Higher middle earners- how do you afford your fancy life?

[Led921900]

This is very much a tongue in cheek post … and yes I might be crying in my Tesco finest Prosecco but….

I live in London and there are smallish but relatively expensive houses around me that sell for about £1.1 million… inhabited by 2 parent 2 children families with nice cars, bugaboos and doodle dogs who go on all inclusive foreign holidays. How???

It’s not that unusual…. whereas we have a household income of about £140k which I thought was pretty good and I don’t feel like we’re doing particularly well at all. No prospect of upsizing our house, no fancy cars, no foreign holidays at an algarve all inclusive. I have had 3 kids but my childcare is cheap (£55 nursery a day full time) and to be honest when the kids are school age the childcare difference between 2 or 3 kids is hardly anything.

So how are you all doing it? It’s no fancy extensions for us, no upsizing to a nice house, no fancy cars (running a cheap Citroen) and our fancy foreign holiday is driving 10 hours to a nice Eurocamp caravan with air conditioning.

Is it…

1. Bank of mum and dad or inheritance has allowed you to afford a nice house with small mortgage?

2. Not having kids?

3. A very well paid job (if so, what and what earnings?).

My background is working class northerner but I can’t see the lifestyle we have now on a very good income is any different than what my parents could afford with us! And I’ve looked at my job elsewhere and the cut in earnings is more than the lower mortgage (although actually houses in nice areas near good schools i. Wirral/manchester are about the same as mine anyway!)

I don’t get it?

On reflection I guess the title is wrong as I just mean upper middle class!

There are a fair amount of professional jobs in London that pay very well, so if both parents are on six figures, plus parents that paid their house deposit and cleared their student debt, they will be doing ok.

I feel your pain, in a similar situation but probably older. I think most had family help to get on the housing ladder with flats, then when coupled up kept the flats as BTL to provide increased income. Or have other income sources to just a salary.

Few upper middle class go on all inclusive hols, think Middletons.

We often think the same. We think it’s a combination of BOMAD and buying a property relatively early in life, about 20 years ago.

I think you’re probably looking at more like a 300k salary for that lifestyle in London tbh. We’re on 275ish. We have a nice 5 bed house and good holidays, but we also still drive a 13 year old Ford and do the big shop at Lidl. Kids are in private education but we aren’t the ones paying. Our first house deposit was funded with inheritance from grandparents.

So, on balance, a combination of 1 and 3.

What are you spending it on? Mortgage at a guess / inheritance often means people have less mortgage and then they would be rolling in it at 7k a month coming in

You'd be surprised at how much some people earn.

I honestly think the people who have all these things are earning a lot more than you think.

Where I live in gentrified E London the people who have equivalent jobs to ours and our friends 20 years ago cannot afford new car or non-camping holidays.

The people that can turn out to be bank of mum and dad to buy their first flat, and now earn c. £150K each.

I think those standard middle class incomes - solicitor, journalist, lecturer - no longer allow people to have families in London. You have to be in a tech or tech-adjacent industry.

Or banking/city/city law/consultancy-type professions that have always paid very well.

Basically, no-one you'd think of as 'Guardian-reading' 20 years ago can now live here as a family.

Upper middles don’t do all inclusive. They use air miles from work to upgrade their flight and stay at a friend or relation’s villa.

They have usually been gifted deposits or first flats, and remortgaged the equity when moving on, so have relatively low LTV which means low mortgage payments, and good pension prospects thrown in. The mortgage is a 30 year loan because working lives are longer now.

Their parents are probably paying for school fees or providing free childcare and babysitting.

The fancy car is either a company car or it’s on finance because the business model has changed.

For us, a bit of (1) but mainly (3). But we also choose what we spend our money on - DS goes to a state school, we don't have a car, our outgoings are pretty low. So we are able to spend more in our house or go on nice holidays.

Never underestimate the power of generational wealth. People that were helped onto the property ladder in their twenties / early thirties have it made. I know families that earn less than our household £140k) but go on way more holidays, have better cars, have nicer things because they’re, at least in part, gifted.

Family wealth is a huge factor. I got a huge chunk towards my house deposit and so did most of my friends. Then DH got a big inheritance which enabled us to move up the ladder quite painlessly

I think the era when your salary was the main determinant of lifestyle is fading and it doesn't seem right or fair or very motivating for people

Yes this happened to a friend. Dad bought her a small London flat she moved in with her husband and lets out the flat. Minted.

And yes , family and friends with holiday homes and yachts dotted about mean lots of holidays without crazy costs

Yes to high earnings. People can slob about WFM in shorts and earn £250k in job sectors you have never heard of, while a salaried GP is on £80k and an MP on £85k.

I think it’s probably having bought property sooner/been gifted it, even higher earnings than yours (which are high but probably not that high for London) and only 2 kids.

Family wealth (DH's) paid for about half our house.

That’s a bit mad though.

Grandparents for my husband and I were in council houses I think our total inheritance may have been a few thousand.

Our parents haven’t gifted us anything and the way it’s going I can’t imagine gifting my kids anything except possibly they will have slightly more inheritance from my husbands parents given they own their house but that’s going to be split and I’m not counting on it… if it all goes on good quality care in old age or they equity release it good on them! We also don’t have grandparents covering childcare.

I’m just sitting here earning what I do (and I am the main earner) wondering how I can have a good income and an average lifestyle?! And no idea what my kids will do with higher student loans, higher house prices etc. I’m hoping to get a caravan on retirement so they can live in London house and hopefully bank the money to save toward their own house!

Our money goes on mainly;
mortgage and bills
food and stuff (clothes, kids classes and fun stuff)
childcare
savings/holidays
car
commuting

And it’s all gone!

I agree. I think it's created a really unfair society and one that demotivates people on both sides.

I think house prices are just so out of kilter with salaries that inheritance has more of an influence on lifestyle than hard work

(And I say that as someone who had an inheritance but also worked hard to earn well. I know it would have taken me many more years to get onto the housing ladder without the inheritance, even though I was saving hard)

Our household income is much higher - although you would not know it from our lifestyle, so pwrhaps we are not your target. We live in an area with houses 1m - 2m+ (but also some like ours cheaper). Some of our friends inherited some wealth or are just 5 to 10 years older than us so benefited from really steep house price rises combined with moving to a then slightly shabby area. Or just really good jobs.

I think it’s about having earned well for a long period of time. DH is a bit older and bought his first house at 21, because it was easier and cheaper back then, so by the time he settled down with me, he was three rungs up the property ladder.

But we’ve both always earnt above average so the wealth builds over the years. And we’re sensible about cars, holidays, credit cards.

No parental help at all, we’re both from normal backgrounds.

earning 140k between you, if you can’t afford a nicer car or a cheap all inclusive to the Algarve, I assume you have big debts you are paying off, or you are spending your money on other things? Either that or you have a very large mortgage

We were gifted a large deposit in our early 20s (now both late 30s). Our household income is approx 400k. 3 children. Nice house, nice cars, nice holidays (never AI). We are not in London. Don't feel different to our peers, as in I think mostly a similar earning bracket?

No bank of mum and dad here.

two professional salaries and buying a flat in a good area when interest rates were v low and massively overpaying. Then buying a doer upper house on a long term low fixed rate mortgage.

continuing to work in said professional jobs although we both had to take a half step back once we had kids as we had zero family support. I worked 4 days he worked 5 days and we sucked up paying for a nanny for yeaarrrrrrrrssss.

We have done 60% of the renovations slowly over time and we’re now in the private secondary school fees zone (state primary but for us it’s either move to suburbia or suck up the school fees for what we want for our family) but after treading water in jobs for a decade we are now starting to get opportunities to push on.

we both earn six figures but our choices are not exactly cheap. That’s our choice though and we can make it. We do save on some other potential choices We have an old car, one overseas holiday a year which might be a small Airbnb in a city rather than all inclusive 5* hotel! and no doodle puppy but do have a small holiday home, great careers and good savings and decent enough pensions

biggest lucky break? Buying that first flat at a tiny internet rate and saving the difference in interest payments like mad. But the same flat is now double the price - so I think it’s genuinely not as easy now.