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?

#3

Haven't rtft but I'm mystified how anyone on £140k a year could think they are not doing that well? Is it just the green eyed monster? Why not get yourself some friends on normal salaries and see how you feel then? 😁 A mindset change can work wonders.
I earn a hell of a lot less than that and feel incredibly blessed and grateful for everything. Or are you falling into the trap of "must haves" that aren't essential? All the people with Chelsea tractors etc? I value health above everything due to a lot of illness in my life. I don't give a fig if my car /clothes/ phone etc aren't cool.
Ps holiday in the UK. It's a lot cheaper.

3- both of us high earners. Husband on 7 figures (lawyer), mine c200 (own company).
Both worked bloody hard and enjoy what we do.
Believe it or not we still have to watch where it all goes

I’m not really sure of the point of these kind of posts. I get that it’s annoying that people have more money/disposable etc. but it’s just the way it is. I’m not sure what difference the reason makes?

Our household income is around 300k, I think take home around £11k per month(?) it’s a high ish and a middle salary. We live in a 4 bed terrace in london. I dont think our neighbours think we’re rich, we’re all quite similar I think. We do have 1 set of neighbours who are 10 years younger than us and my husband commented that he couldn’t believe they could afford to live here and it must be family money….(god knows why thry
chose here, it’s full of small children!)

We were lucky to make a chunk on previous house (£100k ish that then went as deposit on new house), we overpaid the allowed amount for the first 2 years, so our LTV is below 50% now.

We also holiday at a borrowed house, use air miles earned through work to fly business sometimes (or we did….not since kids!). We also pay a huge amount in childcare as we subsidise childcare for others. It’s not actually financially efficient for me to work, but I do. Our car was expensive, but we haven’t replaced it recently and I’ve dented the shit out of it (probably why husband is reluctant to replace), we only have 1 car as it’s totally unnecessary to have 2. We do have some modest parental help (his) but is like £10k towards a building job, not here’s a £300k deposit. We’re also fortunate to have family babysitting, so can eat out plenty. When we are away we pay for a nanny though.

overall the answer is a good salary. But I think a lot of people have various factors and it’s usually not just 1 thing.

We managed it by -

A) naturally both being savers. We like saving and both spend relatively little on Stuff. We're not that interested in clothes or technology or anything.

B) we prioritised overpaying the mortgage and holidays as those things matter to us. So that's the spending which will be apparent to others.

C) we met and had children later in life so we had a lot of equity already in our single houses to buy a nice one together.

D) I rented out a room in my house for a decade before marrying which helped a lot with the mortgage.

E) we don't live in London

Our house is worth £650k ish, our last remortgage was for £300k at 4.45% for 18 years. So yeah will be mortgage free at 58 but I’ll still need to live in the house! Looking forward to my lucrative decade of 58-68 where I guess I’ll still be working full time whilst hopefully start seeing a grandchild or two!

Not sure where I am going wrong there?? (As I say I was 29 when we bought the house so technically mortgage should be coming off at 54-55 but we remortgaged to do the loft like many are doing here so that extended mortgage term until I will be 58).

We have some of those things and a similar income, we don't live in a London which I expect is the biggest factor

Ok that is a useful list!

Go no spend next month. Seriously. If you need something find a way to get it without spending. Ie. You need new clothes for 18 month old. Then sell old ones on vinted and buy second hand bundle.

£800 food needs controlling.
Give yourself a super ambitious budget. You could easily cut that in half. And you’re in London! So much cheaper market type places. Halal butcher. Random polish store for veg etc.

£650 recreation spend just cut that and don’t do anything paid for a month. Again you’re in London. So much free stuff to do.

In future months you will have to do something then pick a few memberships and go to those continuously. Ie. Merlin pass, Kew membership, David Lloyd etc. that’s going to be cheaper than that spend every month. Or just go on day trips to visit a random town and walk around.

£300 on a car is not cheap. We have a Volvo brand new top spec for 400. So you could skim 100 easily from somewhere and have said car.

£90 insurance is unlucky and extortionate.

£200 unexpected is probably reasonable but I would try to make that as part of the fun fund and when it’s gone it’s gone.

Your parents contracts could easily be £40 with a bit of shopping around and you handing down your second hand phones.

So from my rough maths and accounting for ALOT of failure within this you could easily have 1-1.5k left each month. Which is ALOT of overpayment on a 400k mortgage. You would literally be paying it off more than twice as fast as someone else.

Oh give over! Honestly 🙄

Yeah but my parents were able to buy a 3bed semi in east London in the late eighties, my dad worked as a machinist in a factory and my mum didn't go back to work until my brother was five and I was seven and when I was young she had low paid jobs like cleaning. No family financial help.
Not a hope in hell these days!

I feel your pain. The cost of living today is shocking.

We are talking about a specific set of people here - those living the lifestyle OP's describing.
140K combined income here in the North West , near a city like Manchester, Sheffield or Liverpool will get you a nice big 3/4 bed, within a 30 min drive/train to the city. In a naice area with rich footballers and bars, restaurants etc.
In London a 1 bed flat in a commuter area goes for 300K.
Furthermore, the salaries for highly paid corporate jobs like banking, software development even corporate functions like HR, finance etc are much higher in London if you climb the ladder. And of course some jobs don't exist outside of London at all.
And as I mentioned contracting opportunities which command a high day rate are also concentrated in London.

Of course the 'average' person won't earn much more. Teachers, nurses , cleaners junior doctors etc don't. But if you're talking about 'highly paid professional jobs' the ceiling is much higher in London.

I got a promotion last year, around the same time our mortgage fixed rate ended and our payments went up by £560 a month, so we're actually worse off than we were before!

We both come from working class backgrounds. University followed by decent jobs, met at uni so we pooled our resources early. We bought our first (very crappy) house in the SE, renovated it ourselves during evenings and weekends, sold it for a small profit, bought a bigger property, changed jobs and salaries improved as we advanced our careers. Saved as much as possible (no fancy travel, designer clothing etc), mortgage overpayments wherever possible, delayed having kids until our mid 30s. It’s not easy and COL was less of a problem 20 years ago but it worked out well for us. Now mid 40s

All 3 in our case, sorry. Although would desperately love to have 3 kids and not sure I ever willl because of the choices I made for number three on your list.

I find these threads so depressing. What a sad outlook on like.

When we were in our thirties with little kids I remember being really happy living in a friendly, diverse community with strong friendships, a comfy cottage, fulfilling jobs and happy family holidays in the UK.

Ours’ is a posh commuter village so there were always wealthier people and less well off people but I don’t ever remember feeling envious of the richer ones. We all rubbed along pretty well and it was nice to have different types of friends.

We are older now, and are wealthy ourselves. We have a lovely life and no money worries. But nothing hinges on being rich. I am so pleased that we kept a world view that wasn’t predicated on keeping up with the Jones. It’s a miserable way to live.

Aside from the doodle, we are lucky enough to have all those things. For us it’s having two high earners (joint income around £230k). We have a large mortgage and lease two cars. We’ve just finished the chunky childcare fees (2 children). We’re comfortable month to month but not flush with assets. We don’t have any family money / bank of mum and dad.

I looked at Altrincham but as I say my pay was cut to about £60k and the family houses are still £600k and the stamp duty, selling and moving costs would cost us £30k so it was a no go. Plus the actual pools of jobs was much smaller should I get the sack/redundancy so it didn’t feel like a sensible move.

Small mortgages.

We have a very good household income but our mortgage takes up an enormous amount of it for an average end terrace.

If we didn't have such a big mortgage we'd have much more disposable income.

Well, I work in a supermarket, so earn nowhere near what you do, (or most people on mumsnet by the looks of things!) husband earns a decent wage, but again would probably seem pittance on here. We own a 4 bed house (not in London, but very nice area in Cotswolds) have two kids, two cars, (one new, one old) and can afford to go abroad 3-4 times a year. We usually do one AI, and the others are more basic. Husbands wages cover the mortgage, bills, home improvements, etc, and my wages are used for some food shops, kids things, and saving for holidays, which are a priority to us. We wouldn't put a holiday on a credit card, if the money isn't there, we don't book. We only have 2 kids though and I think that's the main difference. We went to Thailand at Easter and with an additional child, we'd have had to get an entire extra room, which would have almost doubled the holiday price, and would have made it unaffordable. We actually both wanted another child, but the cost factor of holidays was the reason we stuck at two, as it wouldn't be attainable for us to do it with more than 2.

I sometimes wonder about this too OP, but try to focus on what I have and making the most of it. I also thought I was doing pretty well for myself until I started reading mumsnet threads.

Family money. That's the beginning and the end of it. If you emerge from school and uni with little to no debt, and someone gives you £500k or more early inheritance towards a House, and you have two six figure jobs, then you have the income and disposable salary for it. If you are saddled with debt, you don't, even if your income is high.

Are you sure these people own their homes? I was quite surprised to find a lot of families in London are renting those £1m houses. In my group this is mostly due to being immigrants where they have houses and wealth back home, bit they've been in London for a few years and have families here. Decent professional income, don't have the capital to buy a house, but want to love in a nice area. Rental prices for family homes are crazy (£3,800k pcm upwards according to Rightmove today) but a lot of people are doing it. You need a high income to afford it.

My OH and I were just just discussing this phenomenon about a family we now. Husband is a part time driving instructor. Wife is a part time customer satisfaction manager. We reckon 60k max combined income. Live in a big house on the most expensive road in town where property trades for £1m plus. They paid £625k several years back and then spent £200k on building work, but wouldn't be able to service a mortgage on that - so it's pretty obvs that they've had bags of family money at some point and keep very quiet about it. But lots of people we know puzzle over it. Unexplained wealth!

A credit card with air miles
Generous parents
Savings to pay for nursery fees
Not going out to eat or drink very much

That's me