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?

That is actually the sign that our salaries are bad because £120k combined means only a £480k house is affordable assuming no parental gifts.

You can't measure salaries in this way though eg I only 200k but the local terraces are 1.2m. The whole point is house prices aren't proportionate to salaries.

And we didn't have any parental gifts.

"managed to save £90k over 3 years of not paying rent"

That counts you know!

If your salary means you have to borrow 4 times your income to buy the median property in your city, it means either that the housing is overpriced or you are underpaid. We are at record mortgage to income multiples, the last time it was so unaffordable, it was the early 1900s..

It is a little bit of both. Current median property is 9 times the salary of the average londoner. So for two average Londoners coupling up, probably works out to 4.5 times.

Good quote from the big short- if take home pay is flat and house prices are soaring, it means the houses are debts not assets.

I'm not arguing that housing isn't overpriced or that wage stagnation hasn't happened?

My point was just because you can't afford a nice property doesn't necessarily mean your wage is not good. There is huge inequality simply due to age.

And the market is distorted because lots of people have help like yourself has help.

Our joint income is nearer £200k pre tax but we live in Edinburgh so income tax is quite a bit higher (high rate starts at £43k and is 41% not 40% so we pay an extra £450/month!), and a 4 bed detached in our area is well over £1m. Private schools are £15k + a year so no chance we can afford it for our kids!

25% of Edinburgh’s kids go private though which makes you wonder who can afford it? Is it all inherited wealth?

We earn less than you (about £170k combined) outside Edinburgh and planning to send our 2 DC for private secondary. You live in quite an expensive part of Edinburgh if that's the average house price. Nice 4 beds in our nice suburb are around £500-600k and we bought ours 8 years ago for £350k. We don't have a lavish lifestyle, no inheritance, one electric car , one 'normal' annual holiday (ie not Dubai or Disneyworld) and a bit in savings. It'll be tight but manageable. Kids will only be in school at the same time for 3 years so it's those years we need to plan for. One set of fees is entirely manageable on our incomes.

Our joint income is nearer £200k pre tax but we live in Edinburgh so income tax is quite a bit higher (high rate starts at £43k and is 41% not 40% so we pay an extra £450/month!), and a 4 bed detached in our area is well over £1m. Private schools are £15k + a year so no chance we can afford it for our kids!

I don't really understand how you can't afford private schools if that's what you want. Just don't spend 1m on a 4 bed detached.

Completely off topic but I'm fascinated to understand how many of you think the average family get by on maybe £60 to £80k - and that's if they are both working.

I felt we were quite comfortably off in many ways on around £100k - but clearly we are paupers!

3 kids would be £4,500 a month on minimum on fees.

Food, holidays, presents, weekends away, home / car insurance and service and petrol, eating out, clothes average out at £3k a month, then council tax, utilities, a (v high) mortgage (no bank of mum and dad £500k inheritance here) and sports clubs / swimming lessons etc is another £3k.

Can’t afford it.

If I had that as a salary I’d live somewhere not in Edinburgh. There are plenty of nice places out of town which are nice enough where housing is much, much cheaper. And I’d ditch hobbies etc and go on fewer weekends away with friends mountain biking up north wtc.

if I lived out of town I’d have to commute, spend less time with my kids etc which I’d classify as a drop in living standards so I choose not to live out of town for that reason, pay the price but thankfully can afford it.

Bewildered by the number of people earning over 100k saying they feel squeezed / don't think they earn enough.

Joint household income for postman and public sector worker =£44k. Our entire mortgage is less than many of you earn in a single year. We're managing. One, maybe two uk self-catering holidays a year (term time, so pricy ...or seem like that to us!) 2 cars - both over 10 years old but going strong. Managing to put aside a bit of £ for the children's futures - either uni, or a start to a deposit (nowhere near enough for house tho, even by time they're old enough.) £ going into savings for us to build a rainy day account. Some family days out and an occasional takeaway. Pay for a gardener 3 hours fortnightly- that's our luxury. Currently having patio laid. National Trust membership, Amazon and Netflix.

We have to be canny around vouchers/discounts or use of Tesco Rewards to keep prices down eg days out. We keep to fairly low budgets for birthdays and Christmas. And we watch grocery costs - not too many brands, spreading out cost of big things over time eg new shoes for kids in Aug, so new coats will wait til Sept. We can't just chuck whatever we fancy into the shopping trolley, or shop at M&S, Waitrose, John Lewis etc. But it feels like we're doing okay. I think we live a pretty standard life, tbh. And we're not in a particularly cheap area either, not for going out or housing as gentrification has well and truly kicked in.

I think coming from a wealthy family helps not only with school fees and a hefty house deposit, but it also gives you a back up plan if all goes wrong. If the worst happens and you lose your job but you know your parents have a spare £100k to give you then you can afford to take some risks such as do some fixed term contracting work (which is much better paid), or put your rainy day fund in a high paying investment. If your parents are living off the state pension or similar, you have to have a much bigger rainy day fund to be able to take the same risks.

3 kids would be £4,500 a month on minimum on fees.

Food, holidays, presents, weekends away, home / car insurance and service and petrol, eating out, clothes average out at £3k a month, then council tax, utilities, a (v high) mortgage (no bank of mum and dad £500k inheritance here) and sports clubs / swimming lessons etc is another £3k.

I said you could afford it if you want too. I don't normally buy into the "we had less dc, holidays, smaller house, more sacrifices to afford private school" but in your case it's true. Fair enough you don't want to reduce your 6k a month outgoings but that's your choice. Others on 200k could make different ones & spent 15k a yr on private school.

In London definitely not private school even for only one child.

This is about our income.

We have a nice house in London and big mortgage

We take holidays though usually not super flashy 5" type holidays - more our preference really

Within reason we spend what we want on food/clothing

Kids have whatever extracurriculars they want

We don't run a car - because we don't think it's value for money

We don't have pets - partly preference, partly cost

We don't send our children to private school - we could probably have done if we had gone for a 3 bed terrace rather than a 4 bed semi. But we both WFH part of the week and have family to stay frequently so the 4 bed is very useful to us.

A big factor is that we got parental help to buy our previous place and got lucky with house prices.

We don't run a car - because we don't think it's value for money

I think a car is a complete waste of money but once dc got to a certain age I had to get one. Just cannot fit in the extracurriculars without it. I don't live in z1 though where I expect it's easier.

We're in zone 3 and it's been ok but we do have an electric cargo bike which the kids can go on the back of till they are 11 or so. To be honest with the low traffic neighbourhood it's actually faster than driving would be

Lol there was an article once in efinancialcareers where a banker claimed that the breakeven income is London is £300k. That is not household, that is an individual income. Of course many Londoners survive on less (including myself).. I overheard the receptionist in soulcycle (I go very occasionally because my credits from Classpass accumulate to allow for this occasional luxury) saying that he is going on an all inclusive to Mexico so if even he can afford overseas holidays ... (though I guess he probably has no dependents). So we are hardly going to think we are well off because we go on foreign holidays when everyone we know goes overseas on holidays. When I was in my 20s I thought we were doing well because we managed to buy a flat but now that I am in my early 30s, most people I know (other than relatively new immigrants) have also bought. Apparently the ownership rate for my age group (25-34) is 25% but I don't see that in my real life at all. The only people I know in my age group who don't own who aren't immigrants and don't own are living with parents long term due to cultural inclination or health problems (mental and physical) or live in countries with far more unaffordable housing..I also know two guys in social housing but honestly they do suffer from mental health issues themselves which inhibit their earning power.

But I think we compare to what previous generations who were earning the same amount had as well as our peers. For the banker, perhaps he was comparing to those traders who made a million per year and could retire at 30...

Netflixninnie 3 kids - yes fair enough! But £3k expenditure a month on what looks like a lot of 'stuff' not linked to mortgage and bills is quite a lot! We don't spend anything close to that but like I say, quite a frugal lifestyle I suppose (or others might think) which doesn't include lots of weekends away and usually one holiday a year. If house prices are £1m where you are, perhaps not an issue anyway as you're in the catchment of one of the good Edinburgh state schools. Not quite the same for us.

@Batatahara I got the car when I was in z2/3 & still need in now in z3/4 but I guess it depends on what activities dc do, timings & if you have more than 1.

Yeah and also there's obviously an element of choice, we don't choose activities we can't get them to.

We may need a car at some point but for now everything the kids want to do can be done on the cargo bike.

But I think we compare to what previous generations who were earning the same amount had as well as our peers.

One of my school friends lived in Wim village. I remember them selling the house for around 1m which I thought was so much money in late 99/00. I think that's about 1.8m in todays money but those houses actually sell for around 6m plus today.

Yeah and also there's obviously an element of choice, we don't choose activities we can't get them to.

I can't wait till the activities & matches/performances etc stop, roll on the moody teenage yrs! 😆

To those saying £155K is not much, when you earn £25-30k is IS a lot!
what the lifestyle should look like, will be entirely dependent on the priorities of the family – it could be private education but not many other luxuries, it could be a big house and not many luxuries, it could be fancy, flash cars or big fancy holidays but equally it could be a very modest lifestyle in Midland town with a paid off house, six year old cars, modest holidays and lots put away in pension/investments

I think as a previous poster said this is all about choice, and I have a lot more choices earning 140k than we used to a few years on 40k. We didn’t have to buy the big house on the nice street that needed renovations, we chose to do that due to our income, which enabled us to send our children to a very good state school. We choose to put in 30% pre-tax income into pensions so that we can choose to retire early if we want / give the children a house deposit / pay off the mortgage. We could choose to reduce these payments and pay down the mortgage instead. Or we could sell up, take all the cash in the house, move somewhere cheaper and be mortgage free. We can’t pay for private school x2, pay down the big mortgage, have big holidays, pay big pension contributions, renovate the house and save for uni fees and deposits etc all at once on this salary so we pick and choose our priorities. But we do realise how incredibly fortunate we are, I am from working class roots and will never take this level of income or security for granted.

Exactly .