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.

A mortgage is most people's longest, biggest and most expensive debt! This is like saying I'm completely healthy, apart from these 25 chronic illnesses I have.

Are your cars on finance?

I'd clocked the Iberia thing as was looking at flight to Peru with my mum and even the avios/cash cost on Iberia was fantastic compared to BA.

We're actually doing through LAX to Hawaii next spring but there doesn't appear to be any award availability so we're flying virgin.

I think my DP needs to get better at this particular hobby!

Out of curiosity, why not credit cards with their perks.

I feel like the credit card encourages spending because it is unscrutinised

We found this when we switched to spending only on a credit card. Although we're both sensible people without particularly expensive tastes and we didn't really notice any change - there definitely was one.

Just a fairly subtle, subconscious shift in our attitude towards and the the way in which we were spending money. We realised that whenever we used our cc's for day to day living we ended up spending a few hundred quid a month extra on...well, what seemed like nothing.

Definitely not worth it for a couple of hundred quid in points in our case and we've now knocked it on the head and gone back to our trusty old Debit cards which (apparently!) means we spend a bit more frugally!

Prioritise paying off your mortgage early so controlling unnecessary expenditure to overpay on your mortgage is a good idea.

On payday review your statement & transfer 2/3 of the previous month's treat expenditure as a mortgage overpayment. You can still have a nice time but just allocate a budget for each expense.

I use a prepaid debit card, Revolut, that I transfer a set amount monthly for my personal expenditure. This helps me to control my spending & I save money this way. Once I've spent my allocated amount, that's it until the next month so I have to make it last.

https://www.moneysavingexpert.com/

I'd go to Peru! Hawaii sounds wild too.

We always book 355 days on the flight release date out boing one way then call to add the inbound.

Sometimes DH calls BA Japan to book as their office opens up at 8am local time 8 hours ahead.

Some times also I weirdly give my self permission to spend as it earns points -So that is very unhealthy attitude to spending.

We have plat Amex, BA Amex and Avios Barclays and rotate dependant who has the best offers and new member benefits.

The perfect pithy put down

Immediately I dismissed your idea in my head because our mortgage is very moderate relative to our income. But, you're absolutely right, arnt you. We do overpay on our mortgage but by a set amount per month and I suppose it never occured to me that we could set a monthly budget and then pay off any balance to the mortgage if we didn't spend it all. This has been a lovely, productive thread (for me).

I think so. As long as you don't have a problem paying it monthly, why worry. You would probably spend that much without using the card. The air miles benefit is a big one and will save you so many.

As things are, don't fret. You're OK.

Good luck to you.

Of course, but that's why you shop around in the first place and do the maths I can't take the credit for it, it's my husband that's the smart one in that area. When you're a high earner and getting a big mortgage, as we were, the banks actually want you as a customer and will bend over backwards to give you a good deal (assuming you have good history, and at least this was the case 9 years ago when we upgraded our house). We went into it with the mindset that we wanted to pay it off as fast as possible. It really pays to shop around.

We are pretty much the same as you.

We are currently spending eye watering amounts but can afford it. We have teens, school fees, private healthcare, holidays and all the trappings that go with. The cost of living rises have really contributed to it.

We have gone down the credit card everything and pay in full because we get cashback and the money is better off in our savings for a month earning interest.

We still save and pay into our pension and have sound financial planning.

I use the Moneyhub app which makes me more accountable for my spending, and it reins me in just enough to be aware of what I'm spending - and I do make better spending choices for it. It's free for six months and a real eye opener.

You can scrutinise your credit card spending exactly like your debit card, just check your online statements through the app. You can do this daily 🤷‍♀️

I've always used a broker, which helps. But the maths will always depend on when you can afford to pay off the balance and that's not always predictable when you take the mortgage out, I suppose.

Also you should never be chasing point for any type of reward, it's usually 'cheaper' to just pay for the reward itself. The rewards should just be a bonus for whatever you do. Alot of people get sucked into paying more annual fees for the reward credit cards, which is just pointless. Last thing to add OP, given you are high earners you should be getting all card fees waived. Honestly go shop around and negotiate, you'd be surprised.

I'm a named card holder so I can't do this 😭

Have a similar level personal income. About 15k a month net. Though not resident in the UK.

I do have about 100k of non mortgage debt but it is associated with property refurbishment so for tangible things rather than high living.

I would be absolutely horrified if I was spending 5k a month on cards for day to day living or with nothing tangible to show for it.

I got an entire holiday to Kerala with points once. So yeah definitely put it through you credit cards. I don’t think 5k is particularly excessive compared to your income tbh. As long as money is going into pensions, savings and overpaying your mortgage I don’t see the problem.

Regarding your mortgage overpayment, I would have a play with the calculator on Money saving expert which will show you how quickly you can pay it off depending on your overpayments, and how much interest you will save (although you’ll need to check the restrictions on your mortgage too and whether you’ll get a better rate having it in savings, minus any tax paid on interest)

www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator/

The counterpoint to all my supportive posts 😂. 15k take home? There are two of us and a cat and dog if that helps 🫠. I do have things to show for it, such as food to eat, holidays, clothes on my back etc. But still interested in a more expanded perspective on your part.

We earn a similar amount although with bonuses on top. We spend about half that but we have no pets and no car, and no commuting costs due to central London living. And no adult hobbies or gym at the moment as we have no time for it. We probably have lower every day spending than most on our income, but we have school fees and a huge mortgage, and are putting loads into overpayments and investments. I like seeing our wealth and equity build on our online statements.

I've got the BA Amex and the Barclaycard Avios and I love them. I plan my long-haul in advance and get real benefit from them.
I suspect your husband would benefit from the swathes of advice available here... https://www.flyertalk.com/forum/british-airways-executive-club-446/ and here... https://www.headforpoints.com/

We're the opposite to you I suppose. We have not school fees or kids to pay for. We live in a Midlands city and so our mortgage for a large Edwardian house in a lovely neighborhood is low and we're still saving. I think because of those factors I feel a bit less inclined to pile cash into equity but at the same time like we shouldn't be spending without accountability. This has been a very interesting thread and no one has even been mean yet!

Only if you look at what you spent it on and feel it was value for money. Perhaps the OP is beginning to wonder about that.

Ps op we haven't paid off the mortgage either. 37 & 39 - but we aren't far off, if we threw various savings pots at it we could shift the rest in a year or two

Not high earners but have enough to buy that we want.
Normally we would be about 2k but can be 5k if buying a holiday.
5k every month does seem like there may be a lot of luxuries.
It's fine cause you can afford it but answering your question, yes, sounds like you are wasting money.