To ask how much disposable income you need for a reasonably good lifestyle?

[surreygirl1987]

Apart from the essentials such as mortgage, council task, food, petrol etc, how much money do you have for 'fun' each year? I mean things like holidays, day trips, eating out, takeaways, theatre, cinema, kids' parties, and basically anything non-essential? Looking at my budget spreadsheet but have no idea what a realistic amount is. (I've counted all bills, gym and Netflix as essentials btw!). Thanks!

The Joseph Rowntree Foundation have already done this for you:

“A single person needs to earn £25,500 a year to reach a minimum acceptable standard of living in April 2022. A couple with two children needs to earn £43,400 between them.”

www.jrf.org.uk/report/minimum-income-standard-uk-2022

The full report gives amounts for different types of household and is based on very detailed research on what people believe you need to have to participate in society.

Depends on the age of the children. The non- essentials get more expensive as they get older, and holidays are way more expensive in school holiday time than not.

Eg once they are all over 5, so no one goes free, then a family trip to the swimming pool will probably be £15-20. A theme park/zoo/ stately home £80. A meal out £60 if they have children’s menus, more if they don’t or when kids are bigger.

Hosting parties is generally about £200 if you want to do more than just play party games at home.

it depends on mortgage & childcare costs but after those & savings I would want minimum of 3k a month

Thanks for this. I've just had a quick look but I don't think it's exactly what I'm looking for. I'm not looking for minimum income info (my husband and I earn around £120k between us). We are just trying to work out where best to direct some of our income (ie savings, private school for the kids if we can manage it, investment etc) and are trying to work out how much we would need to keep back as disposable income for 'fun' money in order to live a good lifestyle. By good lifestyle, I mean eating out frequently, going to the theatre a few times a year, and going on a few holidays abroad a year etc. What do other people spend on 'fun'?

Depends on the age of the children. The non- essentials get more expensive as they get older, and holidays are way more expensive in school holiday time than not.

Currently both under 5 but need to think about the long term too.

it depends on mortgage & childcare costs but after those & savings I would want minimum of 3k a month

Whoah, so £36k a year on 'fun'? Okay, I am way off base!! 😳 Do people really spend this much on holidays, eating out etc?

Well, surely that’s entirely personal — and your idea of ‘fun’ will depend to an extent what you like doing, and what your ‘normal’ is? I mean, whether a ‘holiday’ is a caravan in Skegness or a private villa in Bali.

We are in a similar position OP - 120k between us. We have a rental property that we are trying to pay off as quickly as possible, and a large mortgage on our main house. Upshot is we have tied ourselves up with not enough spare money each month to do much. Not ideal in hindsight! It will be worth it in the end though I hope, once the income from the rental isn’t just paying off the mortgage. We don’t spend a lot on eating out as we’ve never really liked eating out. We spend a lot on sports activities. Probably £300 a month. Holidays are tricky - I’d love to take us all away in summer holidays but can’t get my hands on the £5k minimum it would take. Are you mortgage free? If so then obviously you have a big chunk of cash to play with…

Yes of course! But I want to know what others reserve for 'fun' money. Of course this will vary. As for holidays, I did say a few holidays abroad a year- not Skegness!

I’m not being a twat, but given your high earnings I’m expecting you’re both intelligent and numerate.

Just work out the things you want to do each year and assign the appropriate cost.

I like expensive skincare and allocate £50-£100 a month on skincare and cosmetics. Obviously this might not be appropriate for other people.

Private school - around £16k per year per child (increasing each year)
Holiday - we spend around £2k - I know someone who hired an island for £35k

No one can tell you an amount.

Are you mortgage free? If so then obviously you have a big chunk of cash to play with

Ha, no I wish! Our money is currently all going on childcare and mortgage. Once my kids are in school (if we go state) we will have freed up a lot of disposable income. We're trying to work out what's best to do with it and how much we should reserve for us to enjoy each year.

Depends how much mortgage is and how much wages are surely

I’m not being a twat, but given your high earnings I’m expecting you’re both intelligent and numerate.

Yes, a PhD and a handful of masters degrees between us. But we've never had money. I was bought up in poverty and I don't know what middle class professionals spend on enjoying life. My family didn't have that option when I was growing up. Now that nursery is coming to an end we will have money and I'm trying to work out what to do with it.

Also depends what you actually want to do with the spare cash.

Surely you know how much you are likely to spend on holidays and enjoying yourselves.

@surreygirl1987 overpay mortgage?

Well, it depends entirely on your income and how much is left after the essentials. So everyone will have a different answer.

I put 5% of gross salary aside to pay for a holiday (camping), Christmas and DC (x2) birthdays. I don't really have any other disposable income to spend on myself. But I earn a fraction what you do and am not managing to save anything for a rainy day, so don't know how helpful that is.

But my approach is "what's the minimum I need to take DC camping in the summer?" and then divide by 12 and put it aside every month.

I don't even earn £3k a month so the idea that someone would want that as a minimum as disposable income is totally baffling to me. I'm the kind of person who only has a coffee out if I have enough Nectar points to trade in for one.

OP's "problem" is a very nice one to have.

Everyone will be different. Tot up your bills each year, subtract from your earnings, then see what you had left over last year. That's how much you spent, add 10% inflation and you're done.

Surely you know how much you are likely to spend on holidays and enjoying yourselves

No actually. I've never spent more than a few hundred quid on holidays before. I've never been on a 'family holiday' abroad. That's what I'm asking. How much do middle class professionals spend on enjoyment?

I have loads of money but want other people to tell me how to spend it is such a weird question.

There is no right answer at all.

You have a high family income. You can do as you please. If you want 'a few holidays abroad per year' just cost them up. I don't want those holidays because I thing climate change makes it unjustifiable for me to fly a lot - people have different priorities. So there is no point me telling you what I spend.

Oh, in that case, definitely overpay on the mortgage.

Everyone will be different. Tot up your bills each year, subtract from your earnings, then see what you had left over last year. That's how much you spent, add 10% inflation and you're done

No, we spent £36k on childcare last year. And the year before that. We're finally about to come out of nursery payment hell. So I'm trying to work out how best to spend/save the money.

I would save at least half the extra money as a minimum, there is no need for lifestyle creep, just spend the extra intentionally don't fritter it away in costa and nando's. Wealthy people invest extra money they don't spend it on depreciating consumables

We currently have £400 after essentials (childcare is huge as 2 small kids), mortgage food etc. this isn’t a lot and seems tight- I do extra shifts around Christmas to pay for it. We go to the same relatives holiday home every summer (v lucky!) so this costs £1k in flights and car hire before spends, but as it’s a home we do food shops as we would at home and generally just swim and potter so can spend very little if we want to.
When kids are in school we will have around £1500 per month fun money. We will save £500 and have the rest to spend. That seems like we will have a decent standard of living but will see how that goes! We were meant to be much better off when we got 30 free hours but we had to remortgage and the increased costs of everything swallowed that up and then some. Total household income around £90k though so less than you!

So experiment! There is no standard-pattern ‘middle-class professional’ template you need to follow. If you’ve never gone on holiday abroad, why don’t you try it and see if you like it before allocating some arbitrary sum to an activity you think you’re supposed to do?