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?

I know how you feel.

We have a combined income of about 100k - 140k depending on how business is for my DH.

He is a solicitor and owns a firm alongside two partners so therefore gets a part of the profit alongside his salary.

However, we've got 4 children and live in an expensive part of the country.

It can be disheartening to see other people living in the lap of luxury for less work but I think you have to appreciate that although they have more material things, I would much rather have my DC!

Our mortgage isn't too bad because we had a lot of equity but you cannot get much around here for less than about £500,000.

Our house is similar to http://www.rightmove.co.uk/property-for-sale/property-30145271.html?backListLink=/property-for-sale/map.html%3FlocationIdentifier%3DREGION%255E13337%26sortByPriceDescending%3Dtrue%26minPrice%3D500000%26radius%3D1.0%23_includeSSTC%3Don%26auction%3Dfalse%26locationIdentifier%3DREGION%255E54%26minPrice%3D500000%26previousSearchLocation%3DAscot%26radius%3D1.0%26searchLocation%3DAscot%26searchType%3DSALE%26sortByPriceDescending%3Dtrue%26useLocationIdentifier%3Dtrue%26box%3D-0.68064,-0.62313,51.42854,51.45026%26popupPropertyId%3D30145271%26mapType%3DMap&fromMap=true this but has 5 bedrooms and is in a different part of the village.

argh awful link or what! here

DH and I think that if we saw a lot of people's finances, in our area, we would be horrified because a lot must be on credit.

mentalfloss,if yours is similar i have serious house envy

i live in the south three bed detached bog standard,very busy road

had a very cheap morgage though,all payed of thank god but income is only £12k but have no debts,cant honestly say i envy others as also think must be on tick,as long as my bills are payed and a little over im content,but then never really been materialistic,my thinking is i never worry when the post arrives etc peace of mind is great

yeah, we bought 10 years ago top end of our budget but nowt now (£59k 3 bed semi)

im from the North.

worth probably 3 times that now.

We are very very careful with money and we save.Not in the least bit interested or bothered about material things.
as a result we are comfortable and have no debts.
We do not own a credit card, never ever have.

we are like you theywillgrowup, content with peace of mind.

We have similar income and can afford mortgage (not huge for London), six year old zafira, swimming/ballet/football lessons for the two children (again nothing fancy), food from Sainsburys or Waitrose, a fortnight in France in a Eurocamps caravan type of holiday, a trip to the theatre as a family once or twice a year- and nothing else. No savings, no home improvements, almost no new clothes, now new furniture, no new technology, no gym membership etc. At the moment I'd like to buy a compost bin for the garden but will have to wait until February or March until we have paid dh's tax bill and got past the hurdle that is Christmas. Ditto, we need to have a tree surgeon come and do some work for half a day (about £100) - again, we will have to wait several months.

People who think £70,000 is luxury - it really isn't!

^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.^

Um, no. Average wage in the UK is around £25k/year. House price differences matter hugely in this type of discussion I'll agree, but you're basically saying that after paying tax and mortgage payments an average family working 9 to 5 has £40k left from wages and benefit top ups? H and I earn slightly above the average wage, but I'm mostly being reminded of my SIL when I saw that written down - her and her H have a combined income of about 18k in the midlands (good commuting links to London within 2 hrs) and they sure as heck don't have £40k left after paying mortgage bills and tax. If you think that's anywhere CLOSE to being the reality for an average person, I think you need to sit down and do some calculations of what life is really like for the guys serving you in shops and the lady who washes your hair at the salon.

You may feel poor, but that doesn't make you poor. Whining about a lack of disposable income whilst paying off three times our household income ON YOUR MORTGAGE ALONE each year doesn't make you poor. It means you are churning three times our household income into financial security for your future - equity. Your life is a pipedream for many, and despite the fact that you might rue how little disposable money there is each month, you are truly blessed to have the life you have. Do not underestimate what you have.

I'm glad you posted that frgr. I was at the earlier post and the ignorance displayed.

FWIW DH and I have combined income of about £54,000 which he earns (I'm not working atm. Am studying after redundancy). At the end of every month we have a deficit as I have to pay childcare costs and DH's salary covers mortgage on our two-up, two-down, plus essential bills and no extra.

We are entitled to nothing other than child benefit and that'll be going in a couple of years. I am appalled that on £180,000 income you would choose to take CB. It's just so greedy when you clearly don't need it.

We are incredibly lucky and I am very thankful that I inherited some money or I wouldn't be able to afford to study and would be stuck at home bored witless until I could find a job that paid enough to cover the childcare costs.

We have an income of maybe £25k pa between us, and we seem to be one of the better off couples that we know. We're currently saving up for a house deposit, which is something that we never thought we'd be able to do until a recent run of prosperity (otherwise known as me getting a half decent job) - we are looking at maybe £75,000 for our house, and will save for around 3 years to get a deposit, with every penny after food, bills and maybe £20 a week luxury money going into the fund.

I live in central London, in one of the most deprived areas of the country, so my neighbours make me feel positively rich! My income is about £44k including tax credits but my outgoings are very low, including housing costs, no commuting costs, no childcare. This is for one adult and one child (I have a DP but he has his own place and we don't share living costs).

Our disposable income allows us quite a good standard of living, we do go abroad a few times a year and I like nice clothes. I'm very savvy with my spending as well and rarely buy anything at the full advertised rate - outlet stores, special internet deals etc. No need to get into debt if you're smart enough to shop around and maximise your income. I find that most people on higher incomes who complain about not affording things are very wasteful and thoughtless in their spending.

A lot of people on my income would probably move from my area as it has a big of a rough reputation, but it suits me (I'm not the suburban housewife type). My friends are lovely creative types and we don't get competitive about spending at all, so there's no peer pressure to spend more just to keep up with the neighbours.

When people bought their first house makes a huge difference. People who got on the ladder just before the big price rises are laughing.

Also, we are on a very healthy combined income, but I think it's easy to forget that there are a lot of costs associated with working - we have to run two cars, we each spend several hundred a month on petrol just for work, then there's work clothes etc etc...

If you have to pay all your own outgoings with no top ups, then things like dental bills, prescriptions etc add up

Plus, when your kids are small, childcare eats up a lot of your income, then when they're bigger, Uni costs do! We regularly have to pay dd's rent (£320 per month) because she doesn't get the full maintenance loan. Also forked out as she needed dental work this month (she works part time as well as studying, but obviously can't afford bills like that)

So in a way, when you think about it, even with a large income, if there's a lot going out just on living expenses, you're not going to have masses left over.

I agree the key is to appreciate what you've got - and also to remember that if you're working and paying into a decent pension, you won't be up shit creek when you're older

Agree that timing of house purchase makes a HUGE difference.

Our house has doubled in value since we moved here 9 years ago.

We probably could not afford to buy it at today's value.

Our next door neighbour who moved in 3 years after us paid £200k more for her identical house with a smaller garden.

We would also be rolling in it if we were not paying school fees.

It is surprising how many get help from grandparents for the fees. Our parents are not well off so cannot even dream of helping out with this.

My trick when I was very broke after my divorce was to walk down the High Street and look at what I actually needed from the shops.

CD's and DVD's - No
Jewellery - No
Make up - No
Perfume - No
Candles, cushions, curtains - No
Handbags - No
Lamps, furniture - No
Books - No
Paintings and artwork - No
Cakes, sweets, biscuits - No

That was just a small selection - I worked out that 95% of all the shops down that one road sold stuff I didn't want or need.

Before my divorce I thought I wanted and needed them.

It is a lesson that I still remind myself of on a regular basis.

I was quite surprised to discover how wealthy other people are. Lots of my friends dh's earn in excess of £150k per annum, or I think they do because they were moaning about the 50% tax bracket and I think that only applies to those earning over £150k.

They also bought their houses years ago and have played the property market to their advantage. I think they must have had a helping hand in getting on the housing ladder because they bought london flats when they were straight out of university and I can't see how they could have afforded it otherwise.

It makes me feel like an imposter. Our lives are so far removed. I don't enjoy being the "poor" friend and I am finding that as things get tougher for those on normal incomes I feel like I have less and less in common with those who are wealthy. That sounds incredibly shallow of me but it is how I feel.

to quote you, you must be 'crap with money'

4 of us live on under £18k but we have plenty of disposable income, mostly down to me being v financially savvy

if you give a breakdown of your spending I could show you where you could make huge savings

Definitely helps if you got on the housing ladder early on in life.

I bought my first (3 bed end of terrace) house for the princely sum of £21k in 1984 when I was barely out of my teens. I and my then boyfriend saved £20 each per week for a year and hey presto we were on the ladder.

Like Honey, we're now mortgage free in a large house in an expensive area, and only mid forties. If you were young in the early 80s and bought then, you're laughing now. If not, then it's a different story.

I don't know how our ds would be able to buy without help from us. It costs a minimum of £250k for a decent flat in Marlow/Henley, so until he's earning £85k per annum or so , he wouldn't be able to buy.

So I guess we'll be digging deep to help him with a deposit.

notpartofthelifeplan

i suppose out of 4 close friends one is very wealthy but she never makes out she has more etc,the oppositte really,she had a bog standard upbringing then rained as a nanny to very wealthy clients (lived in New York) great travel so she does like nice things,her money came from ner hubby working very very hard and cant think of a nicer couple who deserve it,no helping hand with anything its all their work

mind you when she took me on a trip for makeup to the Yve St laurent counter was shocked how much 3 items cost,she didnt bat an eyelid

must be difficult if the majority seem to have more as their lifestles probably mean you are excluded from certain things,not intentinoal im sure but i think thats where it would hit home

if their good friends they wont flaunt or brag about things,but obviouslysome things cant be helped

rained = trained

People live on debt, when you see Mums on the school run in their Chelsea Tractors, does it belong to them or the finance company? We pride Ourselves on saving for anything we need - No debt except a mortgage of £30 K (£180 pcm) Mind you we live up North (Barnsley area) where its cheap. We have a four bed 2 bath house. Our income is about £20 K per annum but its not what you've got coming in, its what you've got going out

I agree it totally depends on when you got on the property ladder and where you live.

Having bought our house here in leafy Cheshire (3 bed semi, gardens, drive, cul-de-sac, nice village where we both grew up) about 10 yrs ago our mortgage is quite small and we would struggle to buy it now, even though our combined salaries have more than doubled in that time.

Try not to compare your lifestyle and income with other people, that way lies madness - you don't know individual circumstances, and things may not always be as they appear.

I do also think your frame of reference changes. We have managed to have a rare old time with relatively low outgoings and high disposable, but we still did a bit of a lurch every time e.g. car insurance was due or whatever, because almost everybody spends what they have (and a little bit more), so we did have times of feeling skint, even though we had lots of lovely holidays and nice cars etc. When we first moved in, I was happy to just pay our bills, but you adjust very quickly to spending just that little bit more, and a little bit more etc.

It's all going to change for us as baby number one is due in Feb so our financial balance is going to have to shift.

D

I think quite often with people that appear to spend/have a lot of money, it really is all about appearances. A family that we vaguely know through the childrens' school have always, in the 8 years we've known them, appeared to have lots of money. He owns a business, they self-built an enormous footballers-wives style house a few years ago, they have a massive brand new car each year, all dressed head to toe in Boden and Monsoon, etc etc.

However, the lovely house was hastily sold for a loss a year ago. The mum said that their mortgage had been 3k per month, and with credit card and storecard repayments too they hadn't been able to afford it all anymore. They still have the business but now rent a much smaller house in the village.

So, what I'm trying to illustrate is on the surface they might have appeared to be well off, but actually it doesn't seem as though much of the money they were spending each month was actually theirs in the first place, and it does catch up with people like that eventually.

If people living in the same area as you and seemingly earning the same seem much better off I can only assume that it's down to a) buying their houses years ago and now being mortgage free or having very low mortgages, or b) being very good at budgetting and making their money stretch further. My friend is actually really good at the latter, I really don't know how she does it but she does. I think she budgets groceries very carefully, re-sells all the childrens' clothes on Ebay once they're finished with to fund new clothes for them, etc.

Interesting..... I really agree with the comment:'I don't enjoy being the "poor" friend .......That sounds incredibly shallow of me but it is how I feel.'

It is probably shallow, but it's so true and none of us can help the way we feel. I think the thing I find difficult is having to work so hard to pay my mortgage when contemporaries (who purchased the right house at the right time)are now stayathome mums with big houses and low mortgages. We all comapare ourselves to our friends - and when they strike luckier than us, we can't help but feel unfortunate by comparison. Many of our friends bought 1st houses at the same time as us - they bought in good areas, we clearly didn't - and now they are in houses mworth £200k-£300 more than ours. It's a relative thing: you want to be on a level with those of your generation - if they were badly off, I guess I wouldn't mind being badly off myself!!

Housing is by far and away the biggest factor for most people when it comes to having a "decent" disposable income and it's all relative as we know .... if you've inherited property for example (the very fortunate few) but have a low-ish salary, you could still have lots to play with without that major expense.

However, amongst the people I know who seem to have done "well" for themselves (and again I know it's relative but personally, I view that as those who can still afford a holiday - even every couple of years and "even" in the UK, can afford to maintain their home (never mind decorate it and make it a thing of beauty!), can afford to improve their homes (extensions, new bathrooms etc), those who can still afford a social life, those who can afford to move to better/bigger houses, those who can indulge their children with regular after school activities, those who can afford a reasonably new-ish car(s), those who can buy clothes from shops which aren't supermarkets/charity shops, those who can afford regular trips to the hairdresser, or who can indulge hobbies and interests such as gym membership, dance classes ..... appreciate others may have a different defintion, ) there are a number of other recurring factors which have contributed to their present "comfortable" circumstances, even when their probable salaries don't seem that high:

• Living locally to where they work (so no huge commuting costs)
• Having free (or very low cost) childcare provided by family
• Inheriting money
• Receiving a good redundancy payout AND getting another job very soon after being made redundant
• Being lucky enough - either partner - not to have gone through acrimonious relationship/marriage breakups - so not having to "start again" from scratch after being shafted one way or another
• Similar to above, not having children from a previous relationship to maintain. BEFORE I'm jumped on, I am NOT saying that this shouldn't happen but it is an unavoidable extra expense nonetheless.
• Having family/friends in various trades - particularly building, plumbing and so on, meaning "mates rates" on home improvements

At least one, and often many more, of the things on the above list applies to most of the people we know. Unfortunately though, the opposite applies to us and I must admit I feel very envious of the people I know - who, on the face of it, would seem to have similar salaries coming in. I look at what they can achieve - and am pretty confident it's not all done on credit and despair at the various shitty circumstances which mean that our money stretches nowhere near as far for us. For example, we pay £400 a month in commuting plus my DP has to pay £100 a month in petrol or else he doesn't see his children as his ex moved them away and then refused to share any part of the 220 mile round trip.

I feel we do manage our money fairly wisely but there are simply so many calls on it due to our particular circumstances. We can't afford to live any closer to my DP's job (and house is now worth less than we paid for it even if we wanted to) yet I have friends who cycle 5 miles down the road for their jobs. We have no family close by for childcare .... if you're lucky enough to have this, it can potentially save you £1,000 a month depending on how many kids you have and what age(s) they are. Just think of the difference that can make. Similarly, we know someone who received a very generous redundancy of around £60k but got a better paid job a fortnight later. Those kinds of things help immensely.

I do sometimes wonder just how many hours exactly you have to work before you have enough money to do "nice" things with (and I'd include maintaining my dump of a house in "nice") .... I personally work 50 hours a week, including evenings and weekends, but all our money goes on basics and we struggle with anything unexpected. It's crap .... but I also appreciate it's circumstances. Oh - to be able to turn the clock back and stop myself making some of the stupid (with hindsight) decisions I made years ago.

We have a similar income to you (60k), we live in a 3 bed semi in a nice area. Our mortgage on it though is only 40k. I bought my first house in 1998 so before the prices went daft.