High earners - how do you spend your salary?

[Citygirly]

DH and I earn just under £140k combined.

We do maximum pension payments (his is 9% as NHS) and we also give about 10% a month to charity.

Other than that, we plan to start overpaying the mortgage. We invest £1k a month (so £500 each) and save £1k for holidays. We of course do general/specific savings but then have a good chunk left over for disposable income.

AIBU to ask other high earning households how they tend to allocate their money? Just want to see if we could be using it better or this is about right for comparables.

Making it taboo to talk about earning well is not helpful. I earn ok and tend to think I should be grateful (and I am) and be satisfied with that - something a lot of posters on here would no doubt agree with. Well, I read a salaries thread on here recently and it gave me the confidence to ask for the pay rise that I’ve suspected I was due for a while. Not because the posters on there were in my situation, but because I saw that there are a lot of women out there on very good salaries. You don’t have to settle for ‘good enough’ because it’s greedy to have more.

I got it too.

We both put lots into our pensions to avoid paying higher rate tax. We also save about 1/3 of our take home pay, split between S&S ISAs for long term savings and cash savings allocated for holidays and house stuff. About half our take home pay is spent on bills, food (including veg box and milkman) and children's activities (we have 3DC, one at primary, two at secondary so spend a small fortune on sport and music lessons). Then we each have 'spending money', which is spent on fripperies like going out, books and clothes.

Well done! 👏🏽👏🏽👏🏽

Accountant/Management consultant at Big 4? City trader? Hedge fund manager? Not so unusual, they could have graduated at 21 so have 7 years' experience.

Our household income has recently risen to in excess of £300K. It’s an absolute fortune and we are fortunate but neither of us are motivated by money, rather doing well in our careers. We don’t come from money, quite the reverse. Neither of us feel rich because that’s our mindset. I do most of my shopping at Aldi and Home and Bargains. My new summer clothes wardrobe consists of a few new tops from Next. We have nice things but they are always given as special presents at birthdays and Christmas. We live in a house which is fairly average from the outside but visitors do always comment on how nice it is. Our car is fairly new but nothing special. We support our teenager (school and university) and contribute a substantial about to charity. I think most of our friends and family knew how much our income is they would be very surprised. I would hope that anyone who knows our story wouldn’t begrudge us. We have had very difficult years and turned to work as a way of coping with the challenges and it’s now paying dividends.

It's all relative obviously - Jeff Bezos obviously wouldn't get out of bed for 140k - but in real life (as opposed to MN) someone earning 140k (or 90k) would be in the top 10% earners, and in a lot of people's opinion, a high earner.
What expenses you need to pay out of that is a different matter. If you earned, for example 500k, but had a mortgage of 3 million and 6 children at private school, you couldnt pretend that its not a high salary!

I'm a lawyer. Google what NQ lawyers in London earn. Also google about the recent pay wars in the legal industry. That should satisfy your background check ☺️

Take away once a week local market for the rest of the food always free range quality meats. The rest is maximising salary sacrifice to get child benefit and reduce tax. Max the pension 40k a year plus 3k cycle to work. Company car salary sacrifice for my ev. Tax free childcare salary sacrifice, salary sacrifice gym membership and then some personal professional development learning. Means I can get my over 100k salary down to less than 50k. So I get full child benefit. After this I save into my Lisa and ISA to the max. I intend to leave full time work at 45 and altogether at 55, my hobby of gardening isn't expensive and neither is the model making I do.

The objections in this thread are not about suppressing the right to talk about salaries, or making the subject taboo. The OP isn't about salaries. It's about someone saying they have more money than they know what to do with, and asking people how they should spend it. Very different.

Ours goes on mortgage and childcare; we earn similarly to you. We don’t have much left after mortgage and childcare; with what’s left we pay all other bills/food. I put a lot pre tax in to my pension, but I don’t think of that as my money as it’s pre tax. DH still needs to sort his out 🙄 I also stick £75 a month in to another old pension of mine; we put about £100 in to DS’ savings account, and give about £60 a month to various charities and our church.

Whatever’s left allows us odd treats and outings, but we don’t have a lot left; for example we’re not going on holiday this year (either abroad or in the U.K.).

At your stage in life we prioritised paying off the mortgage as quickly as possible and my pension. DH was self employed then so focused on other investments. His earnings swiftly caught up with mine and then overtook them.

Prepare for the googly op. DS1 had chronic asthma and ENT issues as a baby. Back then mat leave was 6 months . I went back when he was 4 months albeit pt but he was ill so often I stopped working when he was 14 months. We had a couple of tight years until DH'S earnings accelerated having bought a forever family house before ds1 was born. Which you could do in the early 90s.

London is a different world; particularly in magic and silver circle firms. The op is entirely plausible. DS 27 has chums on similar.

£45k pa on school fees and music lessons coming out of after tax income sucks up spare cash quite effectively.

OP - DH and I both used to work for magic circle law firms and had so much spare money we didn’t know what to do with it. Having children in private education and taking on a massive mortgage quickly put paid to that!

Ooh, this was us at 27. It was an absolutely brilliant time in our life together. At that time we spent our money on:

Savings ( and I’m so goad we did, a little careful investing has served us well)
A flat in London and a country bolthole
Going out to restaurants, theatre, parties with friends in the same boat
Amazing holidays we will remember forever
Art and other lovely stuff

Enjoy it OP, you will look back and appreciate what a golden time this is. Make the most of it!

We are now in our forties. Life is still good, and DH is now a senior partner ( so immensely ancient and boring, a a no quite a bit richer). What we spend our money on now is completely irrelevant to your life, unless you are in the market for weekly psychology sessions for an anxious 13 year old, specialist cycling lessons for a dyspraxic ten year old and a profligate plant buying habit (DH)? Apart from that, we spend it on normal stuff; housing ( U.K. and France), school fees, private medical care, kids activities, really good food and wine, dogs, doing nice things with friends and family and visiting amazing places.

Enjoy being 27 and well off. You are very, very fortunate.

If takehome pay approx £3k his and hers £5k, less pension? Depends on mortgage and other commitments - nursery fees. In London? sounds, like a huge amount but may not be that much left I guess?

Plan on having a full-time nanny when you go back to work op and consider getting out to work locally or in industry. Those sorts of firms are hard to maintain an upward trajectory if you aren't 110% committed and available.

I didn’t say the subject was exactly the same, CockSpadget. I mean that some posters want to suppress any discussion of high earnings - not helpful because it feeds into the idea that everyone is on a low wage, it’s impossible to get a good job
and so on. As they say, you can’t be it if you can’t see it.

Also, if it’s always distasteful to talk about it, how are higher earners supposed to learn about money management? Especially as many have parents who have no experience of managing high salaries. Who do they ask? You don’t run to a financial advisor for every query.

Thanks @Citygirly !

Echos @LabradorsInThePond

You couldnt afford 3 children in private school and a mortgage of £3 million on £500k.

The schools outside London would be £50k and £90k inside.

Firstly that would exceed earning multiples ( I have just checked through 3 banks) and secondly the mortgage repayments would be prohibitive

@MattoMatto there are ways and means of discussing such subjects and educating yourself on the matter. Is asking strangers how to spend your money because you have more than you know what to do with a usual option?

@MNHQ could you move this into Money Matters or somewhere else more appropriate? Given that a lot of people are struggling to make ends meet I’m not sure we need a thread populated by rich people discussing what they do with their mountains of cash.

how are higher earners supposed to learn about money management?

Lol. Is that what's happening here?

Here's me thinking it was a load of rich people swapping notes on how to burn cash.

I earn c.£80k which sounds like a lot. But I live in London and can’t afford to buy a flat for instance, so I don’t feel rich even though I’m very aware I’m fortunate.

You can direct if my way, if your excess cash bothers you 😀