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to have assumed that a 100k salary in London would mean we would be more comfortable than we are?

(248 Posts)
Baydreams Thu 18-Apr-19 12:08:16

I've been prompted to post this after reading the post about high earners and the two schools of thought that 100k either "isn't that much when you live in London" or "It's a lot compared to the average national salary". That post is here: www.mumsnet.com/Talk/am_i_being_unreasonable/3561649-To-ask-those-who-have-high-earning-partners?

So, the backstory is that we started a family unexpectedly in our early twenties and abruptly adjusted to a household income of £26k, living in London. We stuck to a grocery bill of £40 per week for a family of three, and never spent a penny on small luxuries like coffees, clothes, haircuts, etc. Even so, our household income wasn't enough to cover our mortgage (£800 per month and cheaper than renting), and all the usual bills and outgoings. We slowly sunk into debt just to cover a pretty frugal standard of living. After 5 years, this debt was at £25, so essentially we needed to earn at least 30k to even out our costs.

During the last year of this, my partner landed a higher paying job, and our area of London had had a bit of a boom, meaning we could afford to move our family out of our flat to a 3 bed terrace house in the same area, taking some of the equity to zero our debt.

Over the next years, our household income grew to around £100k, give or take. (My partner has a commission based job so we never quite know what the exact figure is going to be, but it's usually just over or just under 100k).

We live in one of the last remaining affordable areas of London. Our house is valued at £450k. Mortgage repayment is approx £1300 per month. No other huge costs apart from running one family car. We have three children. On a household wage of approx £100k, we can now comfortably pay our mortgage, and live a much happier day to day lifestyle in that I don't feel guilty any more about booking in a haircut or buying a coffee.

We are so relieved to be out of the hole we were in financially, and I don't see £100k in our area of London as a struggle at all - there are many people earning less where we live.

But, I will confess to assuming that it would mean we could afford more than we actually can in reality. For instance, we have found that we aren't able to accrue any meaningful savings - maybe £150 a month which tends to get eaten up very quickly as an 'emergency costs' fund. And holidays abroad are beyond us. We tend to be able to save for one once every three years and the other years we do UK camping holidays.

Previously to earning £100k a year, I did assume that holidays and savings wouldn't be a problem. How do other people with similar earnings and outgoings make it work in terms of saving for luxuries like holidays etc? Do you find you can comfortably afford to save AND go on holiday? Do you substitute one for the other? Do you find it easy enough to live on 100k or do you find it a balancing act to cover everything you would like from your lifestyle?

QuarterMileAtATime Thu 18-Apr-19 12:28:55

Sorry if I missed this, but does a lot go into pensions?

AnnaMagnani Thu 18-Apr-19 12:29:39

Your mortgage is high and you have 3 kids and possibly childcare expenses too.

Plus you likely want to live a nice middle class type lifestyle - coffees, meals out, going out, clothes from particular shops etc etc.

Nope, you aren't going to have much change from £100K in London.

Despite your best attempts to be frugal, you have likely been swept up in the London lifestyle too.

You need a complete financial overhaul - go through MoneySavingExpert.com and do everything it says, changing all accounts, utilities etc. And then be v honest with yourselves - do you go out to free stuff, do you always take coffee in a flask, do you pack lunches, could you buy stuff from the middle of Lidl instead of a nice brand name for camping and so on.

And then you'll find you can save a bit after all.

BarbaraofSevillle Thu 18-Apr-19 12:29:42

For instance, we have found that we aren't able to accrue any meaningful savings - maybe £150 a month which tends to get eaten up very quickly as an 'emergency costs' fund

You need to look at things differently. I'll bet a lot of the 'emergencies' are normal routine spending that you should be including in your budget. Like Christmas, car repairs, insurances, broken washing machine etc. You should expect these expenses to crop up sooner or later so regard some of your savings as earmarked for those, in addition to savings for the longer term.

But if your income is around £5.5k, and you have close to £3.5k after mortgage and childcare, even if you spend £2k on food, travel, utilties etc, that should leave £1.5k to save each month, which should easily be plenty to save up £300 pm out of that to pay for a week in Europe each year.

How much are you spending on food, both on groceries and eating out, lunches, coffees etc. That can be enormously expensive if you buy lunch out a lot, and don't really watch the grocery budget. Nearly all the people on Eat Well for Less were there because they couldn't afford a holiday, but were spending £1000 pm or more on food.

Baydreams Thu 18-Apr-19 12:30:19

@LaurieMarlow childcare seems to be a fair bit cheaper in our area of London. £40 per day (8-6). Currently 2 days per week so around £320 per month. Will soon be entitled to the 15 free hours so that will half the cost.

desparate4sleep Thu 18-Apr-19 12:30:26

Do you mean £300 a week in childcare not month? do you have huge travel expenses?? I don't understand where your money is going.

Babuchak Thu 18-Apr-19 12:31:36

ignore the competitive misery that your post will attract, some posters cannot comprehend that someone might have a slightly different life hmm which is stupid, when you look at property prices in London, it's bloody obvious not everyone survives on pennies-

First, you are not taking 100k, after tax it's a hell of lot less!
You are losing any help other people receive, so you usually end up with less disposable cash. It's a myth that earning more gives you more - people are too quick to forget all their tax credit, child benefits and so on.

Start a spreadsheet and track ALL your expenses to the penny.
you will quickly see if you have started being a bit too generous with a coffee here, a more expensive tshirt for DS there and so on and you will see where you money actually goes.

I know some posters cannot comprehend that, but 100k on 1 salary in London is not a lot. You'd be better off with 2 adults earning 49.5k each for a start.

MyDcAreMarvel Thu 18-Apr-19 12:32:05

Op you haven’t answered the question? What are you spending your spare £3k on?

f83mx Thu 18-Apr-19 12:32:26

History dweeb- Phone hmrc and explain re taxing on second job, you shouldn’t pay any tax and will be due a rebate

IceRebel Thu 18-Apr-19 12:34:22

£40 per day (8-6)

It's not even that cheap up North confused

If the little one is in childcare 2 days a week where are they the other 3? Also what about childcare expenses for the older 2? After school care or clubs etc?

Your figures really aren't making any sense. Unless there's a huge area of expenditure you haven't mentioned you should have loads left, even taking into account some little luxuries.

Baydreams Thu 18-Apr-19 12:35:14

"How much are you spending on food, both on groceries and eating out, lunches, coffees etc. That can be enormously expensive if you buy lunch out a lot, and don't really watch the grocery budget. Nearly all the people on Eat Well for Less were there because they couldn't afford a holiday, but were spending £1000 pm or more on food."

@barbaraoofSEville that is an interesting stat. I will admit that there were a definitely a few years where we didn't watch these expenses too much and just enjoyed life after years of not having the money. We should have continued to watch our budget more carefully, and have been doing so since the beginning of this year. Our outgoings on eating out etc aren't too high, but we do enjoy nice food and wine at home.

Riversguidebook Thu 18-Apr-19 12:37:52

I earn £136 a week.
This post is about as far removed from my reality as I can ever imagine.

I’ve got nothing helpful to say though !

grin

HeadsDownThumbsUpEveryone Thu 18-Apr-19 12:38:33

Our outgoings on eating out etc aren't too high, but we do enjoy nice food and wine at home.

That doesn't explain why you are missing about £3k of your husbands monthly take home pay?

£40 per day (8-6).

That's £4 an hour shock! That cannot be right?

adaline Thu 18-Apr-19 12:39:18

What are you spending the rest of your money on? We survive between us on less than 30k a year and have plenty of spare cash to go out with - although our mortgage is admittedly much, much lower than yours.

RosaWaiting Thu 18-Apr-19 12:39:56

if you can't save more on that, I have a feeling you are taking a lot of posh stuff for granted.

SpaceCadet4000 Thu 18-Apr-19 12:40:27

If I'm honest, it sounds like you need to really examine where your money is going. Even with 3 kids, the gulf between your take home and only being able to save £150 is huge.

There are quite a few budgeting and tracking apps that you can connect your cards to and categorise your spending. Might be worth doing for a few months to get a handle on things. I used to use Money Dashboard and would definitely recommend it. It really opened my eyes to the collective costs of things like coffees, takeaways, extra trips to the shops etc.

bridgetreilly Thu 18-Apr-19 12:43:02

Yes, do a proper budget. You should definitely be able to save a significant amount on that salary.

Baydreams Thu 18-Apr-19 12:45:51

@icerebel I work part time so youngest is with me the other days.

We do have more monthly costs (thought it would be a bit too much to list everything!) like car payment £300, after school club £50, internet / phone / TV £80 (recently cancelled our TV service as we never use it, but still spend on Netflix and Now TV), plus council tax, utilities etc.

We did a budget spreadsheet recently and long story short total outgoings are £2900. Household earnings for the past year have been around 86k. Partner is the main earner, my earnings are usually under £10k. So higher rate tax payer, no child benefit.

fruitbrewhaha Thu 18-Apr-19 12:46:11

As said upthread you need to do a budget. Write down all your outgoings. Are you payment monthly for a car? car insurance, life insurance, pension, Travel cards, mobile phones.

The for a week or so write down everything you spend. maybe you are blowing cash on crap you could do without.

Are you doing a weekly shop and then lots of top ups? Take aways.

Then make a family decision. Shall we change to a cheaper car and stop buying coffees in order to have a holiday. Take in pack lunch?

BunnyBob Thu 18-Apr-19 12:47:12

We have a similar income to you OP but live 'up north'. Our mortgage is a bit less than yours and we only have one child. We don't feel rich- we are very comfortable though and manage to go abroad each year and have nice clothes/toiletries, meals out, car etc. We don't live a luxury lifestyle though and don't save that much extra each month. We couldn't rush out and buy a new car with cash, or book a high-end holiday - you still need to budget at this income.

AnnaMagnani Thu 18-Apr-19 12:47:16

If you enjoy nice food and wine at home, how do you do it?

Have you got into the pattern of thinking that 'nice food' is anything with a 'Finest' label on or a fancy brand from Waitrose.

Because this is an easy trap to do - as a PP says, this is frequent one on foodie episodes of Eat Well for Less. You can just as easily have nice food and wine at home, buying the lot from Aldi/Lidl if you know how to cook properly rather than dishing out for things with nice labels on.

I sadly know this because I've been there - single, in London and wondering why I didn't have as much money as I thought I should have despite having a good salary. Eventually it dawned that travel + mortgage costs were high, and the London office lifestyle was eating out at Pret everyday for lunch, buying several coffees, going out, buying more clothes than I had bought pre-London. It all stacked up. London is full of ways to subtley make you keep up with the Jones without realising it.

RosaWaiting Thu 18-Apr-19 12:49:23

also OP, I'm wondering how you thought this level of income would be different for a 5 person family? What are you missing that you thought you'd have, for example.

Babuchak Thu 18-Apr-19 12:50:58

I think it's the myth you can read on MN, how people on 100k a year are "rich", can afford massive houses, holidays and have a life of luxury.

It's so far from the real world, but some people might actually believe that nonsense.

Whatthefoxgoingon Thu 18-Apr-19 12:51:53

Outgoings of £2900 per month, call it £3000 so £36000 per year.

Is your net income £86000?

Where is the other £50,000 then?

Sorry, but you must be vastly underestimating your expenses if you don’t have decent savings/can’t afford a holiday.

Whatthefoxgoingon Thu 18-Apr-19 12:54:17

I say this as someone who once had your income in London, homeowner with kids. We still managed to save and invest.

adaline Thu 18-Apr-19 12:54:28

If you're "only" spending £2900 a month, where is the rest of your money going?

I suspect you're frittering away huge amounts without really realising it.

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