Reality check - are we earning enough?

[secretgoose]

Me and my husband run a small business together and it’s ran as a partnership.

Gross profit (before expenses) is around £80k.

Our net profit (after expenses) is £66k, so £33,000 each is what our recorded salary is. And that is legit. I don’t play stupid games with HMRC and record lower profits than the reality to avoid paying tax. Because I just think that’s dumb tbh.

I just saw someone say they’re on £35k per year and that’s “bad” for a 35 year old. Well I’m 32 and my husband is exactly 35. So it’s just made me worry.

On the flip side I have no debt (except the mortgage), have plenty of free time. Can take days off as and when I like. I’ve got 2 holidays this year. We’ve got no kids and don’t plan on having any.

Dont want to say what we do as it would likely give out identities away.

Whats everyone earning? Should I/we be earning more?

YABU = you’re fine
YANBU = you should worry

I’m 42 and earn 28.5k
if it’s enough to afford what you need and want and you’re not struggling, then it’s fine

Sounds like it’s working just fine for you.

You are extremely fortunate. Comparing yourself to strangers on the internet is crackers. You sound like you have a good life. Maybe you'll grow your business and have more money in future. Maybe life will hand you something else.

'Should' is judgemental. Maybe I 'should' have had a better life and more money and not had the shitty (ex) husband and everything else that life handed me. But I got what I got. I earn less than £50k but I have no debt, have a beautiful son and good friends. My health is crap. My job is ok but stressful. If I'd have had different circumstances, then maybe I'd have climbed higher and had more money. I'm certainly capable...but that's life.

What do you want? If you have ambitions to have more money for a reason then go for it, but there's no 'should'.

66k without kids is fine. Children are expensive. For example - my food shop each week for 5 of us (dd1 is 18 and doing a levels, and dtds are 14 so essentially adult size portions) is £275-£300. I bet yours is nothing like that. Doing a job you love is so valuable. Cherish that!

Sort a pension out though! 😉

It’s all completely relative. What’s your mortgage, outgoings, pension, savings? As long as you feel comfortable, not sure why you feel bad?

Thankyou. I’ll stop worrying. I’m really really help. I would like more money, but who wouldn’t? I have everything I need. I don’t really yearn for “stuff”.

You’re both earning below the average 35 year old by between 5 and 10k a year. Is the business growing, salary likely to increase in the next 5 years? If it stays the same-ish he’ll be significant below an average 40 year old.

Meant to add if you’re happy and living life how you want to, it doesn’t really matter.

Does the business have intrinsic value? Because you are investing your time and energy in that as well.
Are you paying substantially into a pension, having sick pay?

If the value of the business is growing and you have incomes and pension, then that’s fine. If you stopped for maternity leave, would the income from the business halve?

It sounds as though it’s ticking over at a sensible rate allowing for quality of life.

If you have enough money to live your life how you want, and also save for the future, then you’re fine. Personally, it wouldn’t be enough for my household, but we have 2 DCs so need to be providing for them and also saving for their futures as well as our own. If we had no DCs we wouldn’t need as high an income as we have now.

yeah it is all relative. I guess the thing that irks me is holidays. I have peers who seem to go holiday every other month but they are living at home with their parents which I need to bear in mind.

We have a mortgage and house we love.
Currently £7k in savings. No debt other than the mortgage. Car paid for, don’t believe in getting pricey cars and paying monthly for them.

both paying into private pensions where the gov puts in 25%. It’s costing us a bomb but we ran the maths and it is what it is. Can’t not have a pension.

outgoings are a bitch. But whose outgoings aren’t. We have £112k left on the mortgage so small really and we got a shorter term mortgage so it’ll be paid off in 14 years time.

so yeah, I guess comparing my life to friends who are going on tons on holidays might be silly when they live with their mum. And comparing myself to people on £80k + but they’re running around like blue arse flies is probably silly too.

thank you. I just weren’t sure on what other people’s takes would be.

When I was your age, I hadn't even managed to buy my first house or start a pension. You sound like you've got your head screwed on. The problem with your peers is they all seem to be living a lifestyle fuelled by Instagram or something, but loads of holidays while being subbed by parents is silly. . I've got far more respect for what you're doing. You should be proud of yourself. Keep going.

Maybe try and get a business mentor? That would be sensible. Get into some networking with local businesses perhaps. Maybe focus less on your salary you're drawing and more on what you want to achieve and how you can get there?

You don't need to be comparing yourselves to others. If you're happy then that's enough for you.

That being said, cost of living is going up and up. I would look at how much scope there is for increasing your earnings in order to keep up. Otherwise I think you run the risk of suddenly finding, in a couple of years, that your happy spot needs to be a few grand higher. The positive is that you know how much you need to be happy, so you know what you're aiming for in the future.

I guess I'm in a slightly similar position, in that what we bring in now is fine. But I'm really aware that the pay rises I get are not enough to keep up with cost of living, so I'm trying to work toward promotion to compensate.

I just saw someone say they’re on £35k per year and that’s “bad” for a 35 year old. Well I’m 32 and my husband is exactly 35. So it’s just made me worry

Why on earth would a random comment from a complete stranger make you worry?

Comparison is very much the thief of joy here! You have chosen a career and lifestyle that works for you. Other than making sure you have a pension that’s a very healthy way of living.

I changed career mid thirties and had a massive drop in salary (to lower than yours) and absolutely no regrets.

edit: just saw your update re pension, and small mortgage - all seems very sensible!

Kids are bloody expensive.

if no kids then you’re laughing

How much do you put in your pension? If it is 25% each, which would be reasonable, it leaves 50k for both. I assume you've counted NI in your tax figure too?

It's not a lot but if you are not big spenders and stick to being child free, it's just about OK.

How much is your mortgage monthly?

Earning enough for what?

I don’t even earn 30k a year but do you know what, my life is less stressful than a lot of people I know who earn more.

I don’t need the newest car or designer clothes to be happy.

I value my time and peace more than those things.

It is so so relative. DH works (self employed), I don't work, and we have two kids on a total family income of less than £33K. We're certainly not very well off and are not currently paying into private pensions but we get by and have a lovely life. But then we live in the north and have one cheap holiday a year and absolutely don't give a shit at all about 'nice' stuff.

He puts in less than me because he has a small pension from a public sector job.

it is also worth noting our take home pay looks less than it actually is as we claim 25% of our bills against tax, the interest on our mortgage. My husband bought me an iPad for my birthday and that was claimed as an expense.

Actual stats on national earnings are available; you don't have to request anecdata on MN, which tends to skew richer than average. (Average FT salary is £37k, but a lot of mumsnetters simply refuse to believe this. If you listen to a lot of people on here insisting that their 60k makes them a "middle earner" or whatever, it's only going to make you feel worse). Try the "average UK salary" page on forbes.com

This. What's 'enough' depends on the role and the hours worked. If you're both working part time as cleaners, it's great. If you're working 80 hours a week providing professional services, it's shit and you need to charge more.

And that's before you consider lifestyle, flexibility, being your own boss etc etc.

But don't compare yourself with what MN says about money. Most of it is completely out of step with the average person.

Honestly, this is such a daft question.

You assess whether you earn enough based on what sort of lifestyle you want to have. And that takes into account things like whether you have kids. And what you can save for retirement.

Only you can answer that. Comparing to other people who live in different parts of the UK and have different life and family situations and different life expectations and goals will not help you.