To think if you are a family of 4 and struggling on £100k…

[LetMeSpeak]

That it is purely down to mismanagement.

I saw a debate on social media and I also know a few people on 6 figure salaries, have extremely nice houses and cars. Yet complain that they are stuggling the same way others with less money. Aibu to think if you are really struggling even in this economy, a lot of it is due to mismanagement with your money?

It's all relative though isn't it? If you have the same mortgage as me and that salary then yes, maybe you're not budgeting very well but people tend to live to their means.

It depends on individual circumstances. We have a joint income of approx £75k ish a year
We no longer pay childcare costs and due to being on the property ladder for years we pay a mortgage of £900 a month on a 4 bed detached house worth about £450k
We go on holiday abroad once a year, can afford clubs etc for our 4 children and eat well and have enough to have a lovely Xmas and save etc
If we'd bought a house in a more expensive area SE for example much more recently we'd have a much larger mortgage and likely a smaller house
With 2 in childcare full time I imagine it would be perfectly reasonable to be feeling the pinch.
We were paying £55 a day for childcare for one child until last year but I know people pay a lot more
4 years ago we had 2 in childcare and it cost us a fortune. We had to add up our shopping as we went round Aldi and put things back
It's never as clear cut as seeing £100k a year and thinking people are loaded
Travel costs can massively add up too. We both wfh so save on this
It also depends how the income is split

Some people don't want to "downgrade" their homes, cars & lifestyles tbh. They can be oblivious that others cannot downgrade as they are already have the cheapest smallest home and car, no holidays or new clothes etc!

It depends where they live, doesn't it? A cost of living crisis will affect the well off as well. If their mortgage is £2000/month and they're paying nursery fees for 2 children at £2000/month as well, it takes a lot from their pay. A family earning £35k wouldn't have that high of a mortgage and would likely have child benefit and subsidies.

Not saying the family on £100k aren't lucky - they are. But they can also struggle financially as you can't simply lower your mortgage in many cases and childcare needs to be paid in order for people to work.

People live relevant to there income on so increases affect everyone
I think the problem is we look at our own lifestyle then imagine funding it in 100k salary and think u would be minted
people earning 2 and 3 time average wage normally have 2 to 3 times the outgoings

People on six figure salaries with massive mortgages could be in just as much trouble as those on low salaries. It all depends on your outgoings and how much spare money there is to cover rising bills/mortgage.

If their gas bills etc have doubled, mortgage rate gone up, food gone up etc and they already have substantial financial commitments then why are they not allowed to struggle like anyone else would?

YANBU but it’s easy to see how someone with a 100k lifestyle would be impacted by rising costs and might find it hard to cut back - it very much depends on their financial commitments. But ultimately they will have more things they can cut back on than someone on 30k.

Generally speaking, yes. There are people struggling by on much less.

I have a few thoughts on this.

Firstly if you are over-extended on any income then you are at risk when price rises come.

Secondly people on £100k who have problems with money do need to be mindful that it is likely they still have more options than those on lower incomes as they probably have more assets to sell.

Thirdly sometimes people used to a certain standard of living can be very stubborn about downgrading, this is obviously foolish.

@RandomMess but if a family on £100k was in a cheaper 3 bed terrace they'd get slammed for hogging a home for a family who can't afford the 4 bed detached newbuild.

It's all relative, people live within their means, very few live well below their means. And people would complain if lots did

Hugely dependent on circumstances. I live with my partner in my house (he contributes but earns less and has no financial claim on my property, so essentially my tenant) which brings my monthly income inline with an approx £70k salary. My mortgage is huge after buying out EXH but I won't sell as I bought it cheaply compared to current market prices, so would be downgrading for basically nothing.

Food and living costs are what they are. Everything is increasing. My dog costs a fortune in special food and inflated insurance costs (not something I predicted but have to manage) and I still run a budget spreadsheet monthly. My utilities are out of contract in December which won't help. So yeah on paper things should be easy, but they're not - it's circumstantial however, and not mismanagement.

YABU massively to be judging and benchmarking. Chip on shoulder.

Focus on your own finances, other people on 100k or more are none of your business, stop counting other people's money or analyzing other people's budgets, it's rude.

It is relative. We have a joint income of £75k pre tax /student loans and our mortgage (bog standard 3 bed semi) and full time nursery costs are just over half our take home income. Necessary bills like Council tax, energy, mobiles (sim only), internet and commuting are another quarter. We aren’t going to starve but we don’t have some luxury lifestyle. We shop at Aldi, buy clothes on eBay/Vinted, holiday cheaply in the UK 1 week a year. We have a couple of hundred left each month which is paying off the necessary roof works we had to do.

But that’s a choice, they could choose to keep their outgoings low?

Er, no they could not be in "just as much trouble" ffs. They have the option of moving to a cheaper house, selling a car, not going skiing. Those at the bottom do not.

But why would a mortgage get a family of 4 in such a bad financial situation. What type of houses are they buying?

i can understand if you are in London. But I’m from the north and people with 100k salaries and the averaged size family sometimes even smaller claiming their struggles are similar to others earning much less just doesn’t sit right with me. Buying a 5 bedroom house for a family of 4 isn’t “living within your means”. Why would you buy such a big house and then complain when it becomes difficult to pay for it.

I also think there needs to be more talk about student loan payments in this cost of living crisis. Over £300 of my net pay goes to my student loan. I always find it funny when older generations say oh but you borrowed that money. Yes to pay for something that was free for you!

I know the tweet that started this debate, and it’s ridiculous. She was essentially saying “people on 100k can also budget terribly, so don’t assume they’re rich.”

Again it's all relative.....they tend to have higher mortgages, higher gas and fuel usage due to said bigger house ect ect

We have a little over £100k coming in and we have loads of spare money (sorry!) We’re financially risk averse and have always lived within our means and not taken on financial commitments (other than a modest-sized mortgage).
We don’t have childcare costs though which I understand can make a big difference

I don't think £100k is a huge amount for a family of 4 to be honest, they shouldn't be struggling to pay the bills but will probably have to budget pretty carefully in other areas. Definitely not living a life of luxury.

It's all relative as PP have said. It's not always due to mismanagement - households on high incomes tend to have lifestyles to match. Regardless of whether people think they'd be rich on 100k (it's easy when you're on 20k to think 100k would solve all of your problems when you've got a 20k lifestyle) but people don't realise its lifestyle creep, people don't start on 100k normally - it's taken promotions and years, so gradually they've got a lifestyle to match the earnings. They'll probably have larger mortgages, cars that cost more, perhaps subscriptions etc and their bills will also be increasing. Doubling energy prices impact everyone, paying 100% more on your bills and 20% more on your food shop impacts everyone.

It's not really mismanagement when no one can predict the future, I wouldn't tell someone on 20k with a lifestyle to match that was struggling due to interest rate rises, energy bill rises and food price rises they were struggling due to mismanagement. Similar to someone on 100k with a 100k lifestyle. They might have more to cut back on (potentially!) but that's not always quick or possible.

What is difficult to understand about this?

People start off in jobs, maybe flat share, rent, buy a small property. Move up the ladder at work, start a family, buy a bigger house, bigger mortgage, bigger outgoings, more treats because they can, holidays etc. then interest rates go up, cost of living increases, and everyone has to start cutting back. Apart from the seriously wealthy I suppose.

It's all relative. And it's personal. My £2k a month might not pay someone else's mortgage, let alone all the other stuff. My £2k a month might sound like millions if you only have £1k a month. My £2k a month is increasingly smaller and smaller as the months go by. So, whilst I have a nice 4 bed detached in a leafy suburb and a nice wardrobe from my working days without children and probably look 'loaded' to some people, I'm skint. I haven't bought anything extra for nearly a year, no clothes for longer than that. I buy secondhand when I can and I sell stuff I don't need. The council tax is £250 and utilities £235, that's a quarter of the income gone before anything else is paid.

We aren't high earners but I am perfectly able to understand why other people, who on paper look like they should be managing just fine, are feeling the struggle too. You have no idea of other peoples commitments so why even give it headspace.

Depends where they are and what their circumstances are. If they are tied into central London/other big city jobs then they will either have a high mortgage (sure they could downsize or move somewhere less convenient but that isn’t exactly enjoyable to do) or v expensive commuting costs. Maybe the kids are young and they are paying a couple of thousand a month in childcare to enable them to earn so much.

Once tax, mortgages, childcare and essential bills have taken their share then £100k can look small. I’m not saying that they don’t have more options than a family earning £50k but that doesn’t mean they don’t have their struggles.