, travel and entertainment. Again that sounds like a lot. Of course I could live off a lot less if I never went out, never celebrated and never bought presents for friends and family. I could save more if I could devote hours of my day to bargain hunting. But this isn’t just any old mission to save money. There’s a tried and tested formula for that. This is a mission to save money with joy and generosity—and a full-time job.

So I am going to attempt to live off less than £80 cash a week. No debit cards, no credit cards, no loans. Just cash. And when it’s gone, it’s gone.

I say less than, because 17 months sounds like an interminable amount of time to wait and I’ll do everything I can to cut that back. Some weeks it will be possible. Some weeks it won’t.

I’m writing this to keep me on track – but if anyone out there is reading, well hello and thanks for sharing my mission…

© Sin Bozkurt 

Well hello there.

Having barely recovered from the trauma that was wedding planning, and fresh back from the most amazing honeymoon ever, I caught my new husband looking at porn. Property porn.

I’ll freely admit to being property obsessed (well, duh – I married my estate agent) but I would like to point out at this juncture that he started it!

For although I’ve nagged my poor, long-suffering husband for a country idyll of my own for nigh on five years, I had mentally shelved ‘the dream’ for the foreseeable future. Having said that, I jumped right back on that bandwagon with not so much as a backwards glance.

So 10 days into ‘official’ married life, we were heading down the A26. Again. The route was familiar to us; in the run up to our wedding, we’d spent many a fraught Saturday driving through the Sussex countryside in a mad organizational frenzy.

Needless to say, we did not find our dream home that day. But the nugget of an idea was sown. Boy, how my husband must regret that fateful Rightmove search now.

A year later, a hell of a lot of searching (both soul-searching and house hunting), a fair few ‘discussions’, a couple of tantrums (mine), one very helpful mortgage advisor and three failed property purchases later and we’re still looking.

Wish us luck!

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