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.

We have the Barclays equivalent! And it seems really difficult to spend the points or use the voucher!! Really difficult.

What I disliked about our joint CC is that we could only set it up as a spare card on an individual account, we couldn’t be joint card holders. Don’t know if that’s true for you but I’ve now switched to individual Ccs and it’s much better. You both need access to your own statement.

in terms of the amount, it’s less than we spend. Depends on lifestyle etc.

The easy way to do it is just to look at your statement and see. If you bank online it's easy enough to extract your account into Excel and have a quick look. I'm quite horrified at how much I spend on eating out and coffees etc. It's irrelevant if your paying on your credit card if you pay it off in full every month, it's what any smart person does as you will get some 'reward' for it

Yes this!!! I'm the second card holder. My DP has the app and access to the account but I don't, I have to ask for the statement and then feel like a noob!

We do this too although not high earners.

We pay it weekly which helps a bit.

We have some great flights but yes it weird as it doesn't come straight out of your bank account so you can't easily track.

Every Saturday DH has a special book and diligently writes down all the AMEX spends then sends me a "bill" for what owe him.

( a what's app pic of the list and total)

I then transfer this amount from starling. When reconciling monthly accounts in starling not a true picture as most of went though the AMEX so £461 to DH but what the hell on!

We have various card in various names to max out points.

We don't earn as much as you, but if we did, I'd still find £5k a month pretty eye-watering, especially since there's only the two of you.

Have you thought about taking that statement once a month and analysing exactly what you spend on each category of purchases? If it is all on a spreadsheet or similar, you could then see where it all goes, and whether you are happy with that level of expenditure. For instance. if you're spending £600 a month on food, and then hundreds more on eating out and takeaways, er... it might make you think twice about whether you are spending wisely or not.

How much was your mortgage in the first place, did you have childcare costs? Ours were c £40k a year at one point for example. They cost more than the mortgage.

@Bs0u416d we do similar, earn similar and our cc bill is similar. Paying a bit more attention with VAT on fees etc and recently realised was paying very little attention. Still we get about £300 of JL vouchers a year which is helpful.

In terms of benefits the best one for me has been Amex platinum cash back- 1.25% cashback. Points, avios etc are only a better deal if you’re the sort of person who’s going to maximise the benefit (and people get really into it). Can’t go wrong with cash back.

We don't earn as much as you, but we are high earners and mortgage free. I would say we probably spend around £3-4K* a month but I tend not to worry about it too much as it would be easy to cut back. Our non-negotiable costs are relatively low.

For those wondering why OP has a mortgage - can't speak for OP but certainly a few years ago I had friends in the financial sector who had mortgages they didn't "need" because mortgage rates were so low that they could invest the money borrowed and make money by having a mortgage. I was called an idiot for not doing the same, but I would much rather know I own my home and I wasn't sure how happy I would be if mortgage rates went up (as they now have).

*sorry, have just realised that this is a highly misleading figure as £1500 of it is payments into savings accounts and pension

What card gives you John lewis vouchers? Sounds amazing

It's very sensible to accumulate "free" perks by using a credit card.

You also get insurance and payment guarantees of sorts with a credit card versus a debit card. Plus, you build up a credit history.

You feel it's unscrutinised because you don't hold yourself accountable. There should be absolutely no difference in whether you should or shouldn't buy something depending on the card you use (in your financial situation): this is a mindset issue, not an affordability issue. You should always know how much is coming in, how much is going out and where it's going out. Credit card money isn't free money: it's almost the most expensive money you can have if you don't clear your balance each month.

Separately, as a two-person family with such high earnings, unless you're earning more on savings and investments than you're paying out on mortgage interest, you should be clearing all debt asap.

Same here. I now have my iPad logged into the account. It’s better.

I get all that, but if they have been earning that much for a long time, then it's madness. You're just paying more money to the bank than you need to. Also that's why you shop around for a mortgage so you get the best outcome for you. Anyone who is excessively spending no matter their income when they have debt is a fool. I don't think most people do actually do the maths

Don’t feel bad…we’re 10+ years older than you, on the same income, and have been throwing loads at the mortgage (which we still have).

It's written as though you're addressing high earners, not describing yourself!

@Namechangedforthis25 John Lewis do their own credit card. I put everything on mine, pay it off each month and then twice a year I get a bundle of gift vouchers through the post. It’s great.

From the perspective of someone who isn’t a high earner… do you feel that you get value from what you spend? That’s what I ask myself when I’m looking at my outgoings.

Yes we don't have debt other than our mortgage. We clear the credit card off monthly.

We have a Barclaycard (for the avios). Joint cards, joint access to statements, app etc.

@Bs0u416d

The Barclays app is really awfull compared to Amex as the second cardholder cannot have the app access.

And ( I think) there's no companion voucher in Barclays just the upgrade voucher and bonus Avios

The best thing is to use AVIOS to buy a reward flight seat in club world using a companion voucher. It's even better if you go from Madrid in Iberia as lest points. (Although I like the BA experience)

We went to SF last year and LA using vouchers (pay for tax).

I do none of the Admin on this - that DHs hobby.

Also get a for fee platinum Amex for lounge access dining credits and other perks.

Anyway- some advice you never asked for

Excellent question. I suppose maybe not and that's why I have posted 😂. I feel like we dont do anything extraordinary but I think it's been a slow creep or easier living perhaps.

Well, it depends. If your terms and conditions of paying off the mortgage include a flat early repayment penalty, you might find it'll cost you more to pay off a small mortgage early than to pay the interest due if it runs to the end of the term

If you enjoy spending it - you’re not wasting it.

What's the issue with your spend?

Me and DPs take home is £10.5k a month, we spend £5k on living & essentials. Save £2-3k a month and a couple of grand on extras.

From what I can work out you're earning more (we're 200k per annum pre tax) and only spending 5k a month? So you must be putting 5k+ a month into savings? How can that possibly be bad, that's saving loads

We do exactly the same and I do sometimes wonder if we’re spending more as a result. Having said that, when it was just our household expenses (we have since linked with the business card), it was enough to get us a companion voucher so we decided it was worth it for that