I should make it clear, right from the off, that a) my definition of ‘skint’ is pretty cushy compared with that of someone who is genuinely on the breadline: my husband has a job that pays what should count as a decent wage and I work part-time; our children do not go without, and that b) once you know the basic history of my work, income and expenditure, you will probably regard my financial situation today as my own fault, or a matter of choice (or a combination of both), and you’ll be pretty much right. As you will see, there was also an element of youthful ignorance involved early on but, as our teachers told us, ignorance is not an excuse.
The facts of the matter are these: Alex and I bought our first house, a little two-up, two-down Victorian end terrace, when we were both 25. At that time I was earning £14,000 per annum as an editorial assistant and commuting to London, which ate a big chunk of income (and this was a ‘graduate job’!), and Alex was earning slightly less working 30 minutes’ drive from home. Our mortgage was £400 a month and seemed, to us, extortionate. Remember this was only (only!?) 16 years ago.
We didn’t have kids then, so goodness knows what we did with our time, but I remember we had cheap holidays (we got one Teletext deal to Menorca for £159 each), drove old cars and did bugger all to improve our house apart from the occasional bit of painting. I continued buying the same kind of food I’d bought when we were students (yep, we’ve been together since the year dot) and I shopped at places like New Look because there was no Primark and Tesco only sold groceries (imagine!?) On first reflection I have no idea where the money went, but when I think a little harder I remember I did tend to stop to pick up a pain au chocolate and freshly squeezed orange juice from a nice little patisserie in Bloomsbury on my way to work … and my colleagues and I would often go to the pub at lunchtime … and generally we’d go after work too, especially on a Friday. Hey, I was in my twenties and it was London! Alex and I also liked our restaurants, as I recall, and our wine, and our Indian takeaways. Hazy though that time is, my dad was right when he said we were well off: DINKies, he called us (double income, no kids).
16 years, three kids, various entirely preventable remortgages and – I’ll admit it – five amazing holidays (see!) later and we’re in another, bigger end terrace and doing quite different jobs. Alex’s career has progressed well and I’m a qualified teacher. I’m still earning around £14,000 per year, but the difference is I’m earning it working part-time as a freelancer. I still shop cheaply (clothes, food, makeup etc). I’ve never had any part of myself professionally waxed (keep an eye out for my homage to Veet waxing strips, posting soon!!) and have only had my nails ‘done’ once, which was for my wedding. The shocker is that, had we known our financial arses from our elbows in the early days, our mortgage could now be £40,000 or less.
Instead, at the time of writing it is £148,000, which is exactly what we paid for the property.
I shudder as I write this.
Our current home, which seemed so big and grown up when we moved into it 12 years ago, now feels cramped and run down, at a time when many of our friends have overtaken us and progressed to immaculate, four-bedroomed detached numbers or at least spacious semis with lovely gardens. We’re going to struggle to find the equity to take that next step. If any young, first time buyers happen to be reading this, please take the advice that no-one gave us when we started out:
- Shop around for the best mortgage – we were conned into an endowment which, long story short, set us back years – and either choose the shortest term you can manage or, to be on the safer side, choose a longer term but make overpayments on it as soon as you can afford to – ideally from day one. You will knock years off the mortgage.
- Once you’ve got your mortgage, live within your means and don’t add to it just to feel temporarily better off. Over the last decade Alex and I have thrown countless loans and overdrafts into the mix, tacking them on to the insidious, slyly swelling monster with a false sense of feeling freed up (out of sight, out of mind, right? Yay, let’s go to Disney again!) but, believe me, it all comes home to roost. And …
- If you’re anything like me and suspect you might flit from job to job and bugger about training for new careers all over the place, get a private pension in addition to the company one. Just bite the bullet and set it up; it’ll be relatively painless. All I have is a couple of years of teacher pension floating about somewhere. I should start a private one right now, shouldn’t I? Trouble is, at my age I’d need to set aside 20% of what I earn; more like 40%, come to think of it, because I’m a part-timer. Oh, and guess what? I need that 40%. I need the 20%, because I’m skint!
- Read everything to do with mortgages and pensions at www.moneysavingexpert.com – I wish this had been around when I was 25.
Looking forward, rather than staring glumly behind me, my toddler will be starting school in a couple of years and already I’m going to be increasing my working hours from September. I should also point out that I don’t regret training as a teacher or working part-time; these things were/are lifestyle choices and I feel very fortunate to have this time with my children. And the whole higgledy piggledy mess has provided me with some valuable opportunities: to solve problems creatively; to be resourceful and mindful; to source exciting, cheap or free family days out (more to come on all of this); to write! Happily for me, it’s also taught me an invaluable life lesson and now, for the first time, I am living within my means in a sustainable way. Better late than never …
I wouldn’t change my family for the world. I wouldn’t change the gap between my second and third children, despite the delay it’s caused in my return to full-time work. I wouldn’t change the family holidays, although I’d certainly substitute a few fun camping trips for big Disney blow-outs.
What I would change is the £108,000.