Higher earners, are we spending/wasting too much? (trigger warning)

[Bs0u416d]

We've recently started putting all our joint expenses through a credit card in order to earn airline points, my DP's idea, not mine. We put groceries, fuel, pet expenses (daycare, food, vets), holidays, dining out, clothes, hobbies etc through the card. We pay for mortgage, bills etc separately but jointly. Cars, savings, pensions and various insurances etc are done individually. We're averaging nearly 5k a month on the credit card and this feels like quite a lot. I feel like the credit card encourages spending because it is unscrutinised, in a way that debit card spending isn't and I'm not sure we get the return in airline points. We're two professional adults and we can afford this, I just wonder if we're wasting money. We're a 300k+ household pre tax, to avoid the drip feed. Can't really ask friends as its awkward.

Can you afford it = yes

so up to you if you want to re evaluate how you spend your money

We have a similar income but family of four, spending hard to track as we spend around £16k pa on holidays but from a savings account. If that was via a credit card it could be headed for 1.5k a month.

Other spends would be
500 sports club family membership
500 kids lessons/clubs/childcare
650 groceries
650 fuel & train fares to work

probably another 500 on clothes, eating out, gifts etc

We could be not far off 5k. We don't use a credit card, its on debit cards

Doesn’t sound too bad to me on those salaries in isolation, but it depends if you have kids, if you’re happy with how much you’re putting into pensions and other savings etc etc.

On a separate point, spending should always be on credit card if you’re able to pay it off each month as it sounds like you are. You get points, which can be very valuable (i.e. BA companion voucher) but also spending is protected unlike with a debit card.

Thanks. This is ever so helpful, reassuring and exactly what I was hoping for. We probably spend similar on holidays and whilst we're a family of two, we have just taken my niece away and we're taking my sister and niece away in Oct so holiday spending is not just the two of us. The credit card gets cleared monthly so it doesn't cost us anything, it's just odd having a 'bill' got your life style every month and I think that is what's given me pause for thought!

I'm probably being dim, but I can't work out what the trigger might be in the title?

Trigger warning? Whats that about?

Im not sure I come into the category of a higher earner but certainly spend as much as I can, I enjoy it.

Thanks. I think this is my DP's perspective. It just seems a bit counter intuitive to me.

We earn half of that and £5k/month is all our spend. I just went through bank statements from the last year and checked our budget - we know what we spend every month (on average) on all the different categories of spends and have saving pots within the joint account to balance out spend over the year. We obviously couldn't afford what you can do but as for if it is wasteful surely that depends on your goals and plans. We don't eat out much for example as we have other priorities so I would feel loads on a meal out is wasteful but I am sure stuff I think it is important to spend on would be wasteful to you

Because at some point someone will come along to absolutely trash me or call me out for humble bragging etc

Why is it 'unscrutinised'??

If that's your worry just start scrutinising it by checking your statements!

Or even better set up YNAB and it will bring all the transactions from that and other cards / accounts into one place so you can really see where it's all going.

We put a lot of our spending on a CC too and repay in full every month but I highly recommend getting an app like YNAB or Snoop which will categorise all spending so you can see how much you’ve spent per category each month (if you’re keen to stick to a rough budget eg eating out £200, clothes £100 etc). (This is across all
banks and shows all savings too and overall balance)

You probably need to complete a full budget review using a template like the one on the Money Saving Expert website. Input how much you spend a month / year on everything (including one-offs / randoms - dentist, window cleaner, Xmas presents etc). This will give you an idea of how much you want to spend a month / how much you want to save. You could agree to try to stick to a certain amount per pot per month and then keep track using the App

As top tier earners, you are putting money into the economy that benefits others, don't worry about it.

It was light hearted and mostly because similar posters get lampooned for asking about spending and budgeting on higher incomes. It wasn't meant to be offensive or detract from actual trigger topics, sorry.

As long as you don't have debt, but I see you have a mortgage so why are you spending excessively? Also as long as you pay your credit card off in full every month, if you don't you're a fool. I don't think there's any difference paying by credit card or debit card, I use my credit card because I get cash back at the end of the year, and I have no fees. I've always done this. It's cards and online shopping that makes it so much easier to spend, if you pay by cash it's much more noticeable

Amazing. I think this precisely what irks me. I feel a bit out of the loop on our own spending. I'll definitely look at those apps.

No need to apologise, I was just confused 🤣

Tell them to go scratch their fannys.

Earn similar with kids. Think £5k seems reasonable- as long as you are otherwise comfortable with where your money goes.

i do get what you mean about points though - just got the BA AMEX and reached its offer to get 30,000 points. But now im chasing points to get the companion voucher and have been wondering if I’ve been overspending to get that.

I'm actually shocked you earn that much yet still have a mortgage tbh! We are high earners, not as much as that and paid off our mortgage years ago. We spend on whatever we want, go on expensive holidays etc so not like we scrimp so it does make me wonder what your wasting your money on

I'm not really certain we are spending excessively. We over pay on our relatively modest mortgage and we save and pay into pensions. It was more a case of worrying we were perhaps outliers, that credit card was worse than debit spending and whether there was a more sensible way of spending, I suppose.

We're 35 and 36. Our mortgage isn't huge by any means. Now I feel bad 😞. (Light hearted). When did you pay off your mortgage?

Ok, so tell them to fuck off

I cant stand all that

Enjoy life OP

Once you start with an app you’ll wonder how you coped without it! Makes you feel much more in control but also so eye-opening when you realise you spent £600 on food for example or £150 on random gifts in a month, it all adds up, the app makes you totally accountable for the spending when it’s there in black and white

Hmm silly comment - op might have just reached that salary level and most mortgages limit overpayments

also in London where the typical house is £800+ earning £300k gross is more like £180k net - add living costs and childcare. Well just do the maths

I don’t know many people who have paid off their mortgage despite being in this higher salary bracket

We earn nowhere near what you do but have always put every single expense through a credit card. All you need to do is mindset it as a debit card, it’s as simple as that. We had a weeks car hire in the USA and a few nights in a Hilton with points one year. It’s definitely worth spending with a credit card. DH was doing this before we got together and we have now been doing this for 28 years. He originally had air miles but now has cashback and I do another system. It’s taken us to Legoland, Sealife Centre a few times, various museums and days out, plus ferry tickets.

Spending is relative to your income. Based on your income not excessive at all, someone on £30k per annum - absolute madness. We all spend according to our relative incomes and as long as you are not incurring debt you can’t repay entirely reasonable within your income stream.

Not sure why you think it’s an issue as you are covering all your bills and saving as well , unless growing up life wasn’t quite as comfortable and you are struggling to reconcile expenditure now v growing up. Using a credit card makes sense as you are paying it off in full and getting rewards for something you value ie flights for travel. Perhaps it’s seeing the total each month on the credit card v spend on a debit card from your current account which is shown in a different way so you don’t actually see the total spend !