The average British family now needs to bring home a staggering £24,600 a year – just to break even, a study revealed yesterday.
The mind-boggling figure consists of mortgage or rent, utilities, insurance, food shopping and motoring.
It also includes cost of dressing the family, owning a mobile phone and landline, travelling to and from work and maintaining a property.
Incredibly, this wallet-busting amount of money does not include any luxuries whatsoever – such as takeaways, restaurant meals, night outs, weekends away or holidays.
Yesterday, Andrew Barker, managing director of Skipton Financial Services, the mutually-owned financial adviser which carried out the study of 2,000 households, said: “It's frightening how everything adds up.
”The cost of living is astronomical and now more than ever people have to be on the ball with their expenditure and to keep on top of things, particularly at a time where inflation is riding well above target at 5 per cent. Inflation continues to hit families hard with the rising prices of food, petrol and energy bills.
“It is not surprising that mortgage interest is the number one spend, even though interest rates are at rock bottom levels. However, it is incredible to see that the cost of feeding the family is almost as expensive at almost £4,500 a year.
The study analysed the spending habits of parents with at least two children living under the same roof.
It found mortgage repayments burn the biggest hole in mum and dads’ pockets – totalling £4,730 a year.
While the weekly food shop total isn’t far behind – averaging £86 a week or £4,457 over the course of 12 months.
Filling up the car with petrol comes to £47 a week, or £2,452 a year.
Commuting to and from work adds another £2,445 strain on a family’s finances and paying off credit card bills and loans make up another £3,131 every year.
Utility bills emerged as £1,282 and even Sky or cable TV subscriptions come to £476.
Another £1,217 goes on council tax and £896 is spent on car insurance and taxing the vehicle.
Even mobile phone bills comes to £368.
The survey found four in ten tend to spend most of their cash on things they want, rather than save it for the future.
Just over 40 per cent admitted to having a savings account, putting away on average £86 a month.
Yet a quarter said this is less than this time 12 months ago – with them sticking away £54 less each month.
It also emerged three quarters of women compared to six in ten blokes said they looked after the purse strings in their household.
And two thirds were in agreement that women were better at looking after money.
Andrew Barker added: “Don’t forget that our research showed households need to actually bring home £24,600 to break even. To bring home this figure, once income tax and national insurance has been taken into account, a basic rate taxpayer would actually have to earn £32,702.
“With many sectors currently suffering a pay freeze, it is difficult to increase your monthly incomings so it is even more important to be ahead of the game with your expenditure. Get your bank statements and check all direct debits and standing orders.
‘’It is vital that you are aware how much is going out of your account and you may even spot things like magazine subscriptions or gym memberships that are no longer needed or no longer essential spends.
“Make a monthly budget plan and put everything on there. People often forget to add non-regular items like holidays or Christmas spending so, for annual events, divide by 12. If you buy lunch or a coffee every day at work, multiply the cost by 20 to get the monthly cost.
“With a pressure on families to manage their budgets, it is even more important to maximise the growth of any money you have saved or invested. You may have invested money years ago and have no idea how it is performing. If so, speak to your financial adviser. It may be that the money was in the right place when it was invested but that it is now not delivering the growth you need to support your family.’’
