to have assumed that a 100k salary in London would mean we would be more comfortable than we are?

[Baydreams]

I've been prompted to post this after reading the post about high earners and the two schools of thought that 100k either "isn't that much when you live in London" or "It's a lot compared to the average national salary". That post is here: www.mumsnet.com/Talk/am_i_being_unreasonable/3561649-To-ask-those-who-have-high-earning-partners?

So, the backstory is that we started a family unexpectedly in our early twenties and abruptly adjusted to a household income of £26k, living in London. We stuck to a grocery bill of £40 per week for a family of three, and never spent a penny on small luxuries like coffees, clothes, haircuts, etc. Even so, our household income wasn't enough to cover our mortgage (£800 per month and cheaper than renting), and all the usual bills and outgoings. We slowly sunk into debt just to cover a pretty frugal standard of living. After 5 years, this debt was at £25, so essentially we needed to earn at least 30k to even out our costs.

During the last year of this, my partner landed a higher paying job, and our area of London had had a bit of a boom, meaning we could afford to move our family out of our flat to a 3 bed terrace house in the same area, taking some of the equity to zero our debt.

Over the next years, our household income grew to around £100k, give or take. (My partner has a commission based job so we never quite know what the exact figure is going to be, but it's usually just over or just under 100k).

We live in one of the last remaining affordable areas of London. Our house is valued at £450k. Mortgage repayment is approx £1300 per month. No other huge costs apart from running one family car. We have three children. On a household wage of approx £100k, we can now comfortably pay our mortgage, and live a much happier day to day lifestyle in that I don't feel guilty any more about booking in a haircut or buying a coffee.

We are so relieved to be out of the hole we were in financially, and I don't see £100k in our area of London as a struggle at all - there are many people earning less where we live.

But, I will confess to assuming that it would mean we could afford more than we actually can in reality. For instance, we have found that we aren't able to accrue any meaningful savings - maybe £150 a month which tends to get eaten up very quickly as an 'emergency costs' fund. And holidays abroad are beyond us. We tend to be able to save for one once every three years and the other years we do UK camping holidays.

Previously to earning £100k a year, I did assume that holidays and savings wouldn't be a problem. How do other people with similar earnings and outgoings make it work in terms of saving for luxuries like holidays etc? Do you find you can comfortably afford to save AND go on holiday? Do you substitute one for the other? Do you find it easy enough to live on 100k or do you find it a balancing act to cover everything you would like from your lifestyle?

he travels to countries that only except certain cards, so usually he has to have a rotation of 3 cards

I find that really surprising. I’ve travelled a lot and haven’t yet come across a country that doesn’t accept Visa and MasterCard. I’ve had a MasterCard debit card refused in one country but that’s it.

You seem to have a bit of a DH problem - what places does he go to.

The halifax clarity card by far is the best one to travel with due to no conversion fees. And he should be sitting down after every trip with his expenses and put them through - you need an accounting system.

How do you use the airmiles - because if he uses them on his trips why? As his company should be paying for them. And if you arent using them what is the point of an airmile card?

You are missing some serious tricks here - because on that income we happily go away twice a year and have plenty of after school activities etc. Yours is simply a mismanagement issue (and unwillingness on the part of your DH to do so)

I haven't RTFT but I think you're struggling on two counts - childcare and the fact that your take home pay is only a little over £60k a year and for a family with small children in London, that’s not much.

It will get better though.

I don't feel guilty any more about booking in a haircut or buying a coffee

I think that this is why. We've been broke and more recently better off. When we had no spare money the above things just weren't on the shopping list and as for holidays, we didn't have one for years - now that we have more slack we spend it on stuff like that and much to my embarrassment I don't save half as much as I should. I think most people tend to spend what they earn and adjust their spending habits to match their salary - we certainly do.

Our combined income is a bit less than yours (about 92k combined but we still get child benefit).

Our combined gross income is just over £70k and we don’t get child benefit because DH earns over £60k of that. (Shows how fair THAT system is!).

We live in London (not central) but have paid off our mortgage. We don’t have childcare costs but pay around £350 a month towards DDs uni living costs.

We actually feel VERY comfortable on that income at the moment and most of my paltry earnings do go to savings. Even if we had a mortgage £100k a year would feel like a LOT of income.

The only way for me to spend less is to make less money available to spend. Until a few years ago I was a PhD student earning just above minimum wage, now I make twice as much (after tax). My strategy for balancing the ability to have a more comfortable lifestyle now while also saving for holidays and emergencies:
(1) Budget how much you/family need to live a very basic lifestyle with no luxuries (maybe £2500 in your case?).
(2) decide how much you will allow for living a comfortable rather than basic lifestyle (£1000?).
(3) Save everything else. Put money into a savings account right at the start of the month and then use the remainder to live off. The more money you have for everyday expenses, the more you'll spend (at least I do)
(3b) Consider opening 2-3 savings accounts. Husband & I have three each: joint one for occasional essential/emergency expenses (new boiler, car, etc.); joint one for fun occasional expenses (holidays) and a personal one each with no specific purpose. By being clear what we can use these accounts for we don't end up mindlessly spending our savings.
(3c) Consider choosing a savings account with limited withdrawals to make sure you don't withdraw money unless absolutely necessary.

Our joint income is about £80k and we only have one DS, we live in the South but not London. We have a reasonable standard of life and are able to save, but we can't have fancy long haul holidays multiple times a year, new cars etc. I don't have to worry about things like posting for nappies, and can afford DSs activities and to save for him monthly, but we don't eat out often these days and don't spend much on clothes etc, we're both more likely to shop Primark/H&M than designer and I get my hair cut for £30 and I'm not a fake lashes, tan, nails type person so no expenditure there. To my DF he thinks our joint income is large but the most his/DMs mortgage ever was was about £350 . Childcare for us will be expensive one I'm back at work £85 a day. I am however an avid planner and saver so we don't have debt other than our mortgage and we never run out of money before the end of the month. Other than now when I'm down to SMP we save every month too, so I think we are comfortable but can't live an extravagant lifestyle, our salary isn't much less than yours especially given you have 3 DCs to fund not one.

Also food out , coffees, meals etc is so expensive. Even pizza express for five people is at least £60. Two drinks in pub at least a tenner

You need to sit down for two months with a spreadsheet and write down every single penny that you spend.

On your income you ought to be able to save £1000 per month easily which is a really nice holiday and comfortable savings.

We’re same family, area outgoings and only one income of yours and we manage

I travel lots & I've never had my credit card declined & I can take out cash at ATMs for no extra charge, I pay it off each month, so no extra charges to pay. Is it being paid off every month ?
This has been discussed before if you are not working FT, are you claiming your full National Insurance credits towards your state pension in your name ? You can check on www.gov.uk & claim child benefit ( but pay some back)
Suggest you keep a log of all your out goings for a couple of months
Do you both pay into employee pension, because this is free money, if your employer contributes ?
Do you really need a car in London ?

Do you have a job?

Are you married?

@Historydweeb why are you being taxed when the personal allowance is £11500 a year? You surely shouldn't pay tax on anything less than around £950 a month?

Just saw the personal allowance has actually gone up to 12500!

Thanks to all offering advice on my situation. ( sorry to derail briefly) I have no idea why I'm taxed when so far under the threshold, I've double checked with my employer and they have said I'll get it back at some point as a rebate. That's not much use right now but I will check with HMRC. Thanks again

OP try spending a couple of months where you note down everything you spend. Every £2 here and there. Everytime you do a top up shop of milk and bread (but end up spending nearly £20).

I couldn't work out how we weren't better off then we spent 2 months writing down everything and discovered that my shopping budget was nearly £200 a month out. The kids activities budget was £50 a month out by the time I added on cinema because it rained or soft play for someone's birthday.

Also if your DH is getting in a muddle with his expenses and not claiming them back then it's probably undoing any savings with the air miles. We found it was much easier on the budget for DH to have two cards purely for expenses. Especially if you can get a 0% card that means if his employer are slow paying back you can just pay the minimum rather than impact your own budgets.

I've always found that it's the little amounts here there and everywhere that trashes my budgets. To the point for a while I took out travel and lunch costs in cash as popping everything on cards is just too easy!

Historydweeb my friend was on a salary a couple of K more than me, but always seemed to be incredibly skint. She once mentioned in passing how much she got each month after tax. I said ‘hang on... that can’t be right?’ It was less than I got, even though she was earning a bit more.

We ended up sitting and comparing pay slips and she was paying hundreds more in tax than she should have been... and had been doing so for two years! She called HMRC then and there, and they told her she was due several grand as a rebate. I have never seen someone cry tears of joy quite like that before.

I think HMRC had to contact her employer and update her tax code or something, so hopefully they can do the same for you and get it sorted!

I can see why you want to use cards because of airmiles, but I think your DH has been too ready to say he needs three cards. Visa and MasterCard are accepted everywhere I’ve ever travelled.

Get yourself the You Need A Budget app and start noting down everything you spend. You can create a category for DH work travel and see if his claims match the spend.

I suspect your DH is spending more on himself than you realise. I have male friends who earn similar amounts to you (in fact more) - one seems comfortable and the other not. The one who isn’t thinks he deserves the finer things in life because he works hard and deserves it - pret lunch, after-work drinks at a city bar, expensive shirts and shoes because he needs to look good for work, coffee from a store. He fails to realise that London living is expensive and what seems like a fantastic salary doesn’t go far when you have a family with associated housing and child-rearing costs.

Could your DH be like this too - particularly if he’s travelling and thinking ‘oh I’ll just grab another coffee / newspaper/ go for a drink etc’ that he doesn’t claim back?

OP "It's complex, and the only way I can think to keep track of everything is to sit down once a month with him and go through every single account"

well, yes. That's key to keeping track of spending and saving. Or use an app, whatever works for you.

You need to track your spending better, I’ve just bought a flat so i’m now tracking mine properly. I earn a little bit more than you, below is my average monthly SOA.

Mortgage £1,900
Council tax £260
Utilities £80
Childcare £840
Groceries £90
Phone £45
Internet £24
Sons clothes/shoes £50
My shoes/clothes £100
Going out £150

Thats about £3,500, obviously doesn’t include repairs, one offs etc, I’m selling my car so i haven’t included insurance etc.

Ah posted post instead of preview, £90 is my weekly grocery figure, not monthly!

Having done the Money Saving Expert budget spreadsheet, which includes way more than the basic household costs like how much money you spend on birthday presents each year (we have a stupidly large extended family), it's worked out our monthly spend as just over £4k. So, that explains the money hole...there isn't really much of one. I've just been shit at really knowing our budget in the last couple of years.

Can you agree to cut down on birthdays especially for adults?
It is a heck of a lot of money and seems excessive for extended family.

We only buy for children now and immediate family at that.

I can imagine 100k in London wouldn't go that far. We're at just under that but in the North West so much lower living cost. Mortgage is 600 pounds approx however childcare is about 800 per month. We have 3 children too. We are comfortable enough to have a bit of saving and a few nice holidays but we're not wealthy.

Bugger - if you're comfortable enough your DH could put more into his pension and you can get child benefit that could be worth it? My husband is technically on 58k approx (depending on bonus) but I've increased his pension contribution to get it to 50k so we keep CB. I'm on 45k.

I'm surprised by the credit card comment. I travel a lot for work. Visa is accepted pretty much everywhere. MasterCard is also widely accepted. My corporate card is visa and I've never had anywhere abroad refuse it.

When I had loads of expenses I used to save by putting the expense payments directly into my savings, and only keeping payments for e.g. hotels and flights in my current account. So I effectively treated most expense money as spent when I spent it and the repayment of it as a bonus.

I would also look at getting another, different reward card (and possibly a separate debit card if he has to go to countries that don't tend to accept credit cards?) And then use those. Or even two if he needs a variety. The key thing is that personal expenses shouldn't be going through them.

Or alternatively if he likes the current system, just get one new card/account for your and his personal spending?

I was catastrophic with receipts so had to have a set up where I just put everything for a given month into a folder, work related or not, and then sat down and went through the whole lot once a month.

I also think "pay yourself first" is a good way of saving.

I pay £575 into savings, £150 overpayment on the mortgage and all my other bills on the first of the month. £175 of that is "short term" and covers things like car insurance and car services, any other annual payments. I don't do a separate holiday fund as holidays tend to be pretty bargainacious but if I was your family I would.