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Should I feel richer than I do with a family income of nearly 100k?(158 Posts)
Very conscious that this could come across very badly but I'm prepared for frank responses. I realise I'm very fortunate. Dh and I both have good jobs and are able to afford a house and all our bills comfortably. I definitely do not take that for granted.
I am just trying to make some decisions that hasve financial implicationsx and I'm trying to get a feel for what kind of lifestyle is realistic on our salaries. I used to feel quite well off really, but both our pay has been frozen for years now (public sector) and our expenses have gone up.
We earn just under 100k between us, roughly evenly split. Our mortgage is 1500 a month (London) and childcare is about 650 per month, with extra in the holidays (but will go up to about 750 a month soon when I run out of the excess annual leave I am using at the moment). Commuting is about 200 per month. I have no savings as I just spent them on building works but would generally aim to have 5-10k.
My instinct is I can afford to upgrade the car to a slightly newer and greener but not fancy one - like a ford focus 3 years old, but not a brand new one, that i can afford one European plus one UK holiday a year, but not skiing or long haul, that I can afford 2 hours cleaning a week but not a nanny, that I can afford music and swimming lessons but not private school.
Does that sound about right or must I be frittering my money away somewhere not to have more left over? I don't feel I do, except on nice food and wine. I don't buy expensive clothes for me or the DC, for example, and generally favour second hand. Most people I went to uni with seem to afford these things easily and have bigger mortgages than me, but I assume they earn a lot more in the private sector and i know they get significant bonuses every year.
I'm not moaning. I like my job and deliberately turned my back on a more lucrative career path, but I feel like I've been beating myself up a bit that my life seems more chaotic than theirs, and my house and general appearance much scruffier and am trying to work out if I could afford more help, or if actually i am comparing my life with people weith considerably more disposable income than me.
No idea if this makes any sense but all comments welcome.
I would say that while 100k is alot of money, it sounds like you have a fairly young family and London is a very expensive place to live and leisure, so i think your sums are about right tbh.
What I would say very gently, is that comparison is the thief of joy - if you're not content, would it be worth looking deeper into why?
So what's your take Home pay per month between you? 5k? 6k?
So you'd spend just over 2.3k a month on mortgage, childcare and commuting.
So that should leave well over 2k, maybe 3k for other bills and food, clothes, etc. That should be enough to live off even in London and to be able to save as well.
Also Ime people who seem to be able to afford holidays, cars, etc easily may often be putting them on credit cards.
I think your sums are about right, but I hear the tyranny of the shoulds all over your post. Are you happy? Is your family well? Do have what you need and can you work towards some of the important things you want?
Things like the car- is that important to you, or are you looking at what others have?
I think you should keep a spending diary for a month and you'll see. Otherwise its impossible to say since your bills will make all the difference - council tax, electricity, gas, children's activities, food etc etc.
I don't think £100k is a massive amount, it's about £72k net assuming no pension contribution and other deductions.
I think you need to have a savings pot and contribute to pension. How many dc do you have?
I think we look like we're just plodding through, only recently bought a 9 year old car, nice house but only 2 bed in an 'up and coming' area (this always makes me laugh!) but we have significant savings and pension and take a longhaul every 2 years and holiday in Europe every year.
I look like l have no money but we do. I just hate it being about that. I could afford a cleaner but it takes me less than an hour to have it sparkling!
I think that sounds about right, we earn more but have a bigger mortgage and bills, hobbies, shopping etc soon add up.
That said, whilst I don't feel rich, I never have to worry if we can afford something as mostly we can (except big purchases) and actually I think these days that is a sign of being rich - or very comfortable at least.
I too buy most of my clothes on the high street, we don't pay for private but do pay for riding, music lessons, tutor etc. I think it's about spending priorities as well (and also private schools increasingly becoming for very rich or huge lifestyle compromises to be made).
presumably you have good pensions if you're public sector.
Watching with interest. Our London salaries are ok ( public sector), we have no debt apart from mortgage. Our house is smaller than those of our friends which does niggle and I know I need to stop comparing. Being in the public sector means we earn less but our hours are good ( I work school hours so can do school pick ups, DH is home for preschoolers bath time every night).
I look at my friends with big houses and assume they are working long hours to afford them. DH works such family friendly hours and I love that he does school pick up one day a week. Must let go of envy and appreciate what I have.
Excuse massive self indulgent hijack. Your op struck a nerve, clearly!
As you were.
I think its your outgoings- a big mortgage and child care that are preventing your money from stretching
London is a very expensive city. Myself and dh bring home a similar amount but have s mortgage of 500, don't pay childcare, shop in lidl, don't really drink much, don't want a cleaner.
We managed to save a substantial deposit for our house - hence very small mortgage.
It all depends what you want
Thanks all. I maybe gave the wrong impression. I'm not unhappy. I feel lucky we have financial security and can pay for the lessons and holidays that we do have. The things I'd change if we had more money are minor, really, and would be mostly aimed at a smoother running life, rather than more stuff.
The main reason for wanting a new car is it is diesel and I feel awful driving it knowing what I now know about emissions, but I'm well aware I could just ditch it altogether. Private school I'm not sure I'd pay for even if we could, but I didn't mention that as I probably would pay to move catchment areas if i thought it was needed, which I'm aware may seem hypocritical.
I just feel like life is a tad chaotic at the moment. The house is a constant pigsty and I am feeling pressured at work because ii have to leave early to do holidasy club runs etc. I was beating myself up a bit about that but may cut myself some slack if I'm actually doing OK with what we have available.
We have a similar joint income in London with one child, although DH earns a lot more than me so we probably end up being taxed more as a couple. We both also contribute significantly to pensions so our take home isn't so high. We try to maintain accessible savings of at least £20k, usually more. However we have no childcare costs and we don't run a car as our flat is very central (our mortgage is £1900 though). We don't have a cleaner and we buy decent quality clothes new but not that often and often in sample sales etc. We can comfortably afford a long haul holiday once a year, plus a few UK short breaks and we eat out a lot, and spend a lot on activities and extracurricular stuff. I do shop in Lidl and we aren't big drinkers, and I don't spend loads on beauty treatments. Neither of us have gym memberships. We haven't really looked at private school as our local school is good, but I think it would be doable if we cut back.
We are both private sector but our hours are fairly good and DH doesn't work late and can get time off fairly easily, and we don't pay anything for our commutes as I get a free travelcard and DH can cycle to work.
1500 = mortgage
commuting = 200
childcare = 650
total of those = 2350
Net Income = 5000- 6000 per month
yeah, yeah, bit of a discrepancy. So where is it going?
I think your outgoings are quite low. Dh and I have a joint income of 55k. Mortgage is 1200, childcare minimum 1000 a month.
It sounds like you have a nice life and maybe could afford to save a bit?
I quite liked your post I have similar feelings about affordability in similar salary. We live in the north and inherited so we are nearly paid off on our mortgage but not yet! So not got any money left over. Our nursery costs are more than yours 4 days a week. It's quite expensive in my city but thought London worse.
We tend to do 2 holidays abroad a year but get family help with them.
Not driving fancy cars, old but solid. Would rather put more money into the house.
I fritter money on clothes, meals out, nice food. Then feel guilty.
I am 38 and my friends are only just starting to get 4 bed detached houses. We still have 4 bed (large) semi in a so-so area. I keep thinking I want to trade up. It's so easy to get sucked in isn't it?! It's not like you need extra space really. You just think oh I want a big house. Need to be strong. Be glad ft hat we've got, save for the kids future, retirement and good holidays. That's the hope.
The more money you have, the more likely you are to spend on boring things like insurance, pensions, dental care, house maintenance. It's easy to spend a lot of money on things that improve your life quality, but that don't make you feel rich.
Sounds about right to me too. In my world that's a huge mortgage and the childcare is a big commitment.
Having worked in banking with high end customers, I know never to be impressed by a fancy lifestyle. IME at least 70% of the time it's financed by debt that they can't afford. People who are genuinely well off are often embarrassed or don't feel the need to flaunt it.
The things that make you much better off than those on an average lifestyle are much less tangible, The fact that you(probably) have savings so the washing machine packing up isn't a disaster, that you can afford wine without it feeling like a huge extravagance, being able to buy school shoes without saving specifically for them etc. And yes, as PP said you probably have lots of monthly outgoings (insurance, pension,savings plan) that seem like sensible essentials to you but would be out of the reach of people on more modest incomes
Savings I mentioned only in passing because I'm not sure what I've budgeted for that. We do have public sector pensions but we contribute to them. I only just went back to work after 2nd maternity leave and we are currently forking out for a loft extension so I haven't quite got to grips with how much money we actually have day to day, iyswim - hence my thread. I am not necessarily bemoaning my lot, just trying to work out where I stand in terms of what i can afford to borrow to finish and furnish the loft and whether to upgrade the car and what to (if I was to invest more it'd be for electric or hybrid, not a Porsche), and whether I could afford a part time nanny to do nursery runs if I go for the option of school hours nursery etc etc. I realise I probably need a budget, but I know I can afford the essentials so it'd be an odd sort of budget..
Before going on maternity leave my childcare costs were down to below what I have in childcare vouchers so I was saving a few hundred quid a month on average, but I was saving for the loft works and maternity leave. We also did in fact have a million household expenses recently - the aforementioned broken washing machine plus 1000 quid plumbing bill, as well as significant car repairs etc. They did not break us, and for that i know i am fortunate - i said so in my op. I am not planning on never having any money in the bank but this is our most expensive couple of years in terms of childcare and building works. We have a lot of equity in the house that I could exploit for uni fees, but we are hoping to save for those.
I think my outgoings are relatively low really and can't realistically be reduced. We were lucky/unlucky to inherit 50k which got us on the housing ladder quite young. It reflects a debt of 270k which you will be aware doesn't go far in London but we have a terraced house with small garden in an area that isn't the swankiest but I love. Commuting costs are low as it's zone 2. Childcare is 2 days a week nursery and after school club (oops i may have left out breakfast club so that might be a slight underestimate) as we have 1 day of family help and are using reduced/compressed hours/annual leave to cover the rest (this will need to change soon either by reducing hours or increasing childcare).
I know I could make savings my ditching the car, only ever making packed lunches and giving up wine etc. But those aren't going to make my life easier or more enjoyable right now and wouldn't help me afford a nanny/housekeeper. If that's what's necessary to ever have any savings I guess I'll have to, but I suppose the other way if phrasing my op is "aibu to think that once my immediate expenses settle down I'll be OK maintaining my current lifestyle if I don't go mad on nannies and skiing holidays?"
However much money you earn, the only way you can answer this question is with a budget. We all have different goals and outgoings and the situation will change from year to year.
Get to MoneySavingexpert.com - specifically the mortgage free wannabe board.
We pay ourselves the same as another family we know very well. We manage to live really well on that money - they don't and always seem to be borrowing off people, down to their last penny etc. I'm sure it's because I use you need a budget (google it, it revolutionised my life) and account for every penny.
We spend less than 2k a month (no mortgage and not London) that includes £500 of childcare and £100 on a cleaner. That gives us a pretty nice life. To be fair, kids are preschool and it doesn't include pensions or savings but you have a lot more after your bills are paid!
There is no "should" think or feel.
If you should do anything, it is stop beating yourself up! London is expensive and it sounds as if you are doing great.
How does your DH feel? If you are both unhappy, it could be time for a change. If you have the money to pay for lunch, then packed lunches are a false economy, or even a nice-to-have, depending on how bored you are of the dining options where you work. Wine, well, depends how much you drink and in what circumstances, I would think.
Regarding the car, some people are attached to their cars, but not everybody is. A number of city-dwellers I know do not run a car at all and use a combination of TfL, Uber, ZipCar, National Rail...if your DC are still in car seats and unable to cart their own crap around then this probably will not work so well, but it may save you financial angst in the future. By my reckoning it works out about the same or cheaper per month, and loses you all the responsibility and status anxiety that comes with running a car at all. Most Uber are Prius, for what little it's worth, and if you live in Zone 2, then "the Uber is here" is as good a reason as any for actually getting out of the door.
Yes, I keep banging on about the car precisely because I was thinking that very thing, erinaceus. I'd be totally up for a car share scheme, as I don't use it that much but weould miss it when I have loads of stuff to transport, and was wondering about zipcar but you hit the nail on the head with the car seats. Pita! So I decided maybe that's one for a couple of years down the line, but in the meantime do I carry on driving the skanky diesel, or is that morally wrong if I can afford to upgrade?
Dh is in the same boat pay-freeze wise and feels a bit undervalued at work, I think. Perhaps it's this rather than material jealousy that's at the heart of things, though he does keep commenting on the sheer gulf between our modest house and those of quite a lot of people we know (somehow we seem to have found ourselves the poor relations at school too, though its a normal state primary and its not Hampstead or anything). I think he'd go for upgrading the house rather than nanny/cleaner (we don't need more space, but ditching the two railway lines and light industrial yard would be nice but I think we need to wait and consider secondary catchments if we are ever going to move).
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