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?

I think if you conpared a family with one income of 100k to a family with two incomes of 25k then the different would be quite surprising

If you took a family with 3dc as an example then including the circa £200 pm child benefit for the lower earning family:

• One x £100k salary - £5500 net per month
• Two x £25k salary - £3700 net per month

£1800 a month difference. It's not to be sniffed at but it's not as much as many people would think.

Dependant on individual circumstances - childcare costs or not, commuting costs, living in an expensive vs cheaper area etc - it's more than possible that a two parent household with 'unskilled' jobs at £25k each may have an equal or better standard of living than the family with one parent with a 'professional' £100k job (and probably a shit load of student debt to boot).

I’m just checking- on that case, it’s counted as income after housing costs isn’t it rather than after all bills/not purely discretionary spend? Covers utilities food transport etc?

@Happyhappyday its bananas to me too, it’s all business related though but the mortgage obviously doesn’t go through the books as an expense so it drains our income. It’s what we have to do to get where we need to be in life. We actually rent our house!

No I was wrong it’s all income after direct tax eg income tax and council tax so still have to pay everything else including housing utilities food etc

Why does this bother you so much?

people are allowed to moan about rising costs. If they are better off than you and it annoys you just ignore them.

Haven't read other comments but my 2p's worth.

It very much depends where you live. £100k up north and you're rolling in it. 100k in the SE and you're doing okay. Sad fact and frustrating.

My rent is 24k a year on a regular 3 bed. Not struggling but we can't just go off on holiday. Car's are second hand. Careful woth food bill. Can't send kids to any clubs they fancy.

Want to buy but priced out and trying to save but it doesn't scratch the surface of deposit.

On the fence here. In ordinary times I would be inclined to agree with you. But I can see how anyone could be struggling at the moment. You tailor your lifestyle to suit your income, and that's not unreasonable.

But when energy bills triple, mortgage payments could well double and everything else goes up too, even those with decent incomes (say, in the £100,000 per family range) could be unable to meet their outgoings.

I don't think anyone would have believed you if you'd predicted these sorts of rises in the cost of living a few years ago, so it seems a bit mean to brand the failure to plan for them as 'mismanagement'.

Where people on higher incomes do have the advantage is that if it comes to the crunch they have opportunities to downsize their outgoings while maintaining a decent standard of living, e.g. by moving to a less expensive home - as long as they aren't trapped in negative equity etc....

Not during if others have pointed this out because I've not read the whole thread as these sorts of threads are getting very repetitive but it depends on on all sorts of things doesn't OP.
A family of 4 with 100k could live in London and struggle to pay a large mortgage or live in Lincolnshire and have lots of date cash.
They could have health issues that require lots of cash or mean they struggle mentally.
They could have other dependents....etc
The last is endless but I know kind thing. Judging people on how much they earn and how they spend their own money is a poor show.

Actually, I changed my mind! YANBU

largely it probably depends on your definition of struggling. We're having to make adjustments, but not 'struggling' to pay essential bills or feed ourselves/the kids. And we're below £100k.

This is largely because we haven't mismanaged our finances. When we bought our house two years ago we purposely kept our mortgage cost under £1000/month (on our current rate) and fixed for 5 years - knowing that our childcare costs will reduce by then so if interest rates are higher we could still afford the mortgage.

We could afford to do that due to years of living in a much smaller property (1 bed), keeping our costs as low as possible until it was time to move (2kids obvs made 1 bed impossible when we could afford bigger).

We could have maxed out our mortgage and got a much bigger/more finished house, and now we would be struggling. That would be due to financial mismanagement.

That doesn't mean I don't have sympathy for those people. People make decisions based on their situation at the time.

Also...those assuming families with one earner on £100k are much worse off than those with 2 earners on £50k...in a two parent household with only one parent working, you don't have (essential) childcare costs. You don't have double commute costs. Take home pay might be less with 1 earner vs 2, but that doesn't mean you'll be better off with 2x£50k earners.

We have a household income of around c£90k and don’t live in the SE but we are starting to feel the squeeze.

Our mortgage just went up a couple of hundred quid (we managed to fix in May), our gas and electricity have gone from £120 to £300pcm, food and fuel cost probably £300 a month more than before.

So that’s roughly £700 a month which has disappeared from our pockets. Are we struggling to eat? No, but there isn’t anything left over at the end of the month now. Lots of our financial commitments were taken out before this absolute shit show started and aren’t something we can just get out of. House prices have increased such that we’d get a 3 bed semi for what we pay for a 4 bed detached.

It’s miserable for all but the very rich. I wish we could stop this race to the bottom and focus our energies and anger on those who are plunging us further in to this recession 😢

Absolutely ridiculous comment to make. Ah yes I forgot everyone on a high salary goes skiing and eats caviar. Come on.

As everyone said, it's all relative. Yes, people on higher salaries definitely have more options than someone on a lower salary but let us be realistic, the more you earn the higher your outgoings are.

My salary has gone up over the years but oddly, I feel like I have less money now than I did when I earned £16k. And no that isn't down to mismanagement.

We earn £82k between us, rent a small house, shop at Aldi, I have a cheap 10 year old car, only buy in the sales and don't put our heating on unless we are desperate. Just because you earn more doesn't mean you go out buying luxuries. We aren't on the breadline but we are certainly feeling the cost of living.

I don’t know what we’d do with £100k pa. I earn £18k and DH earns £22k. We bought our home in 1995 so we’re mortgage free now. DC are 21 & 23 and are in education. We save up and one year we’ll holiday in the uk or Europe and the next year will be long haul we reckon 2023 the DC will want to come away with us, possibly for the last time. We save for everything and have no debt. If we don’t have the ££ we don’t get it.

I think the crucial part of this post is that you are mortgage free. We bought our first house in 1994 and are also mortgage free but I imagine for people with mortgages or those that rent privately the prospect of interest rates rising is terrifying. Maybe ask your DC for their views on the housing situation in a year or two?

We bought our house in 1995

Im sorry I didn’t buy a house when I was 16. What an idiot I am.

Surely it depends where you live. We live in London (without going into too much detail, we live where we have to for our children's school - it's the only one in the country) and we earn over 100k. We will feel it this year.
We have never been able to afford nurseries for our children for example. We are not living beyond our means but with the new mortgage rates etc it would cost us more to downsize. We are already likely in the cheapest property in our area and would also have to move about an hour away from said school to make any financial difference. This would then impact our children for no real gain. We are stuck.
We won't be going hungry and appreciate there are people far far worse off than us. But to make such a blanket statement seems off to say the least.

disposable income is after compulsory taxes income tax national insurance and council tax but not pension contributions ie what arrives in your bank account if you are PAYE
it is called disposable as though housing, food, essential transport, water and heating etc are essential you have choices on how much these items are depending on where you live, size of property, tastes etc, there is a big difference between the cost of the smallest house for your family in the area and what you might like for your family within commuting distance, same with food some might spend £60 a week for a family of 4 others over £200, utilities are the same
dicretionary is after essentials and includes clothing, eating out, presents, phones, holidays, fuel for day trips, insurance, pets etc
whether you agree with that is disposable
disposable income on a single salary of 100k is about 66K or 5500 a month
disposable income on two salaries of 50K is more

many people when living within means forget about savings that should be treated as bill you should pay yourself first and to be honest at 100k having all your income spent with nothing going to savings is financial mismanagement
every single financial advice platform recommends a financial cushion ( a minimum of 3 months and often 6 months living expenses and 12 if in a volatile industry like acting) as the first thing necessary after a plan for debt control before saving for a house or a car or school fee. This is financial prudence is you are not prudent and in difficulties because you spend every penny then you are at least partially to blame maybe you couldn't have foreseen that covid and a ukraine war but you could have foreseen that recessions happen regularly, interest rates go up and down, so does the stock market oil prices etc, harvests are poor in some areas of the world each year and this has a knock on effect

Council tax is £2.8k

I don't pay much less than that on a fraction of 100k. CT disproportionately affects lower earners. Bizarrely though my current house that is worth more than my last house is in a lower band.

Also...those assuming families with one earner on £100k are much worse off than those with 2 earners on £50k...in a two parent household with only one parent working, you don't have (essential) childcare costs. You don't have double commute costs. Take home pay might be less with 1 earner vs 2, but that doesn't mean you'll be better off with 2x£50k earners.

For lone parents, they are the only adult so have no SAHP, if they are £100k they have no help with childcare costs (that a couple each on £50k would still get), pay more tax than the couple on the same household income AND most likely have higher childcare costs in the first place as only one adult to do work and childcare not two to juggle it. Lone parents are so stitched up by the current system: it should aim to redress their harder situation not compound it by making them pay more and receive less back than a two parent household.

Do you not see how paying probably £2k a month childcare would mean you were unable to afford the things you could afford once you were no longer paying it? That's £24k a year which would be a lovely holiday and probably leave you enough change to switch to ocado.

My point was 4 years ago someone on less money than we were would have thought we were well off. We're still not on anywhere near the £100k mark but due to now having no commuting costs no childcare and a pay rise we are no longer having to add our shopping up around Aldi
As I said it depends on your circumstances at any given point in your life. A couple earning £100k joint may be less well off than a couple or single person earning less due to outgoings. This doesn't necessarily mean they can't manage their money or have a big house
It depends on childcare costs, when you bought your property and commuting costs

@Jmaho agreed! Was surprised others couldn't see why there was a difference 🙈

It's all relative though isn't it. Their mortgage may be 40% of their monthly salary, just as someone on 40K may pay 40% of their monthly salary on their mortgage. Bigger house, more expense. People on 100K don't say "let's buy a 3 bed house even though we can afford a 4 bed", just as people on 40k may buy a 2 bed house instead of a 1 bed flat.

You're thinking of how you would live with 100K salary against your circumstances as they are, and its not comparable. You'd likely have a lot of excess money earning 100K and maintaining your current lifestyle/home.

I have been reading through this thread, and the one about Labour's intention for independent school fees. All quite repetitive but one thing stands out and that is how divisory things are.

The super rich are largely unaffected by the cost of living crisis. They could and would continue to educate their children privately should independent school's lose their charitable status.

The rest of the population (which is the vast majority) are the ones effectively arguing amongst themselves over these issues. All are affected, some worse than others I accept.

They shouldn't be arguing over whether they have been careful with money or not, or if sending their children to independent school means they have money to burn - This bickering amongst this group is in effect arguing for a race to the bottom, pushing to remove whatever little social mobility remains.

Wouldn't it be better if these 97% united, the aim being to improve standards for all. I don't claim to know how to do this but do know trying to drag one another down isn't the answer.

Hear hear.

it honestly depends. I think sometimes it can come down to mismanagement but then personal circumstances can really hit hard too.. Before Covid me and my partner at the time (sons dad) had a combined income of just under £200k, my mother was a full-time nanny for our son, so we had very little childcare costs and we definitely pissed our money away living an extravagant life, we were young (in our early twenties) and didn't know better. Then covid happened and Sons dad lost his job and my income a almost halved (we both worked in sales in the travel industry). That humbled us, shortly after that my mother got sick, ( no more free childcare) And about a year after that I had to leave my job to then care for my mother. So yes we did mismanage our money when we were earning alot. But that wasn't the reason why we were struggling, the death of my mother, breakup with my ex( being now solely liable for our big property) covid etc. all had a part to play. Life can hit anyone, even if we saved and were super frugal, the personal circumstances that hit us still would have meant we struggled. Neither of us are earning what we was pre covid, everyone's situation is different. Just because you make £100k+ doesn't mean you're immune to struggling and life hitting you. And poor people can mismanage their money too, I see it all the time. People on benefits wearing designer, driving range rovers etc.

But 100k in an expensive place where flats cost 500k is not the same as 100k if you live somewhere cheaper where flats cost 100k is it 🤦‍♀️