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?

Idk why you can't afford a better lifestyle - probably "house poor" - but I always thought that (leased) fancy cars and the Algarve were supposed to be for chavs, not posh London professionals?

Not sure if this helps OP but I'm about to buy a £1m property in London, have 1 young DC and trying for another

Early 39s, earn £90k a year in a senior role in media (have made moves between companies to have this rise in salary)

DH is same age, a solicitor in a top 50 law firm - earns £115k.

Not sure how helpful that is! But we have no parental help, and never have, both from quite poor backgrounds. I got my deposit from my first house from a combination of savings & a voluntary redundancy where I found another role immediately.

We've had our current house for six years and equity has increased a fair bit. Bought in a less desirable part of London and now it's more desirable.

Live in a 5 bed in zone 1, worth several million. Husband is a partner in a major law firm with very high earnings (top 0.0001% I can imagine) and I earn relatively well too (probably top 5%). Also inheritance. We have 1 child and another on the way. So we tick off #1 and #3.

😂 you sound like me, right down to the income, eurocamp and battered Citroen

To be fair we had an AI fancy holiday last year and will have another next year, but that's probably the difference between you having 3 DC and us having 1

At the risk of being piled on - your combined income is low for London OP. I moved from there to the North West - and there are more and more people earning similar, with much lower house prices.

Inherited wealth aside there are lots of people making salaries like 200K+ as contractors and individual contributors for corporate positions. In the North West it's possible, but far more unusual to break that amount even for senior management.

Loads of similar threads recently. What on earth are you spending your money on then? List your expenses. And others will comment. We have great holidays abroad, doesn't cost that much. 5* Portugal doesn't cost that much.
portugal

This makes me happy to be living on the continent, where people on minimum wage can buy a house and afford camping holidays and a battered Citroen! (Sorry, probably not helpful.)

We take home about 100k more than you. No family help at any point. We have a massive mortgage and after childcare, bills etc we have enough for a holiday and to save a bit.

I think the reality is that many middle class couples living in these million plus houses are either earning quite a bit more than you and/or have had a lot of family help.

I’m on £100k ish and DH on £43k ish but he only works 4 days a week
And we’re stuck?!
He is looking for a new job as limited opportunity where he is and as I’m a programme manager and there are less roles at programme director/head of delivery to earn more and i’m not experienced enough anyway for such a jump.

We looked at moving to north west but salaries much lower and mortgage wasn’t that much lower and looked at moving into Kent where he’s from and the commute costs killed it.

It’s just weird.

When i was little or even starting my graduate role on £21k a £100k would’ve been loadsa money territory and now it really doesn’t feel like it!

The house we’ve bought was when I was 29 and he was 31. We were both full time renting before that. Had our first kid at 32. We remortgaged to do a loft conversion but that’s it.

No big debts, mortgage is £2k a month childcare is £1.2k a month though ultimately that will go down to about £750 a month when all in school.

Our lifestyle is nice with swimming lessons and holiday etc but it just seems mad to me and like we’re stuck! Seems to improve for my peers when they’re all in school and seem to get a promotion at the same time but my youngest is only 18 months so a few years away from that I think!

There really aren’t millions of people in London in the 400k household income bracket. So much of housing wealth is because of people a bit older &/or got helped onto the ladder at a very young age benefited from the boom in prices. There is a lot of generational wealth, I sold my flat to parents buying it for their dc. It was the 4th on my road to sell to parents and whereas the demographic was slightly older, it’s become younger, whiter and much more middle class. I have school mum friends in the 100-200k bracket but who will inherit 800k or have parents who pay school fees, for holidays etc.

when you’re a family of 5 you need two rooms so going away starts mounting up. Flights alone can come in at £2k for us.

When i was little or even starting my graduate role on £21k a £100k would’ve been loadsa money territory and now it really doesn’t feel like it!

wage stagnation, inflation has had an impact too.

It’s 3dc too, how is your childcare so cheap?

8k
2 k mortgage
1.2 childcare

Leaves nearly 5 k

That's more than most families before housing

I think you need to examine your spend more carefully! You should be able to afford a decent car and holiday

be careful of assuming that because other guys have a holiday and a car that they also spend on clothes and activities the way you do / they might be saving 3k a month for the big ticket items

I can only speak for myself. No student debt as that was after my time (very grateful for that). Then combination of luck, hard work and being willing to take risks/ sacrifices when younger. We moved mid twenties to a country that most wouldn’t go to then. Then we were moved around the world, sometimes at very short notice, as needed, two kids in tow.

We have always spent within out income so only debt is mortgage and when younger lived further out/ less fashionable areas to keep costs down. Majority of holidays close to home (so Uk based when we lived here, 1 or 2 hours travel when we lived overseas)

Kids have spent nearly all their education in private schools, either company sponsored due to the moves or I teach in the same school as them so get a fee discount.

Some inheritance from grandparents but not a huge amount, but it did come at fortuitous times (though as with the majority prefer the people were here than the money!)

I also know people with 1m interest only mortgages but who have put down 800k. They plan to downsize at some point.

Buying a house early. Or generational wealth. We have friends who have been gifted a £1m house by parents. Our friends kids are now solidly set up for a middle class lifestyle, regardless of how much the parents earn. It's not particularly fair, but it's life. We live in London and earn £65k between us, we have two kids. I think we live a nice life, so I'm not sure how you can be earning double us and be struggling, but I suppose everyone has different outgoings.

They earn a lot more than you imagine - ie hundreds of thousands of pounds a year.

I love it when people make statements like 140k is low for London. It really isn’t-maybe it is in a particular circle of acquaintances but it’s not ‘low for London’.

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, it’s not really right that your salary is less important than if your parents have money and you can inherit.

husband earns more than that but as you have suggested it’s a combo. But a lot of 1 + 3

we were basically given our house so no mortgage, just a small loan for some reno work - and in laws pay children’s school fees.

as a lot of PPs have said - lots of holidays are largely free. My friends and I will all go and stay I each others family holiday homes and generally will only pay a big tip for the cleaner while we’re there + a case of wine sent to the owners once home. we put all DHs business expenses through his BA Amex and reclaim them so we have gazillions of miles.

DH appears to the outside world to mooch about at home in rracksuit bottoms half the week - but actually runs the logistics of a big international company and makes good salary plus bonus.

we’re extraordinarily fortunate to have been so supported + to have a network of trusted people around us who share their nice things with us. I wouldn’t dream of claiming that ‘it’s all hustle + hard work’ - DH works super hard, we’d have a good life if we were solely dependent on him - But most of the non essential sparkle is gifted, loaned or free-to-friends + family.

I think a big thing is housing. The wealthier young people I know were often gifted a hefty chunk of deposit for a flat as soon as they started working. So on paper their lifestyle looked relatively similar but when it comes to buying with a partner they have 10-ish years of mortgage paid off plus savings, which effectively doubles or triples the capital they have to put into a family home. Lower mortgage repayments then means more money for the bugaboo and the holidays.

It feels like your salaries just aren't huge for the location you're in. A £2k mortgage seems huge to me. I'm in a nice suburb in Scotland. We earn more - combined £170k - and have quite a comfortable life including private school fees. We're not flash by any means but if we took the school fees out the equation we could be living a fancy lifestyle. Our mortgage is £1.4K for a decent 4 bed detached.

Living in London is your problem

Property prices are far more reasonable elsewhere