Family of 6 on €600 week net

S

Surviving Ok

Guest
Tell me if I am being worried over nothing.

We are a family of 6. Parents, 2 teenagers and 2 more younger children.
We have a net combined income of €600 per week.
We have no morgtage and a very modest lifestyle. Never taken a foreign holiday for example. We generaly have a few days in Ireland every year thats it. Our social life is max 2 nights per month.

When all is said and done we live fine on €600 per week but at the end of the year we have nothing saved. It just seems we cannot live on less than €600 per week.

Note we have no other personal borrowings or car loans etc and we also have the monthly childrens allowance.

Would it be fair to say that we are over spending for our type of family unit or are we doing ok in term of money management.

Would really appreciate any comments from the experts.
 
When you say "no mortgage" do you mean that you rent or that you own your own house outright?

Given that you have no borrowings and seem to be living withing your means you are in very good shape to start with - and there's always the possibility for improvement.

The first step would be to get a clear detailed picture of your income and outgoings. On the income side of things make sure that you are availing of all entitlements (e.g. tax credits, welfare payments etc.). On the outgoings you should note down your spending habits for a month or so and average household bills out over the previous year in order to get an average monthly amount etc. The MABS budget spreadsheet is useful for tracking your income/outgoings but all you really need is a piece of paper. Once you have done that you can start planning - e.g. see if you can cut back anywhere, what scope there is for savings, see if you are missing out on any entitlements etc. Does this make sense to you? Please post back with your progress of further queries that you might have. Good luck.
 
O,

Thanks for that. No morgtage means we own house outright. Always paid extra per month into the morgtage up to the point where the third child came along. That took nearly 8 years off the morgtage. That was the best thing we ever did.
Neither do we pay child minding fees. I work evenings/nights wife works days so we manage to do all our own child minding.
Have tried the expense analysis and budgeting things before but long term we dont seem to build any savings.

Seems when we put a few bob together a big expense comes along. Change the car which we do every 5 years or so for a decent low mileage 1 or 2 year old model.

Apart from that its either Christmas, insurance, school expenses, painting a room or two in the house which seems to keep the average bank balance at in or around €500.

Maybe I am being too self critical. Maybe its just a simple fact that €600 or so is needed to keep 6 people on the road.
At the end of the day I guess my question is exactly that. IS €600 a week rate of spending about right in our size op family.
 
You own your own house which is even better. Sounds to me like you are in excellent shape. I don't know what would be a normal/reasonable budget for a family of 6 but I think you could be too hard on yourself. You own your own house and seem to be managing well on a modest budget right now without getting into debt. Give yourself credit for that - it's no mean achievement! ;) However I can understand your frustration if you seem to be stuck at the same financial level all the time and can't get a decent holiday etc...

Have tried the expense analysis and budgeting things before but long term we dont seem to build any savings.
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Did you ever see any opportunities for streamlining your outgoings when you did this? Feel free to post a summary of your monthly "budget" here and maybe people can make suggestions. These sites are pitched at people in debt but also give some generally useful tips on streamlining the outgoings:

www.fool.co.uk/debt/debt.htm
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Do you have any savings other than your bank account (e.g. SSIA, pension etc.)? Do you have life assurance cover?
 
Hi there - I think you should really be clapping yourself on the back to be surviving in your position without slipping into ever-growing debt.

If I have to find something to beat yourself up about, you might want to think about life assurance as O mentions and/or planning for your future, i.e. college funds for kids and/or pensions.

Congrats again...
 
Well we do have life assurance cover €200k each.

Nothing as far as college fees or pension. I just feel at this point that we cannot stretch to covering either one.

At 46 years I guess its probably too late to start a pension given the amont of money I would need to save each month to have any impact at 65 in terms of a pension. Even then it seems to me that almost every one I have talked to who has been on a defined contribution scheme has retired with much less than they had hoped for or had been led to believe would be the case. Too much corruption in the markets for my liking.

As for college fees. I just dont know what to do. Its going to be cap in hand to the bank I fear when the time comes. I've spent my life keeping clear of bank debt but I guess when college time comes I will have no other options. To crown it we will have two children going to college together starting in 2007 and 2008 respectively.
Im just not looking forward to it but I guess it will have to be faced.
 
Its going to be cap in hand to the bank I fear when the time comes.
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With house prices rising you actually have had a decent savings program for the last few years, you invested your extra cash in property.

The bank will most likely have no problems with you when it comes to college time. You've raised 4 kids with no consumer debt. You own a house outright. You should be able to free up some of the equity in the house when the time comes.

I don't know what age you plan to retire but if it's mid sixties you still have almost 20 years to build up a bit of a pension. It's still the most cost effective way of saving, and you're just leaving the tax breaks on the table. But you should definitely talk to someone more qualified than me about this one.

I think you're in good shape.

At least you own everythine you own. :)

-Rd
 
To be honest the issue of pension savings sounds academic right now from what's been posted so far unless there is some scope for reducing outgoings and redirecting the savings elsewhere. In fact if savings were to be made then I wonder if Surviving Ok might prefer (and deserve!) to take a nice holiday rather than putting the money into a pension. ;) How and ever...

It's still the most cost effective way of saving, and you're just leaving the tax breaks on the table.
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Do you and you wife pay income tax at the 20% or the 42% rate? This can be relevant when deciding whether or not to take advantage of pension savings tax deferral. See the guide for a bit more on this: www.askaboutmoney.com/guide/index.htm
 
Thanks everybody for the input. I Guess my situation is not so bad after all. I suppose its a case of sometimes when I look around I see plenty of people who should be on somewhat the same income level as us who appear to have a lifestyle way above what we can seem to afford. Makes me sometimes think we are doing something drastically wrong.
So lesson is never mind how other people live.
Thanks anyway.
 
So lesson is never mind how other people live.
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I read a good quotation in a similar vein recently:

"If one only wished to be happy, this could be easily accomplished; but we wish to be happier than other people, and this is always difficult, for we believe others to be happier than they are." -- Montesquieu ( www.rjgeib.com/thoughts/m...quieu.html )

If you are happy enough with your lot then that's all that matters.
 
I see plenty of people who should be on somewhat the same income level as us who appear to have a lifestyle way above what we can seem to afford. Makes me sometimes think we are doing something drastically wrong.
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Don't believe everything you see. You might see the nice new 04 reg cars in the garden, but you don't see the loans building up at the bank, like
 
One thing you might think about is talking to your teenagers about college. If they have summer jobs and the like, it is a good discipline to get them to save a percentage of what they earn into an account they will use for spending money in college. My parents instilled the savings habit into me and I have always been grateful for that (well as soon as I was allowed to start spending what I had saved anyway!)
 
Whenever I was working - even part time - my parents made me hand up a certain amount to them for rent & board. I think this was a good idea too - at least in retrospect! ;) While I got a grant for fees while in third level education I was otherwise financially self sufficient through out of term work earnings. I'm sure that in this day of no fees (albeit with higher capitation charges than in the past) and more work available having kids who go to college has the potential to be even less of a financial burden than in the past.
 
Family of 6 on Euro600 week net

My first thought on reading your post was about that Charles Dickens character who repeatedly said "Income 2/6d, outgoings 3/-, unhappiness; income 2/6d, outgoings 2/6d, happiness!"

From my professional field I happen to know that a recent spate of sociological research in the US and UK has shown conclusively that 'having more' has NOT resulted in contentment, but in its opposite, and researchers are speculating that this is due to people having nothing to aim for or aspire to.

That said, as someone who for years was self-employed with low income, or on short-term (teaching) contracts, I empathise with your wish to be less vulnerable when big bills (a roof to be mended, or a medical emergency) come, so am offering this.

One unexpectedly-large drain on financial resources is highly-processed, highly-packaged foods. You may be someone who grows your own organic veg in your back garden, or 'cooks from scratch'?.....in which case this advice is redundant. Did you know for example potato crisps cost more per kilo than finest caviar? Unpackaged fruit and veg cost less per kilo; buying pizza bases, tomato puree and toppings of your choice (cheese to grate, sliced ham or pepperoni, green peppers, etc.) gives you a better product for about quarter the price without additives and salt (which all health advice these days is telling us we get too much of!). Today I queued in a Boots Chemist (I live in the UK) behind a young woman who was buying a small plastic bag of apple slices, and she was handing over £1.50 (that's sterling!) for less than the weight of one fresh apple (plus, of course, the food value of fruit and vegetable plummets as soon as you slice it, so she was paying a high price for a plastic bag she was going to drop on the street outside). Filled rolls, for example, cost about £2.50 each (or £10 for 4 youngsters) for a length of french bread with - say - tuna and mayonnaise. The ingredients are not the best. or on the other hand you can instead make fresh tasty sandwich lunches for all 4 youngsters for the price of ONE french stick, ONE small tin of good quality (dolphin friendly) tuna, and quality mayonnaise (even cheaper if you make this yourself, which is a simple process). All the pre-prepared sachets and jars of sauces costing nearly £2 each can be prepared at home for a fraction of the cost.

Initial outlay - for seeds and young plants for a garden to grow fruit and basic vegetables, and on ingredients for real cooking - seems steep, and most people won't go to the bother, but this is the biggest source of

That's my main offering. You've said you work nights and your wife works days so perhaps pre-prepared heavily-packaged foods are your staple (and youngsters don't seem to have any concept of cooking for themselves). It makes a HUGE difference!

The other thing that comes to mind (though I'm sure you've already seen to this - you sound very thorough and organised) is energy-conservation! The huge difference having cavity-walls lagged, insulating roof cavity to the maximum, opening the fridge just ONCE to take out everything needed (as opposed to repeatedly opening the door taking out single items) hanging thick curtains, putting draught-excluders on outer doors, NOT switching lights on and off repeatedly during the evening (the highest consumption of energy is in the switching on/off, I was told recently!) - all adds up.

Hope this is helpful!
 
Re: Family of 6 on Euro600 week net

On a related topic... the Motley Fool Living Below Your Means (LBYM) discussion board contains some similar types of advice - some of it pragmatic like the above and some of it a bit wacky!

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family of 6

I don't see what's so great about owning your house outright if you can't look forward to a decent holiday or do anything nice in your leisure time. There's more to life than paying back your mortgage in as fast a time as possible.
 
Re: family of 6

The point about needing some pleasures in life is a good one. I suppose it depends which is more important to you: pleasure or security. Of course, if you have paid off your mortgage in full, there is no rent or mortgage payment to come out of your monthly budget, so you do have more "cash in hand" than with a mortgage.
 
Tell you what after watching "show me the money" last night I feel I cannot figure out whether I am the greatest miser of all time or a financial wizard.

I think most people replying to my original post seem to think we should let our hair down for once and have a right good holiday. The thing is I and my wife both seem to be unable to get into that particular mindset. There seems to me at least a whole lot of bloody hassle in getting to and from the chosen destination. My guess is that I would probably have a nervous breakdown in the middle of it all.
 
I'd definitely agree with some of the sentiments expressed above that we need to have some fun and not get too obsessed with keeping tabs on the finances. However I get the impression that you, like me, feel more comfortable with the finances under control and wouldn't be the type to splurge on loans/credit cards just to have a good time. Others would and that's their choice. In terms of a holiday/break you should do whatever suits you. If you are happy enough not taking one then that too is fine as long as you're happy/content. Each to their own...
 
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Surviving Ok,

Dont mind these people who think you should 'let your hair down' just for the sake of it.

My guess is that unlike you, they dont have four children to think of.

eDog
 
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