High earners - how do you spend your salary?

I no longer work "officially", but my DH brings in just shy of £1m per annum (after tax) but topped up with some additional income of mine, it brings it to just over the full £1m...

Half of that goes straight to our investments & savings, then the rest is all lifestyle expenses, (which we break up into wants and needs).

Household takes half of what's left = £250k (mortgage, running costs & groceries etc)

Then £125k to all other must pay, reacuring costs (like school fees, memberships & subscriptions, cars, allowances etc)

£62.5k to discretionary spending and £62.5k to 4 overseas holidays throughout the year and 4 weekends away...

As you can see, we're very conservative and live way below our means, we could spend a lot more, (better house/more fun etc) but we just choose to be simple & wait for the proof of growth.

We're in a very fortunate position indeed, that's not taken for granted, but our goal is to sustain such an income standard passively (which we should be able to, after a decade or so), hence the rather heavy investment...

Hope this helps and the openness is appreciated xx

P.S. For those wondering, he's in finance, I was in law :)

😂😂😂😂

It's a universal payment of €140 a month for each child, it isn't means tested here so everyone is eligible regardless of income.

Not a massively high earner, but do well enough as a singleton without kids.

• Overpay mortgage
• Put extra into pension every month
• Save & invest a percentage of income
• Spend extra on nice foods and snacks
• Spend on sports equipment and other hobbies
• Buy art
• Spend on quality homeware (if and when I need to replace anything)
• Spend on DIY and tradesmen and maintain the house to a good standard
• Spend on shoes 🙈I have quite a few expensive pairs (to me)

Those are my priorities ... I do not spend on cars (it's not flashy and I do a lot of the work myself) or clothes (very often - I buy little and infrequently, mostly because I'm at capacity with a one in one out system! I don't want a packed wardrobe, I have enough clothes now)

Do not spend a huge amount on holidays - usually go for bargains but I do enjoy festivals, concerts, gigs, and days out and those add up!

I am single so life is more expensive. I pay 15 percent of my income into a pension a total of 30 per cent, £1000 into an investment account, £1500 mortgage, say 1000 on bills, food, small treats. That leaves £1000 to spend on trips and clothes and other things.

We save half of our income which goes into a mix of pensions and investments

Then we spend the rest on living in a resonably nice apartment in a good location, eating good food, and travel inc. taking unpaid leave, buying a campervan and a hoilday home outright.

We also pay for anything out parents need and for them to visit us

How do you still get child benefit or is it not means tested in Ireland? My husband and I earn around £120k and had to opt out of child benefits.

We have 2 toddlers, a nanny because the nursery hours didn't cover my job, between that and the mortgage there's not much left each month currently.

We don't allocate our money as well as we should, I do intend to sit down and make a proper plan but life goes by fast as working parents with a toddler. This thread has inspired me to get a move on with it though.

We earn around €178k combined if you include bonuses and RSU shares (living in Ireland). There's also €1680 a year that we get from child benefit.

Husband puts 15% in to his pension in addition to employer 10% contribution and I put in 6% to AVC's but I also have a public service pension.
5% goes into company shares (ESPP scheme).
We put €200 a month in to an investment trust for our son's future.

Mostly we're just saving to upsize our home, saving roughly €2k a month now. I hate debt so I'd like to have as big a deposit as possible, hoping to have 200k deposit and buy in the 550k range. Not overpaying on our mortgage currently, I'm undecided on whether we should restart overpayments or not when we'll be selling up in the next year or two anyway.

I'd like to invest more, contribute more to my pension and overpay the mortgage but it's all kind of on hold until we get our forever home. No intentions of paying for private school, I'd rather build wealth and private schools aren't a big thing here like they are in UK, but we will be choosing our new home based on how good local schools are.

Combined income around 220k euro . Good pensions , mortgage just paid off . Spend it all on holidays - skiing , theme parks , Ikos etc.
Old cars, nice house in good area but not huge.
I should perhaps be more sensible but kids have house deposits from lovely grandparents . Life is for living .

Mortgage and nursery.

Zombie

If I'd known I would be in the Daily Mail I would have ensured there were no typos in my quoted post...... Ah well.
What people regard as priorities is always interesting. For me it was always having a lot of children and then educating and housing them and paying off mortgage debt (repaid mine entirely this week for the last time).

If people aren't interested they have no need to click on the thread. It is perfectly clear what the thread is about.

So why are you on this thread?

scroll. On. By

:)

@dillydally24 sorry, I took it that you were talking about this year with the increased taper.

Biggest expense is mortgage, followed by schooling and childcare. For 2 DC it’s…

• School fees £32k
• Uniform & school shoes £2k
• After school care (term time 34 weeks) £8.5k
• Holiday clubs (14 weeks of 18 weeks school hols) £7k

So £49.5k a year from net income.

Then there’s the weekly activities…coding, multi-sports, Tae Kwan Do, gymnastics. No idea what we spend on their everyday clothes, trainers, coats etc per year. Birthday parties must be another notable outgoing, as they’ve had 3 this weekend!! They eat a ton of food too… no one told me kids would be this expensive. Recently bought second fridge 😂

After that I think holidays, insurances, commuting, car expenses, eating out, cleaner, gardener, outings, haircuts etc. I’ve never worked out the total. Actually, I don’t want to work out the total!!

You might be better off putting your premium
bond money in a low coupon short-term Gilt. Gilts issued during Covid when interest rates were super low (0.25%) now have a yield to maturity of up to 4%. As only the coupon rate is taxable, the yield you earn from buying at a discount (which is all but 0.25% of the 4%) is tax free, so it's a great way to save if you're a higher or additional rate tax payer. It's equivalent to earning an 8% pre-tax return on cash in a savings account. Maybe worth exploring with your financial advisor.

We each put £20k into our ISAs, which gets you to £40k. As we are very high earners, we are subject to the taper on annual pension contributions and can only add £4k per annum to our pension funds. This gets you to £48k. We will be able to add £60k in the 2023/2024 tax year as the limit on annual pension contributions is rising to £10k.

It's >£40k per annum for a top London day school and I have three DC.

We don’t earn quite as much as that but we have a decent chunk of money in premium bonds as savings. My entire salary goes on school fees x 3 and music tuition. Rest of money goes on paying off mortgage as soon as we can. We don’t spend extravagantly on holidays or cars etc. We don’t exactly penny pinch but we are aware that things could change dramatically and want to have a decent buffer to be able to pay mortgage and school fees so children aren’t affected. We did also invest in a rental property that’s meant as a pension investment but we could sell if necessary.

@Richteabiscuitlover

My husband and I both max. out our annual ISA and pension allowances too - this costs us £48k every year.

You can put £40k into ISAs alone between you, so a bit confused by that figure.

What school costs £130k a year?!? Even Eton isn’t that much and that’s one of the highest in the uk.

DH and I are both additional rate tax payers with a gross annual income of c. £1.2m. We have 3 DC and our monthly outgoings are about £20k per month. £10k goes on our mortgage (we live in London and recently bought a £4.5m "forever home"), £3k on nursery/school fees, £3k on a live-in nanny (2 of our DC are pre-schoolers and 1 attends nursery but only in the morning), the rest goes on food, bills (inc. hefty income protection and life insurance policies) and discretionary spending. We don't spend much (if anything) on "luxury" items. My husband and I go out for dinner about 3-4 times a month, but usually choose a local restaurant over anything fancy. We wear nice clothes but nothing designer. I'd rather have a simple handbag with no obvious branding costing max. £500 than a Chanel handbag. I spend a fair amount on the kids - clothes, toys plus museum/zoo/aquarium/theatre trips - but I don't go crazy (eg I would never spend £80 on a pair of kids' Veja trainers - they wear Clarke's). Spending £20k a month leaves us with about £360k of post-tax income which is excess. We spend the excess on one big holiday a year - usually 10 days in a high-end resort somewhere sunny - which costs around £15-20k depending on where we go; collecting art/antiquities - we spend about £10-£20k a year buying art, ceramics etc; making charitable donations - about £10k a year; buying wine - we have a cellar with a leading wine merchant and invest £10-£20k a year in en primeur wine (this is really a form of saving as we plan to hold it for the next 20-30 years then sell it rather than drink it... although we may end up drinking it 😂); the rest goes into savings. My kids all have their own ISA and pension funds and have done since birth. It costs nearly £36k to put the max. allowable amount in every year. The plan is for these savings to pay for the kids' tertiary education and/or a first home. My husband and I both max. out our annual ISA and pension allowances too - this costs us £48k every year. The rest is put into taxable savings accounts. I manage all the finances and ensure our savings are invested with an appropriate amount of risk. We would never leave our money in cash (beyond a £400k "buffer") because its value gets eroded by inflation. If I have a vice, then I would say I spend too much money on art (but our art collection is now quite valuable with some of it having increased 10x in value since we bought it, so that pays for itself). I also use Deliveroo too frequently! I expect our savings rate will go down over the coming years as our youngest DC start at private school. Then a very significant proportion of our income will be spend on private school fees - about £75-£80k a year while they are at prep school and up to £120-130k a year if they go on to attend a private London day school. Hope this is helpful and/or interesting.

I’ve never given it any thought what high earners spend their money on, it’s seems a strange thing to think about really. It’s usually the same stuff anyway - big mortgage, cars, school, holidays, high end supermarkets (or food halls). I mean there’s only so much you can spend your money on anyway.

We save a lot of ours as are about to move house. Since I went back to work and we became “high earners” we seem to have (or take on) odd jobs each month that prevent us having loads left over though - doing a bit to the house, replacing the car, boiler broke!

Private pension, I do treat myself to the odd nice new item of clothing and toiletries but also get most off Vinted or cheaper skincare brands.. we eat out once or twice a week and so maybe 2 holidays a year. We also have private health insurance (we are both freelance so income replies in good health!) life insurance etc.