In our How I Manage My Money series we aim to find out how people in the UK are spending, saving and investing money to meet their costs and achieve their goals.
This week we speak to Matthew Griffiths, 36, who lives in Seven Dials, Brighton, with his wife, Nicole, 35, and their two daughters, Olive, three, and Summer, one. Matthew is the founder and chief executive of Wealthy Parent Guide. He used to earn a six-figure annual salary but found himself struggling financially amid high childcare and mortgage costs. He thinks the childcare tax trap disincentivises people from having more children or going back to work after having children.
Monthly budget
Our monthly income: My wife and I started our business, Wealthy Parent Guide, together. Most of the money we make goes back into our business. We each take a salary of around £800 a month and top it up with dividends. In total, our income is about £36,000 a year each.
We also have two rental properties on the seafront in Brighton, which we manage but do not own. We make a profit of around £20,000 a year for the two. We also receive £173 in child benefit each month.
Our monthly household outgoings: Mortgage, £3,220; council tax, £238; groceries, £550; gas and electric, £255; water, £114; home repairs, approximately £150; broadband and mobile, £55; childcare costs, around £400 to £500; money into savings and investments, zero at present; money into pensions via business, about £44 a month each. We don’t spend much money on things like eating out or clothes.
We sold our car to bootstrap the business. Instead, we used Enterprise cars, spending about £70 a month on them. I work six or seven days a week, so hobbies have gone out of the window.
I used to have well-paid jobs in product leadership. If someone wanted to raise money for a start-up, they would hire me to hire a team to build the product and attain a certain revenue target. I’d reach the target and then move on to the next project. The pay in my last full-time role was £125,000 a year, with an equity stake on top.
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The pressure was high and I once worked for 28 days straight. I’d often go home at 3am, get a bit of sleep and then head back to the office a few hours later. It was very stressful.
We were both earning decent money, but our childcare costs were extortionate. For our eldest, they came in at £19,200 a year for 50 hours a week. When we were having our second child, we realised we would be looking down the barrel at close to £40,000 for childcare costs every year.
I looked around for jobs offering slightly higher pay, at around £140,000 a year. But once we did the maths, we realised it just wouldn’t all add up. We’d still be left with little at the end of the month. My career no longer made financial sense. We started having to cut out international holidays and adding money to savings stopped.
The hardest thing for me was that when my children came along, suddenly I was struggling to provide for my family. I felt ashamed as a result. My career was on fire and chaotic, but our financial situation wasn’t good and both my parents were ill at the time. It started to feel as if the world was closing in on me.
We started thinking seriously about moving abroad as the cost of living in the UK had become so high. As a couple, we used to pay about £10,000 in income tax a month, yet we were struggling. We were paying a lot into the system, but had no help with childcare costs ourselves.
The childcare tax-trap is anti-family and discourages people having more children. It is also anti-work as it often makes no sense for people to go back to work when childcare costs are so high.
A father I spoke to recently told me he was intentionally underperforming at work and not doing more deals in order to keep his pay under a certain level. People turn down promotions due to the childcare tax trap. This is all bad for the economy. There is a real human element to all of this which is often ignored.
Eligibility for help with childcare costs should be based on household income, rather than an individual’s income. The threshold should also be higher than it is now. Childcare should be treated in the same way as schools and viewed as part of the national infrastructure.
I’d always wanted my own start-up. I left university in my first year to work on a start-up and immediately began to make good money. I’d never really had to worry about money until we had children. I quit my career in product leadership in the first quarter of 2024 to focus on my own start-up, Wealthy Parent Guide.
The app shows people how to create the best strategies for their childcare planning and finances. We aim to help higher-earning parents have more money in their pockets at the end of each month. My wife and I now both earn considerably less than we used to, but the business is a long-term project.
Given we’ve taken a risk with Wealthy Parent Guide and quit our jobs, most of the money we make is going back into the business. We are not adding money to savings or investments. I have about £60,000 in old work pensions.
We bought our four-bedroom house in March 2021 for £657,000, helped by the sale of my flat which I purchased when I was 25. Our mortgage used to be just over £2,000 a month but is now £3,200 a month. Our mortgage went up after Liz Truss’s mini-Budget caused a spike in interest rates. The impact this had on our finances was huge. I felt like I was sinking. We had to rent one of the rooms in our house to keep things going.
I am now working my socks off and taking big risks with Wealthy Parent Guide. It’s all I think about from the moment I get up to going to sleep. I intend to create very valuable businesses to ensure I do not have to worry about money in later life.
In terms of how motivated I am by money, this is a difficult question. I grew up with parents who valued the American dream and I was influenced by that.
However, I have previously made career moves solely driven by money which I have later regretted.
I’m now much more cautious about any decisions I make which may be driven by money. While I am now taking home less each month, I am working on something I am extremely passionate about. I’d just like a few little luxuries back, like holidays abroad and a car.
Taking into account the way our tax system works, I actually do not want to earn more money at present. You end up just getting robbed by the Government, and our money is being wasted on a grand scale. Taxpayer money is not being invested wisely.
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