To think that on higher incomes, having no money left often comes down to spending choices?

[ThatGoldZebra]

Sometimes when I hear what people are earning, I’m surprised when they say they have no money left at the end of the month.
I understand that everyone’s circumstances are different but at a certain income level it feels like spending choices and lifestyle play a big role. AIBU to think that?

Well, obviously.

I have at times been very exasperated with friends who've complained about having no money when they've chosen to live in very large, very expensive houses. I mean, what did they expect?

Often. It depends. If a child has SEN and isn’t coping with mainstream state then mainstream private is often the only way to keep the high earner in a job. High earning jobs are in cities where childcare / commuting / housing costs are much higher than elsewhere. Anyone on £100k living in Skegness is rolling in spare cash. Anyone in London on £100k is very much not.

Spending choices and lifestyle make a big difference at many income levels tbh. Not just the wealthiest.

The choice is often where you live.
Obviously jobs are often in the SE but there's whole areas of the UK that are perfectly nice to live and massively cheaper than London.

This.

You need really to quantify what you mean by higher incomes.

Because there are obviously cases where you're right. But if what you actually mean is say a household with two FT, slightly higher than median earners in the south east who have childcare costs, no bank of mum and dad and were too young to have ever had access to cheaper housing costs so what you actually mean is them having the temerity to have a kid or two, it's a much less persuasive point.

Because earning a decent income in the past, generally gave you a decent quality of life. Now, due to housing costs, people being dragged into the higher rate of income tax despite not earning a vast amount & repaying student loans, you are not afforded the same standard of living you would have had 20-30 years ago.

Almost everyone can cut things, but I don't think work is paying enough to have a proportionate quality of life for the effort we put in at the moment, not a dig at my employer, but at the economy. Yes, I could cut a bit and have a bit more cash, but I think it would take more trade-offs than I think are reasonable. I certainly don't think we are excessive.

Yes definitely but a lot of people don’t realise this because their lifestyle creeps up.

Not necessarily . Maybe you have a high earning job in London. Even travelling in twice a week can set you back a hundred pounds per week, so that’s four hundred pounds gone. And you may have a slightly bigger house, so you’re paying £200 instead of £100 council tax per month, so that’s now £500 per month gone. Plus paying for prescriptions, dentists etc . It all mounts up. And that’s without even thinking about it.

Mmm, we've had a real decoupling of income and wealth. If you're under about 35 and you didn't start out with any family capital, even just a few grand towards a deposit, it's so much harder than it used to be. And than it was for people with less income than you in relative terms a few decades back. This is a substantial problem.

Well, ultimately for anyone on any income big or small, having any money left depends on spending choices.

£25 per commute one way? Surely that should have been taken into account when choosing somewhere to live or to work.
And most people have chosen a larger house, it’s not a passive action.
Most people have to factor in dental costs and prescription charges ie they ARE noticed.

I often think it’s the opposite- people on lower incomes are often very ignorant/surprised/naive of how much is actually left after a high salary. Half plus gone in tax, often paying for necessary CPDs and insurance etc I knew a back surgeon and he had to hand over a third of his very large salary in insurance , then over half in tax. Still left with loads but not the ££Ks people assume.

“Spending choices and lifestyle play a big role”.
Well yes, that pretty much covers it. What do you spend money on if not what you chose to and your lifestyle?

People generally look at what they can afford, then choose something just inside the limit of what they can afford, in terms of lifestyle.

Then a fool starts a war or a PM trashes the economy, prices hike, interest rates go up - and what was affordable in 2023 is now a struggle.

It happens in all wage brackets.

ETA a "what" in the first sentence.

Just trying to illustrate how a seemingly larger salary can soon be eaten away.

This. And the result is the never ending stream of MN threads on the subject.

No one has the same standard of living as 20-30 years ago. I get to the end of the month and think where did it all go. Despite earning more i can't afford things now that I could 10 years ago. Life is just more expensive overall

FFS another divisive, goady and insincere post. It's constant at the moment.

Well obviously it’s the £10/mth you spend on Netflix and that Costa you had the audacity to purchase last month.

Totally agree

Something I've observed is that for people who are higher earners (especially those who grew up wealthy) they have lost sight of certain lifestyle choices being huge luxuries, and see them as standard when in fact they are unaffordable to most of the middle class, certainly in combination. I am thinking particularly of one parent being a permanent SAHM, private schooling, having more than two children, each child having their own bedroom, detached house.

I see threads from people who have all of these things but otherwise living frugally complaining that they don't have change at the end of the month from £100k, even £200k salary. But as I say, most people can't afford one of those choices, if you choose all of these then you need to be a very high earner to support them. It's not about expensive clothes or holidays, these are the luxuries that are unaffordable these days.

This!!

Generally i find people dont understand that for example £150K isnt whats left in your pocket.
There is around £63K in tax and NI (scotland) so take home pay around £88k.

Thats around £7k a month which is still huge, but not £12500K which i think people think.

£7k for a 5 person family with 3 children and a mortgage and food and all other things doesnt go as far as it once used to.

Yes of course, that is obvious.

There are threads on here about people who get £3k+ every months after tax and are struggling but then you have people on less than half than that and they manage.

I’ve lost count how many times a high earner on here has said they have no money but then state that they live in an expensive area, kids go to private schools, do multiple clubs, use expensive makeup/skin care etc.

Some people will always live above their means.

No one who works should be struggling for money and it’s shocking that the country is like this now but for the higher earners it is 100% a choice.

The higher earners could either choose to spend less or choose to earn less if their argument is that they have to pay more tax etc. but there is a reason why they choose not to earn less and that’s because they know they’d be worse off.