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?

Also meant to say I agree with those who've commented about being the "poor" friend. It's not so much being envious about their cosy, lovely looking homes, or their regular holidays abroad (well, it is a bit) but it's the feeling of being on the outside looking it because you literally can't afford to join in with the sort of social activities your friends enjoy. This applies to meals out most of the time for us, let alone weekends away or concerts. When you do manage to catch up with them, it's inevitable that you'll be unable to join in the discussion about the time they all went to such and such together and bit by bit, without those shared experiences, it's easy to find yourself slipping away from people because it's the things you do together and the memories you create that help bond you all. The last time I went out for a meal with friends (about 9 months ago or more) I spent most of the evening grinning inanely and making appreciative noises when, one by one, they discussed moving home, their new extension, their holidays, their romantic weekends away and/or their new car. I literally had nothing to contribute about what I'd been up to or what I was looking forward to doing because there was nothing to report ....

.... and don't get me wrong, these are all lovely people chatting about "normal" things, not boasting, yet I know damn well that most if not all don't work nearly as long hours as we do. It's very very hard because it does feel that some people always come up smelling of roses but the opposite applies to us as we are beset by bad luck and rotten circumstances. I just don't think that many people realise how unsettling and sad it can be to feel friendships disappearing when you can't afford to maintain them. Am not saying these friends would turn down coffee or spag bol at ours but clearly that's not their first choice of evening out.

I know a couple who have just sold their house for 160k, bought a new house for 310k. He's a salaried mechanic (ie, not his own garage). She works one day a week i na shop. All their parents are still alive. I can't work out how they've managed it and am desperate to know but too polite to ask.

If they were putting down £160k as a deposit the bank will happily lend them the other £150k between the two of them after all the bank won't loose out if they can't make the payments.

We have a combined income of £165k and a house worth around £550k, which is still mortgaged to the hilt. Mortgage repayments take up ALL of my monthly salary and my husband's salary pays for everything else, including childcare.

We drive a 10-yr old beaten-up car, we think that going to France on hols is a bit special and never, but never, eat out. We do save some money each month, but the house we live in is a bit of a money pit, so we need to (the roof needs replacing at the moment).

Despite being 'super-rich' by some standards, we're not exactly living the highlife. We are, however, extremely grateful for everything that we have and don't hanker for the BMWs and long-haul foreign holidays that all of our friends seem to manage!

As to how they afford it - simple! They don't have any kids!!! (They also have generous rich parents and have inherited wads!)

But how can they afford the repayments when I reckon their combined income can't be more than 25k. Plus I know they had a mortgage on their old place (not sure how much so it wasn't all deposit).

They might have gone for interest-only? Is that still available?

The people I knew who seemed to have it all when our DC were small had,

Waited and had DC later
Lived in house once owned by GP
Had very generous DP or PIL
Had had big win on the football pools

I knew several families who through unemployment and sky high interest rates lost their homes. Some were lucky enough to get council housing and others moved in with parents.

I still think lots are robbing Peter to pay Paul, and living on credit.

Someone once said to me "don't compare your insides with someone else's outsides."

My neighbours earned similar to us, he was a cop and she a nurse, but they lived like millionaires. Prada this and Armani that, cars, holidays, designer clothing for their DS.

Me and DH used to wonder how they did it, thinking they must be great with money etc and we just frittered it away.

Fast forward a couple of years and they have a very acrimonious split. Turns out they had so much CC and loans debt that the £100K equity in the house was eaten up paying them off, and they still owe money.

You might be the most sorted of the lot of them.

I don't have a lot of sympathy for the "but I have a massive mortgage" brigade.
Yes, dear. It's because you have a massively expensive house.

Unfortunately a massively expensive house where I live includes £250k for the cheapest 3 bed terrace in a not nice area.........area does make a huge difference too, my friends have bought a similar home to ours - only it is 80's rather than 60's, end of terrace rather than mid both the house and garden are larger and it's a much nicer area - £115k............

We live in the SE but don't earn "SE" salaries unfortunately!

I don't think anyone was asking for sympathy were they ? And yes we do have a very big mortgage but not a very big house which is disappointing but what can you do, it's a dump but it's my dump.

LOL mamtomany that's what I keep reminding myself, it's our dump and we are very lucky to have it, we wouldn't be able to buy anything now.

Wow at some of these incomes. Ours is far less lol!
However I find everyone lives to their means, so you could be one of the couples with a high income with a high mortgage, tax bills etc OR low income but again struggle.

Only difference imo is the ones on the higher wages do tend to live in better areas, have nicer houses and kids go to better schools

Can't really believe i'm reading this, do you really know how lucky you are. My DH works full time, he has a very hard manual job and I work 3 jobs (about 30 hours in total) and our combined income is £27,000 pa. No this is not a joke I only wish it bloody was, we struggle to pay our basic out goings every month, never mind trying to keep up with the Jones! Think yourself lucky that you earn a good wage some of us are stuck in a bloody rut!

Rant over!

DH & I wonder (quietly) about this, friends on £25k who live on nicest street and go abroad, others on 50K combined who seem to hemorage (you know what I mean) money every week - new clothes, meals out, theatre trips etc.

Catsmother made a lot of good points.
We assume inherited wealth from DPs/GPs/bachlor Aunts & Uncles.
Remortaging properties bought a long time ago and living off the capital.
Store cards, credit cards, cars/sofas on monthly payment schemes.
Generous gifts from wealthy parents.

I kept thinking we were going mad, we no longer save like we used to but we're on one income although DH has gone up. Kids - even in a quiet month you end up buying shoes/bags/swimming costumes/furniture/bedding £40 here, there and everywhere for several people. Food & fuel has gone up and the size of our family has doubled.

It does n't keep us awake at night but yes, we are curious, what magic secret do they have

Definately the mortgage payments matter! Dh and I have a combined income of 36k (me working 30hrs, him FT) unfortunately we do have a hefty mortgage and were silly enough to accumulate some debt before DD was surprisingly bestowed on us however we are working hard to repay it so fewer non-essentials for us!

I have to say though their still seems to be a huge North/South decide! I feel lucky to love and live in the North East, where I live in a 165k 3 bed semi in a fairly ordinary estate, anti social problems fairly non existent. I definitely couldn't afford anything as nice in the south (although it is cold up here

OMG at these staggering high incomes that some of you have! My husband works fulltime and earns 17.5K and I earn 8K part time. We have a mortgage, and an old car. We have 2 teens (eat loads and outgrow clothes all the time) and a 4 year old. I'm about to be made redundant with a payout of under 4K. I think I would feel absolutely rich on those incomes, but clearly, whatever the income it never seems enough! We get £350 tax credits a month which I am very grateful for. There is a £40 surplus a month once everything is paid. Its very hard to think that we both work but just about cover our bills. Our eldest wants to go uni next year and I have no money to help her out , so she will end up with big student debts, then as soon as she's finished our son will be going also! I really think that you get used to spending on things like swimming lessons, after school clubs, exensive clothes, eating out etc, you don't look at these as extras but as the norm, whereas I know I can't afford them, so Its a definate NO NO.

I wouldn't say what I earn and I wouldn't have a mortgage expect for having to make a big divorce payout to my ex husband so my mortgage is now over £1m but this is all about jealousy. You can be happy with anything .It's a state of mind.

The person paying £80k tax and feeling not a huge lot left over will be like most people. As you earn more your expenses go up if you're not careful and at the moment mortgatge interest rates are very very low so in a sense we;'re all (those with big mortgages) in clover as poor Lord Young got in trouble for saying. They will go up again. Make the most of it now. It won't last.

There will always be someone better off. If you pay 5 sets of school or university fees as I have alone and a big mortgage you don't always have huge sums left over but I would never plead poverty ever because I've 5 gorgeous children and am virtually never ill. Nothing is as valuable as that and we've got enough to eat and I'm warm.

Also some people have worse luck than others. Why am I never ill? I don't drink or smoke. I don't eat any processed food but I could do all that and still be 30 stone with cancer so a lot of it is luck as well as making your own luck.

Also on high incomes probably most musnetters didn't go out age 14 or however old I was and get a book from the library called "what people earn" and plot your purchase of an island which I bougth in my 40s, as a teenager and picked a career according and worked often double as h ard as most people. of course some people do that and still end u pon £14k a year but it can h elp.

As others have said it's all about housing. House prices are so high now relative to incomes that - except at the extremes - salary has become a relatively insignificant factor in people's wealth compared if/when/where they bought property.

If your household income is £25,000 but you bought your house for £100,000 ten years ago and (as is not at all uncommon around here) it's now worth £300,000, you are surely a lot better off than your neighbour who earns £50,000, but who has just stretched themselves to the limit to get a mortgage on the £300,000 house next door.

It's often been like that though. We had 18% inflation in the 70s and inflation at those rates for a few y ears so that people who had bought in the 50s and 60s were much much better off than people buying later. I'm not sure it's going to be worse for anyone buying now for 40 years than anyone buying at any point and holding for 40 years.

The difference in the situation we've had over the last 15 years is that house price inflation has been very much higher than general inflation. House prices in relation to incomes were nothing like as high in the 50s, 60s and 70s as they are now. When housing costs are so high in relation to income, wealth depends on property, not salaries, which is why threads like this keep cropping up.

my DH and i are pretty comfortable because we didn't meet until i was 28 and he was 33 and by then we'd both worked our way up from pretty crappy jobs to being able to afford our own flats.
he made a killing (being in the generation that bought in the early 90s) whereas i only just got through.
but we live in a flat he could afford alone so all my wages are split between savings and luxuries.
he got an endownment mortgage which he paid off but still has the endownment which is now earmarked for our kid's tertiary education.

we're very lucky, i know, but we also don't do 'status symbols' and live quite cheaply day to day.

I still don't think things are that much worse. Go back far enough and most peoplke couldn't afford anything. My grandfather in 1901 lived in a 3 bed semi with 26 young men (1901 census) as a youth. He didn't marry until over 40 as he couldn't afford it. Obviously the feckless poor as ever rush in when they can't and have lives of poverty. My parents waited 13 years after marriage to have children to have me so they could afford it etc etc In the 80s I went back to full time work when the babies were 2 weeks old. Mortgage rates were 12% interest and tax rates 33% basic rate, n o tax credits, help with childcare cares costs etc then.

In other words there has never been an easy time but if you can somehow get no that housing ladder work hard and stay on it for 40 years in whatever period you pick for that 40 years you will do okay.

We seem to be at the lower end of the earning spectrum. Put it like this, the changes in child benefit won't affect us. £70k is riches beyond belief to me. However, we live in a 4 bedroom detached house in a nice area, run 2 cars, can afford to go abroad once a year and eat out every now and again. Why? Because we our first house was bought in 1979 when endowment mortgages were worth buying and first time buyer houses weren't the ridiculous price they are now. We finished paying our mortgage last year and are mortgage free. Our biggest monthly expense is council tax at £174 per month.

We only have one DC, born when I was 41, don't have expensive tastes in clothes or possessions and don't live an extravagant lifestyle. We aren't well off, but comfortable.