Where do people get ther money from??? What is a normal income??

[MidLifeCrisis40plus]

I've changed my name for this one, as it's not what I normally post about and I might be opening myself up to a few negative responses.... so, here goes:

What is a normal family income? I live in a relatively affluent middle-class neighbourhood. I work hard and think I've done reasobnably well from life in many ways. But I feel like we as a family are the poorest people in the neighbourhood - we can only just afford our current mortgage (on a medium-sized semi), never mind moving on to something bigger, yet everybody around here seems to be able to spend on bigger houses, more expensive holidays etc - and usually only one person per household is earning. I work part-time and my partner full-time and our joint income is just over £70K per year. To me, it sounds reasonable. Yet there is no way we can afford the lifestyle our friends, relatives and neighbours lead. Apart from the odd high-flier, they seem to be in similar middle-mangement roles to us.

So - what do other people think? What's the secret to moving onwards and upwards? Is it that people inherit money from wealthy relatives? Are we just crap at manging the money we have? Or is normal to earn a lot more than we do?

given that average ft wage is about £25K, either you live with superloaded people or they first bought houses years ago so have small mortgages, or they have inherited, or they are living on credit. just because people have expensive things doesn't mean they can afford the repayments....

I think the secret isn't moving onwards and upwards but with appreciating what you do have.

£70K is loads to me, even as a combined income!

"they first bought houses years ago so have small mortgages"

I think this is often the answer actually. There is a major difference in mortgage size between someone who bought a house in, say, 2002 and someone who bought in 2007. Not that big a time gap but such a huge house price difference.

I agree with the comment that 'The secret is....appreciating what you do have'. I do, hoenestly - contrary to what my post may imply, I'm not particulary materialistic! It's just difficult being out of kilter with the people around you: you can't help but compare. We have to turn down opportunities to do things with our friends because we can't afford them. We somehow seem to be less well-off. A lot of our friends' children go to private school - I don't even want this for our children - but I do wonder how they afford it.

I feel like you (although on less money). Affluent middle class neighbourhood where everyone else has a rather more lavish lifestyle than us. You have to remind yourself not everywhere is like that - with average FT earnings of around £25k, even a household with two people working FT adds up to far less than your income.

Round here, most people have moved out of London so made pots of money selling their houses, or they work in the City, or are are senior executives in business, or corporate lawyers and so on. I'd be bored shitless if I had their jobs.

The comment about house prices is a good point. Although we did buy our first house a looooong time ago, it was a poor investment: we were in negative equity for years and eventually sold it at a small loss.

So much for changing my name, by the way! I seem to have reverted to my old nickname hal-way through these posts!! Very strange.

Some have inherited wealth. I know a lot of people with no mortgage at all. Their parents bought them their first houses outright a long time ago.

Have also name changed.

DH earned £180k last year, I earned £20k (part time). House is worth £1.2m, just paid mortgage off.

So on the face of it, we should be loaded, however, the tax man takes £80k per annum, the mortgage payments until recently were £60k per annum, so we were then on probably the same as Mr and Mrs Jo Bloggs who have normal 9 to 5 jobs but get topped up with tax credits etc.

All our friends are in similar priced houses with similar incomes, but they all go off on exotic holidays every year, we have modest holidays and drive ancient cars. I buy most of my clothes from Asda and Tesco.

DH financially supports his severely mentally ill mum who doesn't have a clue about money.

The main thing though is that we don't owe anyone a penny and don't receive benefits (except CB), so because we're not reliant on the state for anything, feel quite secure.

We don't expect to inherit anything, but know a couple in a rather lovely country pile which their parents bought 30 plus years ago and left to them.

If people come from a traditional middle-class background, they have probably been helped out by inherited wealth along the way.

I think it is time to stop looking at what everybody else seems to have, and appreciate the fact that you can obviously afford to buy food, clothes and heat your home.
Which many people are finding it more difficult to do.

I know what you mean OP. It sounds similar to where we live and we get status anxiety sometimes as everyone seems to be able to afford more than us on one salary, yet the jobs they do, although good professional jobs, are nothing special.

My theory on it is when they bought their house as well. Most of out neighbours are round about 5 years older than us so I think that few years can make the difference of hundreds of thousands of pounds in terms of mortgage levels. Most of them seem to have kept onto one or both of their flats when they bought a house together.

I used to wonder why my above-average salary didn't seem to get me the fancy holidays, enormous televisions and other stuff that everyone else seemed to have. And then 2008 happened and I realised that a lot of people live on tick! So I've stopped looking at what others seem to have, congratulate myself on having no debt and some healthy savings, enjoy my holidays in the UK & my small, old-fashioned TV and get on with ife best I can :)

Chil1234: I take your point! I am the same in that I cannot afford these things, despite being on a 'healthy' salary. I think a lot of people do borrow the money to pay for stuff - and this hasn't necessarily changed for some, despite the credit crunch. I don't have any large debts. Mind you, I've no large savings either!!

70K is a huge amount to me, about 3.5 times my single income. If I had that sort of money coming in I would be living in luxury.

Another point I'd offer is.... watch your spending very closely. See where the money actually goes. If you have a reasonably large income to play with there is a bigger chance of spending without thinking than people on limited incomes who, by necessity, watch every penny. If you're the type that goes grocery shopping but doesn't check the prices on the way around... this could be you :)

i think timing is key
i know several people on the same income as us who bought property just 5 years before us who paid considerably less for equivalent properties.
that or they were fortunate enough to be given a 50% deposit by parents .

Yep - my first house was 54k and I sold it four years later for 146k. I do not consider this to be a good thing in anyway, shape or form.

That is where the money goes these days - it takes one income just to pay a mortgage on the average semi.

Also do you realise that someone who earns 12K a year will spend around 8K of that on on taxes. Tax on their earnings, tax on petrol, road tax, vat, tax on electricity, tax on gas, tax on savings, tax on food and drink etc etc

The answer is simple - the money goes to the government.

Our family gross family income is around £70000 but with 3 children it soon disappears. I sometimes wonder if we are too cautious because we pay a substantial amount of money for life insurance, income protection insurance in case we are too ill to work and pension premiums. We are also trying to save some money for our children's higher education. We have one 10 year old car and haven't had a "big" family holiday for 2 years.

I can assure you that 70k is not luxury living here - you wouldn't believe how shit my house is for that money

OMG!!!! sorry i don't mean to sound rude but you really should think yourself lucky. My DP works his arse off for minimum wage and yes we do get topped up with tax credits but even then our income is £16K pa and we have 3 kids. I'm a sahm at the mo, but I am finishing off some qualifications at college so when baby is bigger I can go and get a half decent paid job, but even that if I lucky will only be around the £20-25K mark. It will only be that if i go full time if i go part time i'll be lucky to earn £12k. We would be laughing of we had £70k coming in

I think there are several things here really.

Firstly, mortgage is a huge factor, and realistically, if you're earning a higher salary then you can take out a bigger mortgage and are thus repaying a similar amount proportionally as someone on a lower salary.

Also, the area you live in will make a difference to what you can afford - we live a nearly two hour commute from dh's work because house prices at the time meant we just couldn't afford to move any closer, but dh's work colleague has just put his two bed house in hertford up for sale for £260k and I am to say the least.

Also, the more you earn, the less you look at what you're spending because often, the money is just there. It's a lot easier to go into a supermarket and buy things without looking at the bank balance when you know the money is there, only to realise at the end of the month that you seem to have spent too much, whereas if you're earning less you have to pay closer attention to what you're actually spending. Dh earns a good salary and I frequently do a double take when I think that I do just walk into the shop and buy things without consideration iyswim.

Also, a lot of people do live on debt. Reality is that we do very much live in a "I-want-it-now" society where people would rather go into debt for something than actually save the money for it. So while on the surface they may look to have an extravagant lifestyle, underneath they are often up to their eyeballs in debt with no conceiveable way of getting out.

Where do you live though Emjxxx?

We live in the south-east (Hertfordshire) and it's seriously expensive to live in a very crappy house - like the tiny two-up/two-downs that you get all over the country. That's mine , with extra slugs and damp and mould round every window.

For £1450 a month - with 22 years left to pay off on the mortgage.

this is basically my house, though mine's is unmodernised and much shitter

LSC We live in South Hampshire. So not cheap round here either, but OMG £1450pm for mortgage on a 2 up 2 down is mad!

There is still defo a North South divide though and house prices etc are wayyyy dearer in the south, especially in and around London and areas like Brighton.

I also agree, the more you have the more you spend. I often look round and feel less, than a lot of the mums in the playground but i do wonder how many of them have debt up to their eye balls, credit cards and tick. We are very fortunate, we don't owe any money to anyone, we don't have credit cards or catalouges.