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?

A season pass for the tube (or even all London transport) is about £200 pm, comparable to elsewhere, but the big difference is that for a lot of people they don't need a car so this is all their transport costs.

Isn't the bus in London £1.50 and free for DC? Elsehwhere it's much more expensive, you have to pay for DC, and public transport in many areas, even cities and suburbs is so impractical that a car is almost always a necessity, so extra costs there.

@Baydreams a few options to save jump out at me.

I am owed roughly £1k per month in expenses. I view the money spent as 'gone' and have expenses paid back into a separate account to cover holidays, weekends away, towards birthdays and Christmas etc.

Cut back on gifts for extended family... it's not needed! Speak to the others, perhaps £20 on children only.

You have already said you survived in much less, be frugal but for fun.

I think this thread is a good example of however much money you earn you never feel it's enough. A lot of people on this thread can only dream of earning £100,000. You are now in a comfortable position - better off than you were before - but you still don't feel rich because of the things you can't afford (never mind that you own your own home and can afford to have three kids). If you want to know where your money is going I suspect the clue lies in this sentence: 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. With a bit more cash, you've stopped watching the pennies and so the pounds are flowing out of your account. I do think there is a danger in comparing yourself with others though - there will always be someone with a bigger car than you and going on a better holiday than you. Lots of people think nothing of putting these things on credit cards and having big debts - they don't even really think of it as debt, it wouldn't occur to them to save up and pay up front. No advice really except to try and appreciate what you've got and if you feel poor then take a look back down the ladder to see how far you've climbed rather than looking higher up because there really is no top to that ladder.

@cushellekoala - that's a fair point but on the tube, I travel 6 miles return for £10/day. I imagine you're going much further?

The real issue is the cost of housing, childcare and variables in London (building work, restaurants). We went to a nice pub up North and paid £50 for 4 dinners and dessert. That is unheard of in London unless it's Wetherspoons or similar.

But the Home Counties are as bad if not worse. They get the London prices without actually being in London. Surrey and Hertfordshire are basically extensions of London in terms of housing prices.

This may be a daft question, as I have no idea how expenses work, but I do know that Amex charge a foreign currency surcharge on every transaction made abroad. Does your husband get this paid back with his expenses?

I do the whole avios thing (airmiles). Companion vouchers are good, there is no denying it, but you only get the best value for them when using them for business or first class long haul. If you're only using them for economy long haul, they'are a total waste, as you will pay more in taxes than you would if you just picked up a cheap cash fare. A lot of long haul routes only have 2 business class seats for avios redemptions per flight, so can also be hard to make use of them for family flights. If you don't follow it already, then head for points is an excellent website with excellent tips for how to maximise your avios, how best to use them, and also does a monthly review of the best point earning credit cards. The rules for Amex have massively changed very recently, meaning they are no longer as good as they were for earning points.

We live a 45 min train journey outside of London and commute.

We pay £485 per month each on our season tickets and £85 per month on car park.

If you work in London there are often a lot of extra costs involved.

We moved out of London 13 years ago. Our son has stayed on, committed to work that at the moment, can only be done in London. He and his partner really struggle on a combined income of around £50/60k. A one bed flat they pay around £2k a month - having worked out that although much cheaper further out, the commuting costs make it an even equation. They don’t smoke, rarely drink or eat out. The gym is their only luxury.They would be thrilled to see £100k coming in.

Just let me get my violin out, your husband only earns four times more than my husband and I'm sure your living expenses aren't four times more for everything! They don't charge you more for bread or milk in London and I'm certain you don't get any premium gas or electric either. We have 4 kids and still manage 2 holidays a year, they're UK ones and we self cater but still, I see no logical reason why you'd think 100k is peanuts. Some people are just on another planet!

But your taxed really highly
You do need to gollow the advice are you putting max away on pensions etc
You need to ho over your finances out goings as well
A tenner here a fiver here all adds up

Eurocamp holidays are cheap. Way cheaper than CentreParks

I posted on that first thread that £100k is about £66k after tax and about £6750 9% graduate tax then could for some be taken off that then about £20k for each of 2 toddlers in a London nursery full time which leaves you with about £19k which is less than the London benefits cap!!!! which you get for doing nothing at all.

We need to get tax much much lower in the UK and provide many fwer state services. It has become very unfair on higher earners. Never in Btitish history have thei borne so high a share of the tax burden even in the 1970s when upper tax rates were higher but people had more reliefs such as for mortgage interest, for covenanting money within a family, more pension tax relief, child tax allowances, married man's allowances.

All I can recommend to women on £100k is try to double your income and more as then even though the staet will fleece you of 47% tax/NI plus 9% graduate tax for some and you wno't get child benefit or a single person tax allowance or tax vouchers etc for childcare at least you will have more money.

The state doesn’t “fleece” anyone. If anything taxes are far too low. We might have a decent NHS if the rich - yes, @Xenia, looking at you - weren’t so resentful at paying their share out of money they can well afford.

I think there’s some confusion over earning £100k and having £100k coming in. If you earn £100k, you only have about £60k coming in, as Xenia says and that wont go far in London for a family of 5 with no benefits. I think the average UK household income is only £40k (including benefits).

And @Xenia, any tips on how to earn over £200k gratefully received! Sadly, I’m not a lawyer.

We have a joint pretax income of about 55k. There are five of us - three dc and two adults. We live in London and manage fine. We don’t have to pay for childcare any more, though. We don’t get any benefits.

YABVVVU. I don’t live in London but we have a similar household income with mortgage payments of £1,600 per month and 2 kids in nursery costing £1,500 per month. We don’t live particularly frugally and still save enough for one family holiday abroad each year plus one UK break. Where on earth is your money going!?

Unburnished - Median households UK income is £28k - not sure where you got £40k from...

OP - we have a pre-tax household income of around £75k, with 2 DC in London (also in one of the last remaining ‘affordable’ areas). Our mortgage is about half yours with no over payments and we have one holiday abroad each year plus UK breaks once or twice a year.

Our childcare is only £300 per month as we get 30 hours for one and just do after school club for the other.
We do get child benefit as income is split between me and DH but have never qualified for tax credits.

We have a very strict budget, that follows the ‘envelope’ system - which I believe is similar to the YNAB system - i.e. everything is allocated to a specific budget, that is worked out annually (so we put aside a certain amount each month for Xmas, birthdays, holidays, clothes allowance etc)

We are definitely not rich enough to be able to spend mindlessly, we account for every penny (and also put some in our own individual spends accounts for frittering money each month.)

£100 PA isn't that much. It's mainly people who don't know people who earn that amount who think it is. Don't get me wrong, it's a great salary, but it's not "rich"

Xenia, what's really rubbish is the unofficial 60% tax

To me this is just about 1. keeping tabs on what you are spending and cutting the excesses for a specific purpse (so you understand the no coffee means a holiday type of thing) and 2, Getting DH to subscribe to the action as well and 3, Truly understand where your money is going and DECIDING what you want to spend it on.

Many mnay people let money dribble through fingers and then complain about never having any

We have a joint household income of around 100K, two children in private schools (no reductions), two cars, mortgage of £1000 per month and no debts. We have a holiday abroad every year. So no, I have no idea why you find yourself struggling as your outgoings would appear to be much lower than ours.

Unburnished - become a recruiter 😝
£100,000 self employed income is also very different from paye. I’m about to take a contract for £25,000 for 6 months after petrol and childcare I’ll have £50 left over. The world has actually gone mad

MandalaYogaTapestry - you have two tax allowances, op has 1. There’s £11,000 straight away

I don't think OP is being at all unreasonable (although I haven't read the entire thread). It didn't sound like she was saying "OMG poor me I can't get by". Seems more like she thought on 100k they would be living a fairly luxurious lifestyle and they're not. She's right to be fair. When I was little, one reasonable high earner (solicitor, doctor, city worker) which would be about 100k a year in today's money would be able to buy a house in zone 2, private school fees etc. Now that salary wouldn't cover that. As someone within that income bracket I definitely don't think we're the people anyone should be concerned about. Life is not difficult and it's bloody hard for people on lower incomes. (I'd be more than happy to pay more tax personally) but it is a fact that you get less for your money now than you would have in the past.

We earn £80K between us, childcare is £500 a month and mortgage is £1200, we go abroad every year (with 2 children), I save every month at least £150, bear in mind this is the same as when we earnt less and childcare (£700+) and mortgage (£1400) were a lot more, we also spend £100 a week on food - you must be wasting money somewhere!

Just let me get my violin out, your husband only earns four times more than my husband and I'm sure your living expenses aren't four times more for everything! They don't charge you more for bread or milk in London and I'm certain you don't get any premium gas or electric either. We have 4 kids and still manage 2 holidays a year, they're UK ones and we self cater but still, I see no logical reason why you'd think 100k is peanuts. Some people are just on another planet!

I agree. But we're just jealous, or something