money - where does it all go?

[denimdouble]

Hi,

So before I start, I know that we are fortunate and that so many people have it harder. I am just fed up of everything being so expensive and that so much of our money is tied up with bills and essential spends.

We both work hard in decent jobs and our joint take home pay is £7400. Today I have calculated that after every last thing that we have to pay we are left with about £1800 each month. This is essentially the money that we can use for holidays, days out, fun stuff etc.

We do have some debt that we are paying off, however this will end in about 18 months so this will make things easier. Our mortgage ends in 47 months which will make a huge difference to our lives.

I don't want to sound ungrateful or tone deaf as I am not, however it's awful to see that so much of our income is needed just to stay afloat.

Anyone else feel that same?

MN doesn’t have an issue with high earners.

It does have an issue with them bitching and moaning about how much they’re struggling when they have an average salary left over each month “just for fun”.

Unless you cannot afford to feed yourself, I think these moans about not being able to live like we're rich should stop.

@denimdouble you will have no mortgage by mid 50's, you have pensions and £1800 to do nice stuff with. You work no harder than anyone else, have no more challenges than anyone else, so stop moaning and be grateful. You are far luckier than many others.

Our income is about £4500 a month. If you'd have told me 10 years ago we'd be bringing home a grand a week

Die to inflation you were probably bringing home similar 10 yrs ago.

50k in 2020 is the equivalent to 63k today.

You've answered your own question really. You were irresponsible with your money previously and now have debts to pay off. That won't be helping. Your fun money is fine, so not sure what the problem is. I'm sure you'll have more once your debts are paid off

We have around the same income as you and feel very fortunate, and don’t feel as if we don’t have enough to be able to enjoy ourselves. We have 25 years left on our mortgage though.

I think it's ok to discuss the fact that money isn't going as far as you expected it too or how our lifestyles are so different from parents etc. It's also ok to ask for budgeting advice. The OP is being disingenuous though.

I'm not, actually. I have survived on next to nothing and have been bankrupt.
I just don't allow envy to stand in the way of critical
I am not the idiot here I am afraid.

This 100%
Well said

I appreciate that it is possible for life to become very expensive. But much of that is making expensive lifestyle choices.

The more expensive lifestyle choices people make, the more of their hard earned money needs to be used to fund it.

DH and I still live in the same house that I lived in as a single parent and now have no mortgage, low bills and savings.

We have a much higher joint income that I previously had, we don't have an expensive lifestyle and decided not to buy a bigger house, even though we could have done.

Even with 2 DS (one at uni) after all bills, food, house/car maintenance and holidays paid for we have £3300 of our £5500 joint monthly income left to do what we want with, most of which we save (into pensions).

But this is because we have chosen a cheaper lifestyle, with a smaller house in a cheaper area without feeling the need to do expensive things all the time.

I don't think my DS have been any worse off for it, DS1 is at a Russell Group uni and DS2 is currently doing A levels and has an offer from Cambridge. They didn't go to private schools.

It is possible for you to have more money left over if you want it, but you would need to remove some of those expensive lifestyle choices and in a sense 'downsize your life'. Only you know what they are and only you know how important it is to you to keep them.

The reason I have never wanted an expensive lifestyle is because of what is required to sustain it. I would much prefer a simpler, more affordable lifestyle that I can easily sustain on a low income. Then any extras are a bonus.

I particularly enjoyed yesterday’s thread about whether OP could claim UC for housing benefit depsite having £135k in the bank and £50k of house equity once the sale went through.

Whatever your income, people generally live within their means. So proportionally your spend profile is likely quite similar to that of many other people on a range of salaries. Obviously as the low end of the spectrum where people are being squeezed they don’t have the luxury of the headroom you have. If you genuinely want to increase that headroom it takes effort and needs some discipline but there are some easy wins like automatically transfer money from your account on payday to savings so it isn’t available to spend. You can also set yourself a rule to maintain a certain balance in your current account at the end of each month. If you drop below it you reduce spending until it’s topped back up next month. This is what I do.

Yeah I know, it’s like these fraudsters don’t realise they are asking the people they are stealing from. My favourite are people piling on to tell others how they can scam extra money. Don’t you worry, you stay at home on your benefits calculator, whilst the rest of us grind away paying tax.

What does 'tone death' even mean? So often spouted on MN to shut people up. What income must posters be on before they can post on this subject? Isn't it important to understand how issues impact all demographics of society? OP will be wanting to discuss this from their POV. Why shouldn't they?

And I'm certain they don't need it pointing out people have it far, far worse. Likely they're not an idiot. Why must posters caveat every bloody post on MN?

I’d be using the “fun” money to pay off the debt then overpay on the mortgage. You’ll have a huge amount of fun money then.

Or maybe we just need to stop low income families from seeing the state as a cow that needs milking? I’m happy to prop up my lifestyle choices (private schools, holidays, mortgages), but not other people’s. You make your choices, you sustain your and your families lifestyle. Universal credit isn’t a lifestyle choice, it’s a poor excuse for the low motivation to work. People who earn well to pay their costs don’t owe you anything - not even an apology for doing well.

OP I don't understand what your problem is exactly. Are you saying you'd expect more "fun money" left over?

Our joint monthly income is very similar to yours. We pay about £3000 into a joint account for mortgage, bills, joint expenses and the save or spend the rest. If your mortgage payments are high then isn't that why you have less money?

£1800 is still enough money leftover and once you've paid off your debts and mortgage you'll have more?

That is young. You can both work to 65 . Extend mortgage term if you want more fun money .
Where does it say all mortgages have to be paid off by 51?
You have 21,600 a year to spend on holidays fun etc

That's 2 decent holidays and plenty more

OP will be wanting to discuss this from their POV. Why shouldn't they?

OP is free to discuss whatever she wants. And other people are free to respond and tell her she's being tone deaf if they want.

Moaning that you only have £1800 left a month for "fun" is obviously not going to go down well. There are ways to get advice or support that don't come across as quite so oblivious.

Yeah I’m single income household and I’d be happy if I had £1800 left over each month if I was in a dual income household.

I have about £800 left over once bills are paid but that’s before allocating any money for various savings. Realistically I have about £400 for fun money once savings are taken into account.

is the £1800 before or after you’ve put money in your savings? If it’s after you’re doing very well.

That wasn't really the point I was making.

Both DH and I work full time and earn what we consider a decent income. I have always worked, including when I was a single parent. We just choose not to spend most of our income on an expensive lifestyle.

The OP was asking why she only has £1800 left from a high income. The reason must be that she has made expensive lifestyle choices that she now has to fund.

It's fine for her family to make those choices, but perhaps might be difficult to see that it is possible to reduce the cost of those.

It is, it's about making different choices. It is possible to have a higher income and cheaper lifestyle choices, with a lot more left over to do what you want with.

I suppose they could have stated how fortunate they are, how harder others have it, and how they don't want to come across as ungrateful and 'tone death.'

I mean, if they want to come across as utterly bonkers, sure!

I do have more sympathy than most about these types of posts because I can understand why people who have 'achieved' high salaries expect to have a higher than average lifestyle as that is surely the point of earning more. Childcare costs are absolutely extortionate for some. And (generalising) houses in some areas are massively more expensive and salaries don't always reflect this.

My friend and her husband are high earners in London and I reckon just their childcare and mortgage could easily be 5K. She doesn't moan, her situation will improve as kids grow up and she knows she chooses to live there but I can see why this would grate on someone.

I think you need to reframe your expectations, OP. To be able to pay off your mortgage at 51 is an absolute privilege by today's standards. And whilst I'm slightly contradicting myself, I don't think even high earners should expect to over pay mortgages and pay childcare costs without noticing any sort of hit at all.

If your childcare and mortgage are obviously huge then you know where that money is going. If they aren't and you just don't know where it's going then I'd suggest using the Martin Lewis budget tool. It'll help you look at your outgoing for whole year for everything and not just monthly. I.e. includes budgeting for presents etc. Personally I think your disposable income is a lot tbh. And proportionate relative to lower earners (see first sentence).

Even if they’d done that they’d have been told off or told they were lying.

OP, you’re a HENRY (high earner, not rich yet). You’re doing fine- house with a mortgage, expenses paid, enough money for fun as well as essentials. You’re not going to be living like Imelda Marcos on £7.4k a month so it sounds like your expectations are out of whack more than your spending.

But it's not compulsory to always have a £60k SUV on lease and there's nothing wrong with buying a 3/5 year old car every few years, even a 10 year old car feels, looks and runs like nearly new these days.

This is what I meant by choice. Rejecting the perfectly decent norm of buying a 3-5 year old mid sized estate car that is kept until it is 10 - 12 years old in favour of a new SUV on lease every three years at twice the cost over the long term

But this is MN, where it appears that 'money struggles' are spending all your money on the most expensive version of everything and then complaining your money doesn't go very far.