To Q why many high earners still live paycheque to paycheque?

Dh and I each earn £100k gross. We both pay into pensions and after tax we each get about £4k so total £8k. Our mortgage on apartment is £2.5k per month, we overpay by another £1.5k. £1k on car loan. £2k on nursery in London. Other dc goes to state school. £1k for bills and food. Absolutely zilch leftover.

u can say why overpay into mortgage? Cos the interest rates suck now and want to reduce the impact when we remortgage. Why pay so much into pensions? Cos the tax system is punitive in this country and does not incentivise hard work for middle class people. No holidays at all. Really stuck in a vicious cycle. We may hv been better off if we didn’t work and were on benefits!

Because when a poor person says they have no money left they mean they literally have zero in all bank accounts when a rich person says it their not counting savings accounts

@Bringautumnnights

I understand what you're saying but I think if I was genuinely living from one month to the next and heard you say that I'd feel like it wasn't really an accurate representation of what was happening?

I technically usually end up with the same amount, ish, in my current account at the end of the month as the beginning, but as that involves saving over 40% of my income in one way or another, I would never describe myself as living "paycheck to paycheck".

You'd be surprised. See above about net you get from 100k and then add mortgage and childcare

100k is seen as some magical figure but as a pp pointed out it's 5k ish a month.

Commuting into London from where we live is £40 a day with parking, house prices are obscene so mortgage costs are v. high add in a child at nursery or school fees and it's all gone.

I think for some people they have an expectation of what lifestyle that sort of salary should provide and so they try to live it, without recognising that they probably need £300k to live the life that £100k bought 10 years ago. Not sensible but somewhat understandable

They have huge mortgages and live beyond their means using credit cards.

That’s a good phrase for it.

I think it's called "living within your means". So if you earn 25k, then you live within that, if you earn 125k then you live within that. Everything is relative depending on your income and outgoings...

DH and I are reasonably high earners, him £70k and me £60k, plus £20k bonus that goes straight to savings and holidays.

Our mortgage, commuting and childcare wipes out a lot of our earnings. We shop on Vinted for ourselves and the kids, we aren’t excessive with shopping ie it’s Sainsburys and not Waitrose, we have a five year old car, we have the odd meal out. We do live to our means and are down to our last £30 or so in current accounts.

We don’t live the high life that people expect!

Lifestyle I think. People get all sorts on finance and want the new everything.

I just learned to budget at an early age. DH and I are both on high incomes and have kids. We just budget what we spend without going into overkill. I might splash out and spend £300 on a dress if I want it, but most of the time I'm happy with Vinted or charity shops. We cook from scratch which is cheaper; I had a party a while ago and bought pre-packaged stuff. Cost a fortune.

We're mortgage free now(we got lucky), but beforehand we still had money left over. We don't have a picture perfect house that's all shiny and insta-perfect. I've known people to spend a fortune on house stuff and neither of us can be bothered. We like second hand and vintage stuff. We mainly decorate ourselves, too. Don't see the point in hiring someone to come and paint the living room when we've got a pair of hands each. Cars aren't new and fancy.

It's not necessarily a conscious choice not to go and buy these things; it's just not the sort of thing we're interested in. I suppose if people are, it's different.

Up until now we've always spent up to and beyond our very decent household income. We've had lots of wonderful holidays and fantastic experiences. I regret absolutely nothing! Mierhage is now paid off. We've been lucky to have decent pensions (although mine cost 16% of my wage). You can save and save for the future but ultimately nothing is guaranteed!

Bit harsh

It may well depend on outgoings, cost of housing locally, but some people just are spendthrifts.

£150k a year will go an awful lot further if you can buy a nice house in a nice area for £350k and don’t have childcare costs.

Compare that with a 2 bed terraced house at £650k, plus a 2 year old in full time childcare….

Where a person lives will have a massive impact on living costs ,money goes a lot further in some parts of the country than others

In theory I have nothing left in my current account before pay day but that's because I get paid then all bills get paid and money is sent off to various accounts for saving and spending. Then reset to zero.

It's not about being frugal.

It's about changing what we view as "normal".

I look at friends who think everything has to be new. They "do up" rooms in their house, they drive lease hire expensive cars, clothes are always bought new etc...

I love second hand, upcycling stuff, cooking from scratch etc...

I don't see it as living frugally. I see that as just normal life.

My family tend to spend our money on experiences and family fun rather than materialistic stuff.

Tax and deductions on everything.

I say my husband and i live paycheck to paycheck, as we almost always end up with +/- £20 in our account by the day before payday. But we put £1500 a month minimum saving towards various things (mortgage overpayment, savings, holidays, Christmas etc.)

I'm guessing some of these higher earner mean similar.

Plus someone on £100k is likely to live in a much more expensive house and likely to live in a much more expensive area - it's all relative

Mainly lifestyle creep. When people earn more they often realise that they can afford more, so upgrade their car, house, ect, The only way to stop it is to "cap" your lifestyle at a stage you are comfortable with despite any pay rises, and decide that the more you earn the more you save instead of spend.

Because the more you earn, the more you spend.
The people on £100k are not living in really cheap housing, shopping in Lidl, and wearing stuff from Primark.

2k for 2 kids nursery fees?! Where is this magical place? It's double that!

Pay 10% into my pension before it even reaches my bank account and collectively my husband and i try and put 10 to 15% into savings on pay day.

I don't look down my nose at people who don't do this though. I was lucky to have money mindedness instilled in me by my parents from a young age and my husband and I have worked hard to increase our salaries over the years.

Ultimately everyone is trying to do the best with what they have and I'm not here to judge.

Mortgage
Childcare

100k salary is 5k a month after tax, student loan, and 6% pension contributions.

Its not unusual for a mortgage in london/South east to be 2k a month.
Nursery fees for two kids - another 2k.
Food & bills will eat the other grand.

Lifestyle creep.