Reality check

Old Jan 29th 2016, 7:56 am
  #46  
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Default Re: Reality check

Originally Posted by Geordie George
I just think your figures have left out a lot of stuff. Some of our costs:
- school band for First Born $460 per annum (excluding uniform costs, not sure of that yet, but bound to take it past $500) (and First Born does go to a public school, not private. It's just that all school activities cost. School started yesterday - we had to provide the usual stuff - whiteboard markers, tissues etc. There's the termly 'voluntary' contributions you're expected to pay etc, etc, etc.)
- weekly violin lesson for First Born $40 per week
- swimming lessons for First Born and the Gorilla $324 per term
- Guides for First Born - I can't remember these fees off the top of my head, but there's annual insurance, term fees and then the uniform, plus costs for any extra activities such as Fun Days, camping, canoeing etc

Just adding in stuff like that easily adds another $300 per month to your costs.

Things here tend to work in terms for school and extracurricular activities, that's why I'm saying that monthly stuff is more tricky.)
Geordie is spot on.

School costs, even public schools, eat into your budget. Our 2 are at primary school. Last years annual fees $920 (for 2 kids) then add in school uniform (tops $30, yr 7 obligatory embroidered jackets $70 etc), additional school trips which vary from $20 to $500 (yr 7 Canberra trip). School lunches, whether using school canteen or packed lunch.

Scouts - our Scout group is cheap, annual fee is just about to increase to $270 per year, scout uniforms, trips, camps.

School sports - term fees varying dependent on sport but will range from low to mid $100s.

Club sports - take your pick and shop around as fees vary between clubs. Then add in the cost of their club strip. Some charge per term, some per season, some per year.

Swimming lessons - look at around $250 per term per child

£55k in Glasgow is a good income, heck, £55k in many parts of the UK is a good income.

Being realistic, you will struggle to live a comparable lifestyle in Melbourne on the income you have mentioned. You would perhaps struggle in Adelaide too, and this is generally seen as one of the cheaper cities to live (although it seems to be catching up with everywhere else!)

I do think some of the figures you quoted were on the low side. Foxtel (SKy equivalent) even the cheapest, bog standard pack (which doesn't even have the standard channels like 10, 9 7) is $25. We have Foxtel iQ and multiroom and full package and pay $124 p/mth.

Broadband/phone packages really vary and it pays to shop around. TPG and Dodo do good packages, if you can get them in the area. you may be lucky enough to get the NBN, but again, shop around for the best deal, but for a decent package to include overseas calls and a decent data allowance, you are going to be looking at the $70-$100 mark.
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Old Jan 29th 2016, 8:10 am
  #47  
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Default Re: Reality check

Originally Posted by jhbsr
Live very very far from like a king, £55k is not a huge sum for a family of 4. Happy to share my UK figures though. Appreciate all the advise just trying to figure thinks out, its going to be a struggle anywhere UK or Oz if one is working part time. UK Figures in £ Mortgage 700Elec/Gas/ouncil Tax 70/70/190Cable TV/Sky Broadband/phone/tv licence 67Mobiles 40 Life Insurance 25Home Insurance 252 Cars Upkeep/Insurance/Road tax 140Fuel 150Car loan 198 Child Care 1042Dog 75 Travel Fares 40 Food & Toiletries 600Disposable Cash/cash left over 500
You also have to take into account that you'll be renting in OZ, while back in Scotland you own a home and are paying off a mortgage. Of course you can rent it out, but you will basically be spending more on rent in Melbourne and will never see that money again.


If you find a rental for $1.400 that's $33.600 wasted in 2 years.
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Old Jan 29th 2016, 8:41 am
  #48  
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Default Re: Reality check

Originally Posted by Moses2013
You also have to take into account that you'll be renting in OZ, while back in Scotland you own a home and are paying off a mortgage. Of course you can rent it out, but you will basically be spending more on rent in Melbourne and will never see that money again.


If you find a rental for $1.400 that's $33.600 wasted in 2 years.
I'd just like to point out, that over the life of a $700,000 mortgage, you'd be paying approx $800,000 in interest, on top of the $700,000 principle. Should the interest raise eventually, add a truck load more wasted interest to that amount.

Now I'm not sure what you classify as waste here, personally both is in my opinion, but you can thank negative gearing and the billions contributed by the taxpayer for allowing you to live in a nicer area and place than you may not otherwise afford to buy.
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Old Jan 29th 2016, 8:44 am
  #49  
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Default Re: Reality check

Originally Posted by Moses2013
You also have to take into account that you'll be renting in OZ, while back in Scotland you own a home and are paying off a mortgage. Of course you can rent it out, but you will basically be spending more on rent in Melbourne and will never see that money again. If you find a rental for $1.400 that's $33.600 wasted in 2 years.
I've never really bought this argument. I currently rent, have rented in Oz and owned (outright) in Oz and Korea. We have always invested well and bought/not bought depending on our investment modeling. Sometimes it suits us, sometimes not. Renting is rarely wasted money for us as it's just what we need to do to achieve other things. Where renting is dead money is when you don't have an investment destination but that's not true for all. Our next move will one that determines another purchase, we just need to decide where. ( I think there's a touch of the Nomad in us)
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Old Jan 29th 2016, 8:46 am
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Default Re: Reality check

Originally Posted by rasen78
I do think some of the figures you quoted were on the low side. Foxtel (SKy equivalent) even the cheapest, bog standard pack (which doesn't even have the standard channels like 10, 9 7) is $25. We have Foxtel iQ and multiroom and full package and pay $124 p/mth.
Ouch ..... I'm on the bog standard package and I have all the standard channels. I've gradually reduced my foxtel to $25 per month to keep the strife happy with British channels. They have even thrown in the movies for free after my last conversation with them about the value of their service. I think you need to have a good word with Foxtel and at the same time part with $10 per month for Netflix or Stan.
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Old Jan 29th 2016, 8:53 am
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Default Re: Reality check

But their mortgage in Scotland is not really high at £700 + low interest rate. Of course each case is different, but if they move to Melbourne, rent is wasted money in this case and they'll be paying more than their mortgage.

Financially, it makes more sense to stay in Scotland.


They are still paying the interest on a mortgage and have to find an additional $1.400 for rent?????

Last edited by Moses2013; Jan 29th 2016 at 8:55 am.
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Old Jan 29th 2016, 8:59 am
  #52  
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Default Re: Reality check

Originally Posted by Beoz
Ouch ..... I'm on the bog standard package and I have all the standard channels. I've gradually reduced my foxtel to $25 per month to keep the strife happy with British channels. They have even thrown in the movies for free after my last conversation with them about the value of their service. I think you need to have a good word with Foxtel and at the same time part with $10 per month for Netflix or Stan.
Yes, I need to call them really. ROMFT wants the sports, but with the EPL going to someone else, not sure if it's worth keeping it. Need to look into Netflix. Now we have a decent internet service, with good speeds, it's something to look into, but definitely need to talk to Foxtel first.
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Old Jan 29th 2016, 9:04 am
  #53  
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Default Re: Reality check

Thanks for all the replies, some really good advise in there, this is why I titled the post reality check.

Oz has been a dream for sometime now, and its more for the experience of living in another country and the weather! Ive been to Melboune in Winter and Summer, and yes up Brisbane way is what I really want but visa would be for melbourne initially.

The reason I am so set on figures is that I live to my means, I've experienced debt when I was younger and never again. I have myself in a good position where I would arrive debt free, have a good sum of house equity, and would have £12-15k to see us over the initial arriveal set up.

But it is the bigger picture that scares me the income and living within means.

The only thing keep this going is the amount you get in rebate/benefit as it really helps, I am actually shocked at what you get.

The posts have all be a good wake up, and even with the rebate/benfits etc and Uk income, $78k is going to be a struggle.

We had thought about waiting till 2 are in school but that comes with its own problems, as 1 still actually cant work full time, yeah there are before and after school clubs but i wouldnt want to use these all the time and the school holidays are a big issue with no family support.

I thing I need to re look at salaries as it may just be too much of a struggle.

I dont see a joint income of £55k here as that good, another £5k and I would say things would be more relaxed, not great but better.

$100k is a more realistic sum to make this possible. I think this would be possible in a few years if we made the move now, but its a big risk over the initial few years and a huge cost to make it happen.
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Old Jan 29th 2016, 9:05 am
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Default Re: Reality check

Originally Posted by Moses2013
But their mortgage in Scotland is not really high at £700 + low interest rate. Of course each case is different, but if they move to Melbourne, rent is wasted money in this case and they'll be paying more than their mortgage.

Financially, it makes more sense to stay in Scotland.


They are still paying the interest on a mortgage and have to find an additional $1.400 for rent?????
The renter will be paying the mortgage, and because the UK doesn't have negative gearing rent and mortgages are a lot closer aligned, and if they have had it long enough, they could make positive, which should negate any extra cost and allow them to pay rent.

No matter where they live they pay, and they pay someone else.

As my financial adviser said to me recently "I own 8 investment properties in crap areas yielding good amounts plus tax benefits and use it to rent the house I want to live in" ..... makes perfect sense to me.
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Old Jan 29th 2016, 9:11 am
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Default Re: Reality check

Originally Posted by Moses2013
But their mortgage in Scotland is not really high at £700 + low interest rate. Of course each case is different, but if they move to Melbourne, rent is wasted money in this case and they'll be paying more than their mortgage. Financially, it makes more sense to stay in Scotland. They are still paying the interest on a mortgage and have to find an additional $1.400 for rent?????
Yes, I can see what you are saying here in terms of comparable lifestyles and 'getting ahead'. For the OP it's a catch 22, can't afford to lose the money on rent but a huge gamble to sell up in Glasgow and buy in Melb on that money. I can your pint in the OP's context
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Old Jan 29th 2016, 9:26 am
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Default Re: Reality check

Originally Posted by Beoz
The renter will be paying the mortgage, and because the UK doesn't have negative gearing rent and mortgages are a lot closer aligned, and if they have had it long enough, they could make positive, which should negate any extra cost and allow them to pay rent. No matter where they live they pay, and they pay someone else. As my financial adviser said to me recently "I own 8 investment properties in crap areas yielding good amounts plus tax benefits and use it to rent the house I want to live in" ..... makes perfect sense to me.
You always pay, but if you have a mortgage of £700, you need to calculate the rental income you'll be getting + the rental amount you'll be paying in OZ. The home in Glasgow has a value and you are paying something off, but the value may increase, stay the same, reduce, but it still has a value.

Mortgage is mortgage and rent is rent, so unless the rental income from your home in Glasgow covers the mortgage + the rent you'll be paying in OZ, it doesn't really make sense.


And if it doesn't, you need to be earning that amount more.
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Old Jan 29th 2016, 9:30 am
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Default Re: Reality check

Originally Posted by Moses2013
You always pay, but if you have a mortgage of £700, you need to calculate the rental income you'll be getting + the rental amount you'll be paying in OZ. The home in Glasgow has a value and you are paying something off, but the value may increase, stay the same, reduce, but it still has a value.

Mortgage is mortgage and rent is rent, so unless the rental income from your home in Glasgow covers the mortgage + the rent you'll be paying in OZ, it doesn't really make sense.


And if it doesn't, you need to be earning that amount more.
Hi

Just to add, though maybe not that important. I would look to sell before I moved, if I rented I would be looking at the £1000 p/m rental maybe tad more
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Old Jan 29th 2016, 9:50 am
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Default Re: Reality check

Originally Posted by Moses2013
You always pay, but if you have a mortgage of £700, you need to calculate the rental income you'll be getting + the rental amount you'll be paying in OZ. The home in Glasgow has a value and you are paying something off, but the value may increase, stay the same, reduce, but it still has a value.

Mortgage is mortgage and rent is rent, so unless the rental income from your home in Glasgow covers the mortgage + the rent you'll be paying in OZ, it doesn't really make sense.


And if it doesn't, you need to be earning that amount more.
I think that was just nailed on the head. £300 per month in the positive. Even after costs or fluctuating interest rates doesn't sound to me like there's going to be any payments made back to Glasgow to cover a mortgage. Not sure why you would expect the rent in Glasgow to cover the mortgage + rent. Unless you own a home outright we are all bound by paying for somewhere to live.

Last edited by Beoz; Jan 29th 2016 at 9:53 am.
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Old Jan 29th 2016, 10:13 am
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Default Re: Reality check

Originally Posted by Beoz
I think that was just nailed on the head. £300 per month in the positive. Even after costs or fluctuating interest rates doesn't sound to me like there's going to be any payments made back to Glasgow to cover a mortgage. Not sure why you would expect the rent in Glasgow to cover the mortgage + rent. Unless you own a home outright we are all bound by paying for somewhere to live.
We are talking about finances, so this all has to be considered and currently it does not make financial sense in the long run. Yes, if you think simple and say £1000 = $2000 everything looks great. You need to look a bit deeper.

Anyway, overall I don't think it's a sensible move and others have advised the OP to be careful and I certainly wouldn't sell in the UK until I am 100% settled in OZ.
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Old Jan 29th 2016, 10:32 am
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Default Re: Reality check

Originally Posted by Moses2013
We are talking about finances, so this all has to be considered and currently it does not make financial sense in the long run. Yes, if you think simple and say £1000 = $2000 everything looks great. You need to look a bit deeper.

Anyway, overall I don't think it's a sensible move and others have advised the OP to be careful and I certainly wouldn't sell in the UK until I am 100% settled in OZ.
Who said £1000 = $2000? I would be the last person to assume that. From what understand, you seem to think that the OP would need to top up a UK mortgage, if the OP was to keep the Glasgow property, which is not so and in my opinion it would be the best financial move to keep the Glasgow digs. Stepping foot on the property ladder in many places Oz right now would be madness bearing in mind the vast different one would pay for a mortgage and one would pay in rent. Rent is dirt cheap in Oz in the grand scheme of things.

But I do agree, the OP needs to negotiate a better salary otherwise its the wild west of Melbourne or Brisvegas
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