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?

I think the days of home ownership are over . The way forward is going to be renting sadly for this generation. My DC rents but is not bothered about getting on the housing ladder. He has accepted he will never own a house but is stoic about it .

We simply couldn't afford the mortgage to buy this house as first time buyers now

absolutely same for us and this house theres no way we could have bought it for £650k on the salary I was on at 30.

the only way I see it working is the inheritance from grandparents rolling down to their grandchildren. Say each maternal grandparent has 4 grandchildren then each effectively might inherit 25% of their own housing costs. Plus mortgages were realistically you’re not going to pay it off in your lifetime, I think China have 100 year mortgages. Maybe you pay off what you can and on retirement switch to an interest only so you can afford it on your pension. That’s assuming your equity isn’t pillaged for your care costs.

Certainly as a home owner and the more I discuss it happy with my lot that really the salary doesn’t go as far as I expected it to.
But the creeping worry is my kids. Hopefully something will change in the next 20 years!

All of this & in all seriousness they need to have their own income & marry very well too if you want your children to have the kind of affluence you are describing. Maybe Carole Middleton will write a book on the marrying well part, her three kids all did!

This, really. We liquidated all our parents and some other relatives who died somewhat tragically, and converted them to inheritance very young so we have no mortgage but also no family whatsoever, so it's swings and roundabouts, though we are v fortunate in some ways.

Can someone tell me what’s wrong with AI holidays? We just booked one as it’s so easy with young children

It only gets more convenient as they get older imo.

Eldest two ds's are 16 and 14. Constantly active, constantly eating, standard sporty teen boys. Contrary to me and dh who aren't really big eaters when abroad (just the heat...AI is probably wasted on us, food-wise) the eldest dc tend to eat more than usual. Probably partly due to the novelty value of having free reign to use a pool snack bar/massive buffet every day and partly because they're even more active than usual...walking miles, swimming 5 times a day etc. But them being able to get what they want whenever they want it is invaluable.

Youngest ds (7) also thoroughly enjoys being able to just wander up and get his own drinks or ice lollies ten times a day. I love other holiday types too but I'm a big fan of the convenience of AI.

Agree with a pp, there's a weird snobbery on MN about AI. Often framed as lack of culture and subtly (or not subtly!) sneering in tone. Well, I'll get my culture on my weekend breaks to interesting, quirky places. On a fortnight abroad in summer with three boys, they're interested in pools, beaches, bombing down water slides, jet skiing, snorkeling and free reign of table tennis/football/whatever. Not so much in the quirky bistro up a mountainside path or the historic marina 😂

My siblings are very late 40s we are early 40s and just those few years difference meant they were in a position, post grad job to buy their first flat in An expensive part of London. We earn good money if looking at this UK wide but property had rocketed by the time we were in a position to buy in 2007, we couldn’t help being at university. My SIL has an older sister so mid 50s and they had one income that was professional salary and one SAHM, there is no way they would be able to buy the house they did, in that part of London, even 10 years after they bought it so in 2005. People who are older did have that windfall there is no denying it and that is ‘luck’!

We are on this kind of money and definitely drive to ski (and not even to Val d’Isere, we save our pennies by going to the cheaper places like Tignes) and take all the free holiday accommodation we can get! We have 3 kids and (shocker) try to stay within an annual travel budget because we still want to prioritize things like saving, kids’ extracurriculars, etc. Everyone has to make spending choices! We do still have a generous travel budget compared to many, but we prefer to travel several times/year with our kids to visit interesting places rather than blowing it all on a single opulent ski holiday or some overpriced Groundhog Day AI.

If it was a couple in low season, I’d expect a starting of around £10k, if it’s high season around £30k. If it’s a family, £30-40k.

Obviously this is all dependant on location, hotel, flight class etc but I have clients that will book holidays of somewhere in that value 2/3x a year.

It’s not unusual for holidays to run into the £75-£150k category, but this is upper class people usually if it’s on one holiday.

Agree - we are going Club Med AI for 2 weeks, my teens are 19 and 16 (oldest is on spectrum and still finishing A levels). AI means the teens have some autonomy and can hang out without us, less issue over lost bank cards, and DH and I can have a few date nights without them as they can look after themselves - esp an issue as both are fussy/restrictive eaters (ASD).

It’s also a 5Star resort/restaurants/facilities so not even remotely cheap. But worth it for the lack of stress over meals/getting up for breakfast etc. DH works 14-16hrs a day, and even gets called into meetings at weekends. Will likely have to step inside to work on the holds too - he needs to know that his ‘time away from work’ is relaxed.

AI also means all the activities are included, not just food - we can all go to spin/yog/pilates/bodyboarding/tennis/sailing etc without worrying about the end of holiday bill. And the Prosecco will be flowing.

All-inclusive doesn’t always mean shacking up at an AI hotel for two weeks. A lot of people book tailor-made trips where a travel company has taken care of all the details because self-planning is less straightforward (like a safari in Zimbabwe or a trekking holiday in the Himalayas).

Friends of ours went on a two week multi-centre ‘all inclusive’ safari last year, and iirc it cost in the region of 20-25k for their family of 5. They didn’t pay for it themselves, it was the grandparents’ treat.

We simply couldn't afford the mortgage to buy this house as first time buyers now

Same, people dismiss luck but I would be much wealthier if I could have bought in the 90s but I was at school.

people are also lucky to have generous gps & parents. Quite a few of my friends have asset rich families but they would baulk at spending 20k on a holiday.

Yeah I think this is it - we have a take home of about 10k and if I’d been told that ten years ago starting out in my career it would have been beyond my wildest dreams! However it doesn’t go as far as you’d think - car isn’t super fancy, we do our own painting and decorating to save money, mortgage is over £3k a month (only purchased recently so no lovely low rate mortgage), nursery £2k, other bills another £1-2k… I think the last few years have changed things dramatically and even as higher earners we massively notice the difference - I really feel for those who had less to cut out to begin with. I actually felt much richer on half the salary renting a £1m flat in London a few years ago than I do now believe it or not - that was when I could splash a bit on clothes and holidays. If we’d been ten years older and made the exact same moves we’d probably have been laughing by now just from property price increases. I still feel very privileged in the grand scheme, but in no way wealthy and worry about money quite often because job loss would be a big problem.

Being exceptionally lucky that I bought my first house in 1997 for 32k at the age of 21 on a minimum wage office junior job. I earned 10k a year. It was tight but I got a lodger. When house prices had doubled two years later I was very glad.

Some people are not into animals which is fine but my dog is honestly the last thing I’d give up. Yes they can be expensive, but the joy and love she brings me is genuinely priceless.

Upper class are only aristos, and are we talking about the hol companies like Scott Dunn etc, these are the UMC faves when they go from my experience if not borrowing friends places overseas or going to their own? Not All Inc as in wearing a wrist band all time etc. Bespoke hols are more UMC I'd have thought.

@LongFacedRat I have no problem in admitting we have just been lucky and benefitted hugely from being in the right place at the right time. We haven't actually done anything to deserve our good fortune. Young people today are unfortunate and changes in the general economic climate have greatly disadvantaged them. They are doing nothing wrong and it isn't fair that they find themselves in this position.

I do feel that we as a society need to address this issue in some way - by making renting better protected or doing something to help young people get started in home ownership. The current situation isn't sustainable.

Yes, the bespoke experience, agree, but 'all inclusive' is typically, as I see it, means you never pay for a drink at a bar on hols unless 'off list' which isn't typically UMC, Italian night, Greek night etc, entertainment.

Yes I know who UC are. And I know who I’m referring to when I mention them. I don’t work for SD but similar, and I can confirm every booking is bespoke, but many are still 2 weeks AI. Bespoke means not an off the shelf. We don’t have any AIs where you wear a wristband.

TBH we go on AI, and I haven’t seen a wristband since the algarve in 1999!! But only once would I have said we personally had a UMC holiday and that was our honeymoon.

In your typical TUI, Jet2, FC, etc yes that’s what you’d expect. But that isn’t the whole AI experience at all.

Thanks, @Elphamouche for this. I think what you describe as 'All Inclusive' isn't how I'd describe it, as you say, you provide a bespoke experience. Usually via SD etc, there's a bill at the end that depends on services at time e.g. meals, extra facilities. Set price meals etc, rare. The final bill, I suspect, often more than hoped or thought /I am thinking about summer hols though and poss more 'experience' hols run differently.

The idea of aristos spending 150k plus (!) on 2 weeks in the Med etc runs rather counter to the Mumsnet stereotype of elderly bangers and holes in the shoes :) Although poss not for the lifetime bespoke experience. Wrist bands are sometimes around at the top places I hear but in taupe tones and only for the one off extravaganza where they really lay the red carpet out and don't want any meandering plebs to get inadvertent entry. :)

Personally I avoid all inclusive because I am a miserable old misanthrope and I prefer self catering because you can avoid all those people! I even need regular breaks from my family on holidays

AI has a HUGE variation definitely :). But something I’ve learned doing this job is EVERYTHING varies massively. No two holidays are the same, even if they look it on the face of it.

It’s fascinating and I love it!

@Elphamouche thinking on it at some upmarket health resorts you are spot on, but even the additional costs can be eye watering so def not all money upfront. Again, this is more the experience holiday . I think in normal parlance people see AI just as you describe, TUI, that's the stereotype and norm.

@Elphamouche sounds like an interesting job. Are the clients demanding?