To feel poor even though we earn well?

[erte]

We live in London and have to for our jobs. Even though we earn what most people would consider a very good household income, maybe top 5% nationally, we still feel poor.

Yes we can afford rent but can’t afford much more than a one bed and save. Whereas if you told me 10 years ago how much I would earn, I’d have imagined a far more comfortable existence.

As a pp said, money just doesn’t go as far these days. We earn well, over £100k, but holidays are uk camping trips, eating out/takeaways are a rarity, I buy everything second hand, and we don’t even live in London! But we are lucky to have our own home and nice food on the table. However it’s not the luxurious lifestyle I think our salaries should afford us.

I often read the holiday threads on here agog with 10/15k holidays deemed as normal.

I feel you OP!

A £600k mortgage will cost you ~£3k a month. In London this buys you a very modest house.

Childcare might be another £3k (or more).

So that’s a ~£120k income spent before you’ve started to think about food, travel, bills etc.

I am seeing many of my friends reach a bit of ‘crisis’ of sorts around this - they are entering the period where we are supposed to be at the top of our games in terms of earning, but our lifestyles don’t really reflect what people might think.

The responses are a bit harsh. I don't think OP is claiming to be in poverty, struggling to afford the basics. It's just that they expected to be able to afford more with the earnings they have, and the cost of living has just sky-rocketed so much that that's all changed.

I get it. I spent many years living in rented rooms in decrepit HMOs, managing to stretch out the contents of my cupboard for a few extra days, when the salary I have now would have seemed like an absolute dream, and don't get me wrong, we have a nice lifestyle in comparison, but it's nothing like it would have been 3 or 4 years ago.

The combination of fiscal drag and high inflation has made life very different for a lot of people.

We are decent earners especially my DH. A few years ago before the pandemic, the wars and brexit, we really felt like we were getting there had enough for a nice lifestyle and savings. We were also thinking of moving but now it feels like the goal posts have been moved from under us and we do have to think about money more carefully and will probably be in this house a few more years yet even though it isn't ideal anymore.

We are by no means hard up, we can still afford good food, the odd meal out, concert and theatre tickets and nice holidays we are going to Japan next year but having a staycation this year to help pay for that. So we do have a degree of discretionary spending but it helps that neither of us are spendthrifts and we do have to stop a think before buying something like expensive concert tickets.

I think though the obvious jump in prices in utilities and food has been a jolt but nothing compared to what many families are going though where they can't even afford enough food, never mind nice food or to put their heating on in cold weather. I really hope the next government focuses on helping those people first and foremost.

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You are not alone OP.

How anyone unless super rich can spent as a minimum £10,000 on holidays, at least 2-3 times a year, is beyond me. But according to MN it's a completely normal thing to do and there must be something very wrong if you don't.

I feel the same. If you told me what our household income is now five years ago I would have thought we had two cars, foreign holidays and not still be in the same rented flat.

We don't have childcare fees anymore when we were paying close to 900 a month as well. Our income after tax has probably nearly doubled in that time too. It's utterly mad. Just before inflation went crazy we got decent payrises and it's like the money disappered into a black hole. My weekly shop has probably gone up by about 50% in that time too. And we shop at Aldi!

We have saving a bit each month though, so that is part of the reason we feel like this, but some months even that is very hard.

I think it's your expectations that are the problem.
Going abroad is a luxury, or it should be. Same for eating out.
In the 90s, I had parents on comfortable salaries, we could afford one holiday abroad a year for a week, and we ate out for special occasions. We were considered fairly well off.
Then flights went really cheap in the 2000s with budget airlines, supermarkets kept food prices artificially low etc etc and people could afford more.
Now the economy has caught up but people still expect to be able to go abroad whenever they want, to afford to eat out whenever and not just for a birthday or anniversary. Not being able to do that doesn't make you anywhere near poor.

Its not your fault OP, You are not doing anything wrong. This is how things are now. Standards of living are falling and people are really starting to feel it. Its very concerning. We are doing well but having to be very innovative and really manage our money for the future and for our children who are both disabled and will have limited means.
My advice would be to really get financially savvy now and diversify, save, invest, get rid of debt and really manage the hell out of your pensions and your monthly budget. You don't need to be a financial genius but you do need to have an understanding of interest rates and tax.

Great Post.

I do worry about the future a lot looking at my life. Especially for my kids and one is severely disabled and we are still renting.

Partner and I have poor families, but better jobs than our parents. My mum worked stacking shelves and has much more financial security, a place to live in old age. I have a first class degree and a better job than she's ever had, but no option of having this. I don't want this taken away from her, but i just want the same opportunities.

Anybody can feel poor if they spend all their money, and more

But if you are (well) above average earnings you shouldn't expect sympathy.

Save it for the people who really are poor.

And this is true, but prices vary in London. The fact that working-middle class immigrant families are able to live here speaks to that. They live where they can afford, so that they are able to stay.

I think it down to the cost of living. Housing is very expensive, even outside London.

@Namechange1345677 which city are you in?

Our take home is 5200. Rent for a bog standard 2.5 bedroom terrace is 2100 a month , nursery fees 1900, travel 300, utilities 400ish. We are at 4700 before food, savings, pension, clothes etc.
we aren’t poor (I grew up poor) but we aren’t by any means rich atm. Once nursery fees are gone we will be extremely comfortable.

'Feeling like the world is ending poor?

Yep, it's definitely relative. I remember saying to one of DH's friends that I felt poor, but she basically had a massive go at me saying she was actually poor as a single mum (who chose not to work) and how dare I suggest that we even knew what poor was? And I was a 'selfish person' very spoilt 😳😬 I didn't want to argue too much about it after hearing how angry I'd made her 😳😢

I can't imagine being on a holiday where each day is costing upwards of £ 1,000.

Well no, OP's work is in London. She doesn't have to live there. Millions of us who work in London live elsewhere and commute in. And yes even accounting for the commuting cost it's cheaper.

That said my dc and their friends all live in London, have take home salaries around the £2k a month mark, rent around £900 a month mark and are having a bloody lovely time - regular holidays, festivals, theatre, bars, clubs etc.

This

We're in our 40s and given what we earn, I thought we'd be a lot more comfortable, but we're really not. Earnings haven't kept up with everything else and we've got screwed over with crappy pensions. My final salary pension scheme closed in 2010.

How does it? Do you think you are earning less than someone on a lower income because you’re taxed more?

@Soukmyfalafel Yep. DH and I live a comfortable life but we both work full time in demanding jobs, degree educated (unlike 3 of our parents) and are in our mid 40s. When I say comfortable I mean a modest house in a nice suburb with 1 car.
At the same age my parents lived in a very exclusive street in a Georgian house. 4 kids, 2 cars and importantly, one salary! There is no way DH and I could replicate that. When they divorced my DM bought 3 properties with her share of the house sale and is now asset rich. If DH and I did the same and split our equity I'd be lucky to afford a crap semi in an undesirable area on a full time wage. It's mind-blowing the shift. Frustratingly my DM doesn't see this

Yes we are in a similar position of earning just enough to be highly taxed and not be eligible for any financial relief: tax free childcare, universal credit, child benefit etc. The advice we have received is to load more into pensions, to avoid the high tax bracket. It’s difficult and takes financial planning (if your salary rises each year, your tax code changes and your pension amount will have to change with it). Ultimately the taxation of the super rich sucks in the UK, which means HMRC absolutely pounds the middle class, assuming they aren’t quite rich enough to leg it or hide funds in offshore accounts. Personally, I think taxation needs to be spread more evenly, so the country can afford its schools, hospitals and a regeneration of our sewage and drainage systems - all of which are most urgent. Good luck OP!

It’s partly your life stage and the cost of housing in London. The monthly rental of the very modest house in which I grew up is now more than my parents paid to buy, likewise houses I viewed for 105 -150K, 25 years ago are 800-1m plus. If you go back pre-war, many working class families were in small private rentals or living at home until they married. People didn’t usually expect to buy as a single person and we had a lower mortality. Taken together with in-migration and London real estate being viewed as a safe haven for foreign capital, available stock is low and prices relatively high.

I completely understand what you mean but you won't get completely sympathetic responses here. Just shows how things have changed though, what we thought were imaginably huge sums of money when at school aren't anymore. The idea that each generation would be better off financially or prospects wise has been completely trashed. We live in difficult times.

I understand where you’re coming from, the money doesn’t go as far as you would expect it to and doesn’t equate to the standard of living you expected. We live a comfortable life but definitely would have ‘expected’ to be living like kings on this salary, but the reality is different especially in the south east!

Over 40 years ago we moved out of London. We were both public sector workers on low salaries. There was no way we could pay rent, live and save to purchase a property. We moved to the Midlands a fair distance from family. I'm now widowed and live in a 4 bed Victorian terrace by the sea.
I'm sorry but the situation in London has been dire for that long. We knew there was no chance of being housed by a local authority unless I got pregnant and were housed as homeless after spending ages in B&B. A 1 bed in a grotty area was beyond our reach to buy. The rent on a studio flat in a converted house took half our combined income. So we moved. It really isn't new in respect of London. The only people I know who have purchased in London inherited a sizeable sum, without that it would not have happened.