To wonder where all these peoples spend there money?

[choiceofwords]

I have a household income of around 50k. We eat out regularly, nice and quiet neighbourhood, DC always in nice clothes, run a nice car, save a little.

I am quite a big spender and not great at watching what I spend so I don't feel comfortable because I'm careful with cash.

Yet people, multiple people on MN, often seem to start threads suggesting anything below much more than this is poor?

I really don't understand it.

I have friends on much less that still do nice things like go out and on holiday every year. Obviously the same won't be true for everyone on similar incomes but I just wondered where these 'anything less than 100k' tribes are coming from.

I've never understood the obsession with paying off mortgages early or even retiring young.

Paying off the mortgage early makes sense from a purely financial point of view for most people. If you're interest rate on the mortgage is more than you can can earn risk free by investing the money elsewhere (say by buying government bonds) then in the long run you wind up with more money in your pocket.

I'm glad we paid ours off early as we now have one in uni, one starting uni next fall and are trying to max out our retirement savings. All of those are much easier to manage without the mortgage payment.

@MissConductUS yes, I get the logic to it to a degree, and I suppose it depends on how much of your lifestyle you have to sacrifice to do it. But I have children now, I don't want to eat into my disposable income while I have 2 dependents, I want to make memories with them- holidays abroad, days out, great birthdays and christmases. The money is of much more use to me now than it will be in 10-15 years time when they've left home. DH and I are on quite lucrative career paths and we had children in our early 20s so I'm quite confident we will have the mortgage paid off by our 50s (and strong enough incomes when they get to uni age), but my priority is my family now (with balance, as I say we have excellent pensions, insurance etc). I'm not willing to compromise on their childhoods for us to have a more comfortable middle age, but that may just be a by product of us having children young.

bbcessex No, childcare and house take up about £1200, maybe a little less.

Which I suppose makes all the difference

@orangeteal that makes perfect sense for you in your situation. I had my kids late, at 39 and 41, so we were already approaching our prime earning years and had enough income to give them a very full childhood and pay off the mortgage. And a lot of the payoff came from selling our first house at a huge profit and rolling the money over into our current place in a less expensive area when we stopped commuting into New York City. The real estate market here was on fire in the early 00's. We're further away from the city but work locally.

One downside of having them so late is that we can't retire until they're out of uni and on their feet. University fees are so much higher here that getting them both through without any loans is going to be challenging. I wish I had had them earlier but my first husband was a jerk and I'm glad I waited for number two.

I do hope I wasn't coming across as somehow being critical of your choices. I think you're being very sensible and doing what's best for your family.

@MissConductUS oh no of course not, and I wasn't criticising those who do pay their mortgage off early, just raising that although it sounds ideal I wouldn't put pressure on myself to do it as it puts unrealistic expectations on some families, especially given the cost of housing these days. I think I'm just justifying it to myself really haha, the risk of course is always you don't what's round the corner if something happens to one of us and our income changes we have a big mortgage still, but I suppose we all take some kind of risk one way or another.

We probably should think ahead to the uni years though, it's only 10 years away, and it doesn't sound cheap!!!!

We have 2 at uni and it certainly isn’t cheap! It costs us £1000 per month (£12000 a year) and they’re at home with us for 5 months a year.

We probably should think ahead to the uni years though, it's only 10 years away, and it doesn't sound cheap!!!!

It'll be much cheaper for you if you're in the UK than it is for us. Most unis here are private and don't get any direct funding to offset tuition costs from the government. We've been saving for their uni costs since they were toddlers and it's a lot but nowhere near enough. My lovely MIL has been very generous with financial help too. We have special educational savings accounts here that aren't subject to tax on interest, dividends or capital gains taxes if they're used to pay university costs, so that's been our vehicle. We still have over a trillion USD in total student loan debt in the US and young people commonly graduate with large loan balances. If we can get them through uni with no loans that will be a big advantage for them.

We have 2 at uni and it certainly isn’t cheap! It costs us £1000 per month (£12000 a year)

Is that for both? I am green with envy. DS alone is about $44k per year and DD may be a bit lower as she'll get more scholarship money, but it won't be vastly lower for her.

It’s different over here, my DC will each leave with about 55k of debt (they are also doing a masters) and it costs us £1000 a month towards there living expenses.

@MissConductUS U.K. student loans are very different to US stent loans. You only pay them back after you start to earn a certain amount or more (I think 22k or 25k. Depending on when you attended) also they get written off after 25-30 years. They do NOT effect your credit score as they are treated like a tax rather than a regular loan.

Student not stent*

@choiceofwords oh as @bbcessex also thought, I thought you said In an earlier post that your mortgage was £900 and childcare costs were more than £800. Which I also thought sounded high given your lifestyle.

But must have got that wrong. Makes sense now.

So by comparison my mortgage and childcare costs in London for one DC come to £2.100 mortgage for a relatively small house + £1600 Nursery costs = £3,700 per month - which is a gross salary of £60,000 per year ignoring any pension contributions.

So clearly £50k wouldn’t even cover those basic items for us - with only one DC.

To be able to afford decent holidays etc you are looking at a joint income of at least £100k in London I think (to be honest much more than £100k). Wouldn’t be able to afford private school or a horse on £100k though!!

But it is About choices - Our jobs are very specific and Only exist in London

Its because, i have noticed, that a lot of people like bragging about how much money they earn yawn

The motivation for me to pay my mortgage off is down to losing my home when i couldn't afford my rent with ex p (who wouldn't pay a penny into the house and I got made redundant). I never want to be in that situation ever again.

@Lipperfromchipper They introduced very similar loans here in 2014, but the total available per borrower under those terms is fairly small. Earlier loans had to be paid off in 10 years after graduating.

There's another new loan type that can be forgiven after 10 years if you work in public service or for a non-profit organization, but it's a big snafu. The government contractors who manage those loans keep rejecting the applications for forgiveness for idiotic reasons and it's caused a political scandal and much huffing and puffing.

I was able to graduate debt free and I would really like to be able to offer the same to my kids if possible.

@MissConductUS yes I was very lucky to be educated in Ireland where university was free (at the time) all my parents needed to pay was my accommodation (and I am very grateful they did) I also had a weekend job which I used for food, clothes, books and travel. I was actually then paid to do my teaching certificate. 😮

It's so good to know that there are families on average income and find it quite comfortable. There are days when I struggle and wonder how others with lesser income manager, but clearly they do and maybe better than I. I earn over 100K, my husband sadly doesn't work, we have 2 kids that require a part-time nanny (schools in UK only work till 3:30 and no full time job that pays well finishes at that time!). We have a flat (not a house!), I cannot afford private schools, and after paying mortgage, bills, taxes, nanny - I barely have any left as disposable income, believe it or not. No car. We can only go on holiday once a year, and that comes out of my bonus money. If there is no bonus - no holiday. I also cannot afford frequent weekend activities for my kids like many other parents do - theatre, entertainment, zoo trips - it just gets so expensive. I rarely ever eat out for lunch or buy coffee, so it's certainly not the case of just wasting money on small "luxury" things. We don't eat out or do take aways much either. Also, being branded as a high earner, irrespective of the fact that my sole income supports the whole family and I get no respite, I also pay the highest amount in taxes and am not entitled to ANY tax breaks - no childcare, no additional nursery hours (only the 15 hours), the rest I have to pay for, etc, etc. So my take home after-tax cash is maybe less than someone earning slightly less just under 100K. So there you go!.. Enjoy your lifestyle, clearly having more money does not equate to better lifestyle or happiness. :)