To ask what you think a reasonable lifestyle is for this income?

[Momeymoney]

They have a DS (11) and a DD (8). Mum and Dad both work full time and when combined their income is £155,000 before taxes. What is a reasonable lifestyle for them to live? How much can they afford to spend on cars, can they afford private school, holidays, etc?

Both are likely as far as they will go in their careers, so limited chances of this income increasing (it also is unlikely to go down).

Strange question...
How much is their mortgage, for a start?

Income is irrelevant until we know their outgoings. What is the cost of their mortgage, bills and childcare? We need to know how much disposable income they have after essential bills to answer that question.

@Momeymoney when me and ex DP earned 165k between us we would have been able to pay private school x2, with a 1-2k mortgage but with modest cars. We wouldn’t have been savings loads and maybe would have had one ‘nice’ holiday a year and then a couple of mini breaks.

No private school? We’d have been rolling in it.

Lots of variables.

That's about £100k after tax, maybe less depending on how earnings split between you.

So about £8k a month.

If you have a moderate mortgage then nice comfortable life style.

Not private school as that's about £20k per year per child, at least, so would be half your income.

Cars, entirely a choice about whether you spend money on those or not.

Holidays again similar.

A perfectly decent life with lots and lots of choice about how you spend your money.

What is the housing situation? Any debt?

Assuming no debt and a manageable mortgage, I would say a comfortable lifestyle with a couple of holidays a year, decent cars, money for some luxuries, and the ability to save. But not enough for a private education for two DC.

I agree an odd question, context would be useful.

I know some people in this bracket and it’s not very spendy: local school, 1 car, 2 holidays, takeaways and local restaurants, detached 4 bed in a village.

Just standard life. £155k before tax doesn’t get you as far as some might think.

As well as needing housing cost information, There is a Massive income difference depending upon whether income is from a single earner or 2 earners, and how much each earner brings in.
Also, which part of the UK for tax purposes?

Your question has no answer without details being added.

Private for 2 x DC's (assuming a London day school), I'd say no. Fees are currently around £20k p.a. per child, but increase by about 10% per year, plus factoring potential VAT on fees with a Labour government. Without school fees, they should be able to afford a really comfortable lifestyle.

@SaltyGod i agree with this. People think it is loads but actually you end up with zero money problems (obviously nice!) but nothing hugely luxurious. A 5k holiday would still be a luxury and one off in the year, for example. And a 5k holiday isn’t HUGE luxury these days.

But like any income the single biggest determination of how much spare income you have is housing costs.

As the income is higher, you have potentially more to spend on housing. If you choose to do so, and everything is a choice, then you will have less to spend on other things.

@pastaandpesto a lot of private schools work out around 1.2k a month, it’s definitely doable for two kids if that’s what you want.

There are such a huge amount of variables here, it’s impossible to say.

Where do they live? Do their own a house outright? Or do they have a big mortgage? Ditto cars (do they own them, or pay massive amounts on monthly payments). Do both have pensions etc sorted out? What about a university fund? What are their weekly expenses on bills, heating, petrol, food etc? Childcare costs? Debts? Expensive hobbies? If they have high outgoings then their spare cash could be less than someone on say £60k who owns their house and cars outright (remember after about 50k taxes are much higher).

At the end of the day there’s no magic figure above which private education and multiple holidays are always possible- it depends on your outgoings/ expenses and your priorities. What most people do us work out their budget, with housing, cars, savings and bills being sorted first, and then decide what to use the spare money on- holidays, renovations, private education etc. Unless the people concerned are you you have no idea how these figures will look. If it’s you, then do a spreadsheet and work it out!

It honestly baffles me how someone could be experienced enough to be earning that sort of salary and be asking strangers a question like this.

We have £120k after tax and no kids. We don't have a car and a mortgage on a 2 bed flat in London (mortgage of £280k). If we earned £155k and had one child in full time childcare, the childcare alone would completely consume the extra £35k which is nett £1830 extra (no student loan as that would probably be paid back in the next 2 years). So with 1 child, we would have the same disposable income for the two of us (plus baby) that we currently have lol.

We go on a lot of holidays (total of 26 days spread over a series of weekend breaks over a year) but we usually just stay at 3 star hotels so nothing fancy. Between the two of us, we spent £6k on flights and hotels in the past year.

Its an average lifestyle, i think.

How can anyone answer this question?

We’re in that bracket and not sure I agree with these comments, although we don’t live in the south so maybe that skews it.

We’re definitely not having a 5k holiday as a one off, our holidays are probably 3 times that in a year and we run two new high-end cars (although one is a company one). Live in a large detached in a lovely area.

Don’t have kids yet but hoping to very soon. I don’t think we’d be able to stretch to private school without a considerable cutback in lifestyle, but that’s fine with us as the local schools are really good and no great private ones around here.

We’re very fortunate though and it feels a good income for us for now.

@YaWeeFurryBastard i was referring to also having two kids in private school. Agree that without that you’d be going on plenty of holidays!

'detached 4 bed in a village'

Because that's not going to be 'spendy' at all is it?

Unless they've bought it with inheritence, previous equity or decades ago, the mortgage on that could be taking all their monthly income, before anything else.

Depends mortgage size???

i actually think a family on £150k in the south/london would be squeezed middle (or even on a lower class income tier). I certainly count myself as squeezed middle as a couple (no kids) on £120k and with a mortgage (and its on a 2 bed flat which was purchase dfor £392k so well below london average).

starting salary for my DH's job 1.5 years after graduating from university is now 60k (it is for an american bank though). We are both junior and earn £120k. It is quite conceivable that someone on a good pay package (in our industry or tech) could be mid 20s and on £150k combined.

@lavender2023 I think you may have misunderstood what @Hufflepods was trying to say. They were basically saying how can someone who is clever enough to be earning such a high wage be stupid enough to need to ask a bunch of strangers on the internet what they can and cannot afford without knowing any outgoings. That's what I gather from @Hufflepods response anyway. I don't think they were questioning how can someone be earning that kind of wage?

Assuming not living in London or anywhere with incredibly high housing costs and that they have owned a home for a few years, I'd imagine they might own a nice but not vast house - 4 beds detached say. A couple of weeks overseas holiday each year, maybe some years Europe and some years further afield, a few other weekends away per year, festivals etc or maybe skiing as well. Newish cars. No private school but relatively expensive hobbies for the kids like learning musical instruments, swimming, drama, ballet etc. Or they might be paying for tutoring to get their kids into grammar school.

I'd say it's roughly what I think a few couples I know have and that is the type of lifestyle I'd say is usual. Around age 40 and have owned homes for 10-15 years.

Having said that, it all depends how they prefer to spend their money. They may want to whack as much as possible in savings/pensions to retire early. Or scrimp as much as possible to afford private school. Or they may have (buy/rent) a hugely expensive house that eats up a lot of their income.

We are in London on a similar income. We're comfortable but have high mortgage and, until recently, high childcare costs. We don't have a car, decided we couldn't afford to send DS to private school and have one holiday a year. Finances is one of the reasons that we decided not to have a second DC. But we also choose to live in a relatively expensive area and we tend to spend on food/clothes quite freely.