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?

SE England + childcare.

You don't get much change for £100 per day from nursery around here (SW London).

It'd going to depend if its 2 people earning 50k or 1 earning 100k as its going to make a difference to what they can claim and how much tax they pay. I am lucky to have a good salary but am a lone parent, pay £500 commuting costs a month and £400 childcare for before and after school. I am in between owned houses so have the rent, all the bills, food, petrol, car insurance etc. I seem to be the only person who doesn't lease a car, mainly as I want the choice to sell and get a really old banger if I needed to reduce costs. I always acknowledge how lucky I am but many people are shocked how much I have to spend out to keep a decent job that I commute to London to. I try to support those that are struggling via charity donations and food banks etc and always try to remember how privileged I am when people comment I must be loaded.

We have a joint income of exactly £100k. After you take into account all of our basic spending (and repayments) we're left with £500 of disposable income which isn't a lot. Mind you, I was made redundant and we had to put our costs of living on credit cards for a few months (I'm the higher earner). It was the perfect storm as we had just moved house, so used our normal "emergency fund" to cover the move. Once we don't have any repayments, and our DS gets the 30hrs funding, it looks like we'll have at least £2000-2300 pcm disposable which isn't too shabby.

Definitely! Especially with the NHS fiasco this month. That has affected us too.

I know what you’re talking about. The example she gave said that the family had a mortgage of 2K. If you’re on 100K and your mortgage is 2K a month then that’s definitely a choice. There’s really no need to have such an expensive place.

I also think that if you’re on 100K and you’re struggling then that’s purely down to lifestyle choices. Whether that be school funds for the kids, multiple cars etc

That's easy to solve, then.

Give notice and the children go to state school.

It depends. We earn (jointly) just under £100k, but I really don't feel especially wealthy. We are definitely making cut backs and the change in tax won't help much as neither of us are in the highest tax brackets.
We do, however, have to pay for university expenses, commuting (can't WFH), house expenses (thank God for a fixed rate mortgage). DS still requires access to money for tutoring/ driving lessons/ books to study. Neither of us drive a flashy car and we aren't jetting off the holidays we used to- we realise that we are lucky to still be looking at affording the one we booked back in March.

My suggestion, for anyone on any income bracket, would have been to not assume interest rates would stay low forever.

But that notwithstanding, a family of 4 struggling to pay off a 200k house is not the same as a family of 4 struggling to pay off a 1 million+ house. If it does then the value of money means nothing.

The family I’m talking about have a large 5 bedroom house, kids go to independent schools and have 2 german SUVs for a family of

Well they earn over 100k then

A decent 3 bedroom house in even zones 4 or 5 in London will generally leave you with a chunky mortgage. Add in childcare costs if they have them, commuting. We're only just starting to recover from the childcare costs years and they're both in high school. And if you got a mortgage relative to your salary, only to see outgoing rising massively, you can easily end up in trouble. And it's easy to say downsize, but without leaving jobs, security, family, friends, nurseries schools etc it's hard to change that particularly. Add in the thousands it would cost to actually move, plus stamp duty it's unlikely to help enormously.

why question isn’t “why don’t you downsize?” My question is why did why take such a huge mortgage? Why have the luxury cars. you never know what could happen your life. With 100k you have the capability of preparing for these sort of thing and you have simply have decided not to.

Maybe it’s due to me making my mistakes at a young age that makes me have this mindset.

YABU

£100k family income doesn't stretch very far unless you live in Grimsby

I agree tbh.

@toomychtiss exactly what was thinking. They aren’t living “within their means” if they are living this lifestyle.

Perhaps they need the space for working from home. We planned two children and bought a 4 bed knowing that DH hidden disability might result in him having to work from home.

It's double our (2x adults working ft) salary so dh and I would consider ourselves rich. Our children would benefit too.

YABU.

You don't peoples individual circumstances. We could very easily afford our £2k mortgage plus childcare based on the rate we took it out on plus a stress test to 5% as advised by the mortgage advisor and financial advisor we used. However, with rising costs of everything we'll quite frankly be fucked when we mortgage next year and have to hope that the rise is coveted by our youngest getting funded nursery hours. We aren't extravagant, both work very hard in full time jobs, and took appropriate financial advice so why shouldn't we strive for a nice home. Obviously all of the current situation is my fault 😡

Because you have people in their early 30s who have only ever known very low interest rates.

Very few people are taught proper money management.
Both my parents lost a fortune during the crash In The 90s. My dad just handed his keys back. Yet neither of them gave me any advice or leadership when it comes to money management. It was something we had to learn on our own! So yes a lot of financial mistakes were made. We were just lucky we made them when we were young and had ridiculously low interest rates to help us ride the wave.

If £100k isn’t enough surely more of the population should be living in poverty if the average is £31.5k for a household.

We have an income of circa 86k so not quite 100k but we have no mortgage/car payments and our childcare is minimal.
we save 1-2k per month. If we had a mortgage, car payments and childcare then it wouldn’t be saved and we would struggle with unforeseen expenses I imagine. I can see how it wouldn’t stretch to be honest!

That's not the average for a household

That's a single persons average

If you fart away every pay increase with lifestyle changes, then yeah, you'll end up as pinched on 100k as you were at 40k.

For most people that lifestyle change is dc, but less young people are choosing to have them so there is that.

No because higher earners often have higher Bill's and outgoings that they cant just get out off. Also higher earners will be paying significantly higher taxes and likely student loans which can be very expensive per month so it doesnt automatically mean they are poor with money

I dunno. I think we are struggling and I don't think we mis-manage hugely.

Take home for us as a family is £4,600 p/mth.
Mortgage is now £1001 (was £800)
kitchen loan (interest free) £136
broadband & TV £40.25
water is £49
Power is £195 (was £93)
C Tax is £159
childcare is £1065 (was £900)
Insurances (car, home, contents, cats, us) £294
tax bill (HMRC miscalculation that we are paying back over 5 yrs) £68
Food + clothing is £625 + £182
Petrol is £100
Bus Pass £30
after school clubs are £81
cleaner is £60 (comes once a fortnight)
Audible/Prime/netflix £27 total
window cleaner £26
TV licence £13.25

In theory that leaves us £388 but we are always overdrawn by payday.

So i suppose yes, we mis-manage. We don;t even have a clue really.

This thread is a good wake up call for me to be very very careful. It makes me think we are being frivolous but at the same time i think it's OUR money & we should be able to be a bit frivolous. We SHOULD be able to go to the chippy or buy a coffee or go to the cinema. Those things are reasonable things to want to do for any family.

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

The ones available in the present.
It's one thing if you bought or were on the property ladder twenty years ago and entirely another if you weren't and have had to buy more recently, when house prices increased and wages have remained relatively flat.