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?

Hard agree. Private schooling is the one I think of. A lot of rich people seem to see that as a mandatory cost instead of a luxury item that they choose.

Like many posters here who will reel off how hard it is to survive…and then reel off a long list of spending on non-essentials that to them are essentials.

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
Of that, include £1500 towards a mortgage and the same towards childcare. Add council tax, higher utilities, 2 life insurance policies, private dental care, etc...and before you know it, they are left with £500 monthly disposable income.

Of course there are choices but there are also bills that can be very similar across the board no matter what your income was.

When the girls were small and I was trying to work out if we could live on DH's income, we could only do so much to reduce spending as only a tiny bit was discretionary. Yes, you can economise to a degree on heating, water etc but only up to a point if you want a good quality of life. Food was the main thing we could save on, but again, only up to a point.

And there can be a lot less difference after tax, transport to work etc between incomes than you think. It certainly isn't worth people in the middle fighting about it. Better to unite against the greedy megabucks types who are hoovering up more money and making life worse for the majority.

This is so tone deaf!

You still cannot see many of these are luxury items. The comparison to having a home really doesn’t work.

A roof over your head is an essential. Having a holiday is not.

I say this as a high earner myself but from a poor background. And I see a lot of my fellow high earners who shift their luxury spending into the “essentials” category and feel hard done by.

Personally I see nothing wrong with wanting a comfortable life. But I can recognise that for what it is instead of claiming “nice to haves” are necessities.

It is usually, yes. However, we very much need people to do it, unlike lots of the other things that are also choices.

And if OP is the sort of person who thinks that's a useful addition to discourse, which of course she may not be, that makes a difference to whether she is BU or not.

Oh very much so. There were times when our household income was well below median when DC were little, but still had the same or more disposable as people I knew who earned well more in the south east. And someone at that same age and stage as we were 10 years ago would find it harder than we did, on the same real terms income, because so much has gone up.

Location and age are huge, huge factors here.

Absolutely is spending choices. I am that person. I earn a very decent wage however where I've chosen to live eats away a huge chunk of that. Plus my car and my general spending habits. Self inflicted!

Careers - and chance of high income - where you live and what you spend your money in are all choices - how free those choice are depends on many influencing factors but there is always an element of choice - just some choices have consquences.

I think what you mean is that more people than ever plead poverty or feel the lifestyle pinch as inflation hits and do not acknowledging that they do have usually some agency to prioritise where money goes.

DH always say lifestyle rises to match income - and when incomes drop compare to spending power as been happening in UK across the board more people do start to feel the pinch and it does make them feel unhappy.

Housing costs sucking up more and more disposable income been happening for decades and for every 10% increase in house prices there a 1%

• drop in fertlity (https://res.org.uk/mediabriefing/the-housing-bubble-baby-boom-spiralling-uk-house-prices-mean-homeowners-have-more-kids-but-renters-postpone-starting-families/ - goes into more detail) which has wide and long term effects. Declining house prices tends to be a negative thing poltically though.

I think it can do yes. But this been be true at both ends of the income spectrum.

Eg, I've got friends on low income/unemployed and on UC who are constatntly moaning they have no money. Yet smoke and have a chippy tea every Friday. Mind you, I don't blame them for wanting some small joy in their lives.

At the other end I used to know a woman who told me that she was a skint as I was (I was a single parent student). Yer her and her DP were putting £3k per month into savings. My entire income was less than that.

And on here once i had someone argue with me that her families high income wasn't actually that high. She countered all my points with things like "yes but i live in the SE where house prices are higher". So do I. Turned out we live in the same town. She tried claiming she needed to be in the most expensive part of the town as they needed to be near the station. Where I live (one of the cheaper parts) is closer. She honestly couldn't seem to see that a large house in the nicer part of town was a choice. It may well have cost them a lot to live there, but living there was optional.

These threads are so weird but I guess it just shows how little empathy and understanding people have about people who are different to them. Rich people who are confused by other families not having "just £20" for something, less well off families outraged that wealther families claim not to have a lot of cash.

Yes, it's different priorities and spending. different expectations. Different places to live. Often changing situations that evolve over time.

So yes, we earn a lot. And no, we don't have any leftover. But that's because we didn't always earn this much - we've had some really really lean times in fact. But we were (mostly) doing okay. And then costs went spiralling and we didn't properly appreciate the impact on us - our mortgage increased from £1200 to £1700 for example but we didn't immediatrely rein in spending elsedwhere to compensate or appreciate how not being able ot increase our earnings in 10+ years would impact us. Because yes, we were a bit silly and also, to be fair, because we werent' exactly living luxurious fancy lifestyles.

And then on top of that, we had a bunch of additional things that cost a fortune, most notably supporting DS as we figured out what his challenges were because the NHS was as much help as a chocolate teapot. And now we have quite a few debts. And we're slowly paying them off so I guess there's that - we are no longer getting DEEPER into debt every month.

Me and DH made mistakes. We also got impacted by things out of our control like interest rates and cost of living and having a child who needed more support that we could access for free.

I'm slightly embarassed we don't have savings. And I'm really committed to finding ways to getting on top of it. But I guess friends in real life who judge me like OP probably does are people I don't want to stay friends with.

To a degree, yes. But higher earners are suffering severe fiscal drag with frozen income tax thresholds, plus the dreaded 60% tax trap, nursery fee cliff edge and ideological VAT on school fees . They are also facing the same inflationary pressures and property costs that is affecting most people.

I think that the people you speak of have middle class salaries and middle class expectations, but our joyous tax system, runaway property costs and inflation mean that awesome sounding salaries just don't provide the lifestyle they think they've earned. Some accept this and cut their cloth accordingly, others keep on spending and get into trouble.

To an extent, but also to earn that income, they probably have to pay for childcare and potentially live in an expensive area to access the work or have an expensive commute. Also, at the point of earning £100K they will reach the level of paying 60% of it back in tax ....

This is inflammatory, I think most of us on a salary - even a big one - are much more in the same boat than the super rich!

But yes, of course a lot of financial pressure is spending choices - but that is the same at any income.

I live in an expensive area, it is true. But there isn't a huge amount of option to live a reasonable commute from work (I still commute 1 hour), and it is hardly luxurious (4 bed semi with tiny garden and no off street parking). Also somehow it is only those of us who live in London who are told to move somewhere cheaper or shut up - a lot of people could move to Burnley or somewhere and buy a house for <100k and lower their expenses.

And it is also lack of understanding about salaries - take home on 100k, is about the same as two 35k salaries. I just put in the benefits calculator for someone around me with 2 kids at nursery and minimum wage jobs, they'd get almost 4k/month in benefits - this is about a 70k salary.

You say that, but back when I took home less than £2k (ie less than 30k salary a year before tax) i was spending about £25 on my commute each day. Yes that added up to about a quarter of my take home pay, and the commute is 1.5 hours (I still do it, although fortunately only twice a week now) but guess what it's a trade off? If I wanted a job with potential to earn well, those jobs are found in the city and I definitely couldn't afford to live anywhere in the city as the rent would have been more than my salary so I live in a small commuter town where the housing is much cheaper. All in all it worked out better financially.

Fortunately the sacrifice was worth it, I got promoted and now earn more, and since COVID I haven't needed to commute each day. I do however now have a child in nursery which costs more than the commute ever did!

I think there’s a bit of a disconnect over the cost of living in different parts of the UK.

In London that normal terraced house is going to be a £3k+ a month mortgage for a young adult. That’s ~£500k or so of borrowing.

Nursery fees in my area are £2.3 - 2.6k a month now.

So your mortgage and a nursery place could be 100% of the take home pay on £100k.

I agree. On a higher income you start to think things are essential when they're not.

This. It’s all about priorities, whatever the income.

But would you say that high achievers deserve some reward for their expertise and hard work? Read the post above re: the cost of a run of the mill house in London plus the cost of childcare. There is literally no change out of £100k salary.

Yep. I know someone who claims they have no money yet are on days out and spa weekends very frequently!

spending choices and the government taking 50% to spaff up the wall.

I think everyone deserves reward for hard work.

You make a valid point but it also works the other way. If you are in a low earning household you are assumed to get loads of 'top ups' and that equates to the same as a higher earner. Many low income families only receive Child Benefit and shockingly have to pay mortgages and insurances and fuel or bus fare to work and utilities and council tax and private dentist fees too.

What do you consider ‘higher incomes’ to be

This is true, and equally it's possible to be quite high up the income scale and still get UC if you have childcare plus private rent costs, when living in an expensive area. There are people who are higher rate taxpayers who still qualify- not many, but it's possible. People don't always get what a complex system we have. For example, there are frequently posts on here from people who think because they put their income into a UC calculator and it came out showing no award, that's a universal limit rather than one specific to them.

It's all part of one big problem, I think, which is that wages alone are only part of the story.

Higher earners are suffering more fiscal drag than others, so there's that. Some jobs (like mine) are also tied to London.