What percentage of monthly wage is high for disposable income?

[anonymous35645]

Trying to figure out if I'm in a very lucky situation here or if this is common. I'm not asking salary numbers or anything but as a percentage of income that is fully disposable, is this too high?

My monthly take home is a bit over £3100 and my outgoings for mortgage, bills, my direct debits (eg gym phone subscriptions pet insurance etc) and my food shop is around £600. So I've got around £2500 or 80% ish of my take home pay per month as disposable income.

For full disclosure I pay a small amount towards our mortgage. My partner covers all bills and has more leftover than I do, but should I be contributing more, or should we start overpaying our mortgage? I mostly save my leftover money for holidays, eating out and bits around the house or hobbies, or I spend it on friends and family. I'm wondering if I should get a buy to let, invest it or just overpay our mortgage?

And I know I might get a few sassy responses here, I appreciate compared to some I am in a fortunate situation, but I know lots of people who always have the flashiest house, car, labelled everything and this isn't me nor is it who I desire to be - just trying to make a sensible decision and not fritter my money away.

Probably worth me mentioning I've recently been promoted with a 30% pay rise which is my reason to ask, had a lot less before this left per month but was still only ever outgoings of £600 a month for everything.

It is very high and you should be saving/investing a decent wedge of that.

I'm in the very fortunate position to have about £4500 net income a month and low outgoings. £2800 goes into a mix of savings, S&S ISA, JISA, pension and mortgage overpayment every month. The rest covers mortgage, bills, food, petrol and disposable income.

Thank you. Nice to have a helpful reply as I was worried I'd get abuse!

I have started putting some money into index funds after learning about it in YouTube. I did think perhaps it's very high so want to be more sensible about how I utilise the money.

It is very high. We have £1200 disposable income for a family of 5. You should definitely look into investing.

What are your goals? What life do you want in the future? Does your partner share those goals? Are you 50-50 owners of the property or does your DP own a bigger share as they’re paying more?

What’s your pension provision like? How old are you?

For a start, if you were affording your lifestyle before the 30% increase then make plans to save/invest all of that 30%, it's excess and if you start spending it every month then you'll become accustomed to spending it.

Split it up so some into long term pots, some into easy access for things like a new boiler, roof, car if you need one, some into fun saving like holidays, Xmas.

I also set up the round up option with NatWest, so if I buy something with my card for £1.48, then 52p will be transferred into a savings account. It actually adds up pretty quick and i have it in an instant access savings account in case I find myself needing it within the month.

I guess I want multiple income streams so I can retire early, that's the pipe dream! My partner is very supportive of my goals and we are very aligned. The house is technically split but he has put a lot more in than me plus bills and won't take more when I've offered it.

I have a good pension through my job where they match my contribution and a bit more. I'm early thirties.

I wouldn’t overpay the mortgage until
you are married unless there is a way of paying down your half. So it depends how you own
your home.

Thanks so much this is great advice. I use Monzo and do use the round up feature, it's great.

Yes without wanting to sound like a total arse, I think that's what I was getting at because I was comfortable before, had several exotic holidays per year and don't 'need' this extra money per se and want to use it wisely. Good idea to not let myself get used to spending it. I'd quite like to save to convert the loft into a new office space for myself so can start there. I think we do actually need a new boiler too. We live in a very regular 3 bedroom semi and don't see a need to chase bigger and better etc so don't want to just get a more expensive house. We are in a nice area though so it's expensive for what you can get elsewhere.

We aren't married. Been together coming up 17 years and still get along so well.. unsure if we should marry or if it'll not change anything.

No abuse but were you seriously thinking that most people have £2.5k free a month/ 80% of most people's take home is disposable?

No one would be panicking about CoL if that were the case.

I guess you're asking what you should do with the excess which is a perfectly reasonable question, but you have phrased it quite strangely.

I earn a bit more than you (salary + rental income - not a planned BTL but my old property) but my outgoings are similar to yours as DP does the heavy lifting on our mortgage (he earns a lot more than me). I save what I can and buy what I like. I probably ought to save a bit more though!

Are both names on the mortgage? Is there a percentage split specified on the deeds?

Are you joint tenants, or tenants in common?

With regard marriage, remember that the purpose of a marriage is to establish a legal contract between 2 people. It's become more about parties, pretty dresses and romance but that's a wedding not a marriage.

As it stands right now, do you:

• have wills that specify where his half of the house would go if he was to die? And vice versa.
• do you have any legal document showing that you are next of kin and should be making medical and financial decisions on his behalf in the event of a serious illness or accident that leaves him unable to make those decisions himself? And vice versa?
• Have paperwork confirming you have a legal right to a share of the house in the event the relationship breaks down?
• if you were to get pregnant, would you return to work after maternity or would you stop working? If you were to stop working would he be willing to be the only income and to share his salary equally giving you full access to the money? If you were to give up your job, lose your career progress and earning powers, then split up, would he voluntarily without a formal financial order, ensure that you are not left penniless?

I know it can sound a bit callous and calculated but honestly if you are in a position where he is always likely to be the higher earner and you intend to have children at some point then yes marriage is sensible.

I say that as someone who massively out earns their husband, has significantly more savings and would probably end up paying my husband a lot of money if we were to split up.

Definitely invest.
We invested our extra over the years into - rental properties, premium bonds, private pensions as well as work ones, isa's and lots of lovely holidays.
We are able to retire soon. We're still investing considerably less amounts, but more fun alternative things - jewelry, fine wine etc.

Most no, some yes. Users of this site are on quite a big spectrum, I'm not rich I just have low outgoings. No private school fees, huge houses or outrageous spending at all.

I guess I wanted to understand a bit more about if others were in my situation and how they'd make the best decisions, or just for advice in general.

I do still worry about the cost of living, if one of us lost a job for example, our situation would change massively and I'm very aware of that. However I appreciate that my worries are milder than others who don't have any wiggle room for increasing costs.

Thank you, it's good to know I'm not the only person in this position and don't need to feel terrible for it! Yeah I agree I need to save more. I'm also in a new career that has a very good upward earning potential and could end up on the same pay as my partner or more with hard work and more courses etc.

Both on the mortgage yes, joint I think? I can check this, though I don't have any relationship worries about us splitting.

Thank you for this, I don't know all the answers but I know I'm named on his will and work documents as the person everything should go to. Not too sure on the rest, could ask but don't want to alarm him 😄

Both on the mortgage yes, joint I think? I can check this, though I don't have any relationship worries about us splitting
Nobody ever thinks they are going to split up. You need to know this information about your mortgage. I think if I was in your position I’d use the opportunity to build up savings and pay the maximum you can into your pension.

Thank you. That's what I'm thinking. At the moment I'm saving but spending it on lovely experiences. Would make sense to save more for early retirement/a safety net etc

OP, you have been with your partner for 17 years and are in your early 30s. That means you met him when you were 16?

What are your plans re: dcs. Do you plan to have any? Dcs are the biggest money suck there ever was and if you plan on having any, I would advise getting married first and putting aside as much as you can in ISA, pensions and every tax shelter possible.

This is the most important thing you need to know.

Until you can be 100% confident that the house is 50-50 joint tenants (not tenants in common and a different % split) then you shouldn’t make any longer term decisions on what to do with your money.

17. We are on the fence re. Children

Getting married is a good way of getting rights without alarming him.