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.

DP is a consultant anesthetist in NHS and private practice

does the bulk of his salary come from private work?

I’m just curious as one dc is interested in medicine. I’ve tried pushing them into dentistry but no such luck! 😆

It's majority NHS but not by a huge margin.

Very different jobs, different pressures and of course medicine is a many and varied career, depending on specialty.

Have belatedly realised that you're worried you're spending more than you would be if you didn't have the credit card. If the problem is that you don't have eyes on the credit card statements, can you move the banking app to a device that you both have access to and share the login?

Wrong thread, sorry!

Seems about right to me. We spend around that too.

You haven't got "nothing to show for it". That's like being annoyed that your bank balance has dwindled because you paid your living costs.

Recommended the Amex Platinum instead though. We always make the fee back by quite some margin with the dining credit and Priority Pass.

We put everything possible on one of DH's credit card because it pays back 2% in cash on everything we spend, so it's a nice top up every month. We find it makes it easier to track since so much of it is in one place.

@Bs0u416d I use my credit card for everything but I make sure that I pay it off in full every month!! dont just let it run and have to pay interest! that defeats the point!

We do this and earn a lot less. We just make sure to pay it off at the end of every month. We’re going to Japan next year with points we earned, definitely worth it!

My approach is, so long as we have everything we need, we have a decent amount of savings in case of emergency, our retirements are secure (i.e. paying into pensions) and we're putting SOMETHING away each month, the rest is absolutely fair game. Life's too short not to enjoy something of your hard work.

Get password to the app and main account from your DP 🤷‍♀️

I have a medical degree and work in big pharma as a senior director of medical development. Salary is £156k pa plus £73k bonus this year.

Work 5 days a week (2 from home), all office based. Since COVID and awareness of carbon footprint the company is strict about work travel, so I only go to Europe once a year to attend a conference. Sometimes a Zoom call has to happen say from 7pm to 9pm but that’s very rare. Just trying to say it’s a line of work where there is a lot of pressure and personal/professional reward, but you aren’t necessarily killing yourself working to the bone.

I have a medical degree which has helped boost my career, but I have colleagues in related departments (also to do with drug development but say in medical affairs, regulatory affairs or clinical scientist work) where medical degrees are not required, who I’m sure are on ~£100k pa or higher. Maybe their bonus is a bit less.

To answer the OP’s question, I don’t think you’re overspending.

Do you have a financial advisor? They can help plan things out and give you a perspective on how much you’ll be earning long term into the future vs spend, where you can invest to keep income in, pensions, critical illness insurance, inheritance, etc. Get wills done and things like that in order, it helps with peace of mind.

I second this - you will both be paying an equivalent 60% tax rate on 100-125k as you lose your NI allowance so you will save a fortune in tax by putting it into your pension via salary sacrifice and your pension will have plenty of time to grow. You can currently withdraw 25% tax free at 57 but that might change soon

Do think about this is context of understanding your budget.

Suddenly your lack of budgeting (and habits) become totally untenable - even on your £300k a year.

Two kids is £4k+ a month where I live. It’s a killer.

Yes - although, you can’t use companion vouchers for business / first any more!

I now use my miles (and companion voucher) to mainly just fly around Europe. Now the cost of flights is so high, you can save £1k+ per trip easily - so long as the right flights are available of course.

Can’t you?! Are you sure? It doesn’t state that anywhere I’ve read

We do exactly the same (Less salary than the op, probably about £7.5k after tax) and have done for years - Hilton points which we then use for nights away. Gives the added bonus of the protection you get using a credit card. It's paid in full every month. Agree it's just the same as a debit card , even more easy now with internet banking as you can see every thing you have spent fairly instantly.

OP I'm confused about how the change from debit to credit card has made you realise, surely it's just the other way to the debit card ie a number going up rather than a number going down? Is it beacuse you have to hand over money to pay it?

If you are two professional adults, I don't understand why spending on a credit card is any harder to track than a debit card.
Should be easier as you're presented with a monthly statement.

If it’s from the normal BA card = only economy

If it’s from the AMEX premium plus = any cabin. But you have to pay for the card.

We're reasonable high earners and could probably spend that if we didn't have kids! I guess for me I prioritise pension, mortgage and school fees. The latter means I can't overpay the mortgage. Then household bills, then savings, then discretionary spend. We have around £2.5k a month for discretionary but that does include food and things like phones.
I've never used credit cards to buy though as I'm quite strict with categorising money into different pots/accounts so debit works better - and using a credit card would just give me something else to add to my spreadsheet!

I'm now wondering if I'm missing a trick now using credit cards! What ones do you use? Presumably they are no use though to a family like mine who fly mainly EasyJet and Ryanair and holiday in Eurocamp? I'm guessing you need to be doing more upmarket holidays to benefit?

Ah that’s why then. Phew! Thank you for explaining

Im also wondering about changing my CC for some rewards / points but is there any point if spending is usually about 1-1.5k a month? Do you need a much higher
minimum spend to get any rewards? (We don’t go long haul, only x1 high earner in the house and SAHM so a lot lower income than those here)

Well AMEX British Airways is what most people in the UK use.

You can use it on any oneworld flight (includes other airlines).

So as long as one of those airlines is going where you want… worthwhile.