Should I feel richer than I do with a family income of nearly 100k?

[longestlurkerever]

Very conscious that this could come across very badly but I'm prepared for frank responses. I realise I'm very fortunate. Dh and I both have good jobs and are able to afford a house and all our bills comfortably. I definitely do not take that for granted.

I am just trying to make some decisions that hasve financial implicationsx and I'm trying to get a feel for what kind of lifestyle is realistic on our salaries. I used to feel quite well off really, but both our pay has been frozen for years now (public sector) and our expenses have gone up.

We earn just under 100k between us, roughly evenly split. Our mortgage is 1500 a month (London) and childcare is about 650 per month, with extra in the holidays (but will go up to about 750 a month soon when I run out of the excess annual leave I am using at the moment). Commuting is about 200 per month. I have no savings as I just spent them on building works but would generally aim to have 5-10k.

My instinct is I can afford to upgrade the car to a slightly newer and greener but not fancy one - like a ford focus 3 years old, but not a brand new one, that i can afford one European plus one UK holiday a year, but not skiing or long haul, that I can afford 2 hours cleaning a week but not a nanny, that I can afford music and swimming lessons but not private school.

Does that sound about right or must I be frittering my money away somewhere not to have more left over? I don't feel I do, except on nice food and wine. I don't buy expensive clothes for me or the DC, for example, and generally favour second hand. Most people I went to uni with seem to afford these things easily and have bigger mortgages than me, but I assume they earn a lot more in the private sector and i know they get significant bonuses every year.

I'm not moaning. I like my job and deliberately turned my back on a more lucrative career path, but I feel like I've been beating myself up a bit that my life seems more chaotic than theirs, and my house and general appearance much scruffier and am trying to work out if I could afford more help, or if actually i am comparing my life with people weith considerably more disposable income than me.

No idea if this makes any sense but all comments welcome.

I know where you're coming from. I've recently spent all my accessible savings on a loft extension. The chaos is still ongoing and everything is in the wrong place and it's doing my head in. Finding the time to sort it out is impossible

I had a major freak out when I realised the work was going to wipe me out. I'm self employed and so I've been able to juggle a bit more money and avoid borrowing but like you I ummed and erred about keeping some money back and borrowing to finish off. I decided not to as loans seem to hang around forever and I'd rather just try to replenish savings.

I think that having the financial cushion of having savings is disorientating and makes you question all your spending. Similarly the chaos of constantly paying out for the work. I'm assuming when things return to normal it will feel more manageable. Hopefully you're lift will be finished soon!

Have my first ever

Ffs wibbly have a fucking back you miserable sod.

The OP has come to ask a question, you obviously don't like it so have to be insulting?

It used to be a MN you could discuss things. Now unless you fit certain criteria everyone can be an arsehole to you.

One thing, there is lots on this thread about how you, the woman, are spending the food budget, choosing clothes, budgeting for cleaning & etc.
Does this have to fall to you? Is the male parent able to take on any of these chores?

OP I'm struggling. You should have around £2k left a month for bills and food, and you cannot save?

I think you should post a full break down.

Thanks Cath. I don't really mind the biscuit though. I fully accept I'm fortunate compared to many. It is hard to get the tone right of this thread because I'm not really moaning about my lot as much as it appears. If i wanted to make radical changes to free up more money I could. I've just started to realise that I don't have the same spending power as some if my friends and that perhaps I should acknowledge that, to myself and them, rather than try and keep up/compare.

Boohoo she can't afford private education and can't afford a brand new car, but has to plump for a three year old one. The heart bleeds Cath

She's not rich, but she's virtually in the 1%. She's richer than 99% of the population

So what wibbly? So the OP isn't allowed to ask a question in case she offends posters like you? l get fed up that a poster can come on a thread, without adding anything at all and be an arsehole just for the sake of it.

The OP isn't asking for sympathy, just asking a question. No need for a bleeding heart.

We have very similar income to you and a 4 bed house in zone 3 London, similar mortgage but about half your outlay on childcare and GP's to look after kids in school holidays. We afford a car, 3 holidays a year no skiing as it's never appealed and extra tuition and activities for kids but not private school,

At the moment we're starting a kitchen-diner extension funded by remortgaging. I'll keep this money in a separate account so expenditure doesn't come out of our normal everyday current accounts were we can lose sight on spending. We also have home-care cover from British Gas which costs about £50 a month and we do get our monies worth out of it. We've had some boiler issues of late and this came in really handy.

We're lucky we have a lot of equity in our property and the extension will also add more value to the property should we ever sell up and move out of London. I'd seriously look at remortgaging just as a way to get things finished and to stop the drain on your normal current accounts.

I wasn't actually asking for sympathy, that's the thing - though am grateful for the kind words I've been given. I didn't actually say I couldn't save - I said I'd spent my savings and didn't seem to have a lot left at the end of the month despite having a nice but not extravagant, in my view, lifestyle. People kept mentioning savings as the thing I should be focussing on and I acknowledged that and took on board the things people said about budgeting etc to accommodate this. But I've no idea what I should be thinking of saving - and what in my current lifestyle is extravagant in the circumstances of having no savings, as actually I could just borrow more to get a savings cushion while I'm remortgaging, but that seems counter-intuitive even while interest rates are low.

longestlurkerever

Actually I could just borrow more to get a savings cushion while I am remortgaging

Your post mixes up lots and lots of issues - a "keeping up with the Jones'" feeling, your DH's health concerns, your concerns about your financial situation, and more.

"Just borrowing more to get a savings cushion" does not work terribly well in as much as you can only borrow whilst you are credit-worthy, and there is no guarantee that you will always be credit-worthy. The housing market could collapse, you and/or your DH could lose their job or get ill, one or other of your family could have an expensive crisis of any sort really, and so on. A savings cushion that does not need to be repaid is not nearly the same as potential future borrowing.

Do you have long-term financial security in terms of a pension, other property, insurance, and so on? I would look at these issues before worrying about the cafetiere coffee habit. Does your DH have a deeper understanding of your financial situation than you do? If not, then it could be worth you spending some time going over everything: salary, mortgage, borrowing, insurance, savings, future childcare spends, and so on. You could even work with an IFA to do this if you need to but I think you could start with a simple form like this one which I found by Googling "personal balance sheet UK".

But I've no idea what I should be thinking of saving - and what in my current lifestyle is extravagant

We can't answer that question without a full breakdown.

Longest, in answer to your question, I'd think that it's unusual for families with young dc to be saving much. On this thread you have said you are investing in pensions, your building work and still keeping at your careers. You are actually doing well in the points based game of life I think?
If you are sad, that is bad. But common, I think? Perhaps you are sad temporarily, lack of sleep, building work, your Dh's health concerns?

My exh always wanted to ditch the mortgage so we never over extended ourselves . This gave us a nice lifestyle. Two long haul holidays a year to Florida although the children were grown up by then. We did do France with them all every year though for two weeks with centre parc and London breaks in between. Ate out loads all five ou us, theme parks, days out etc.
That's the stuff my children will remember.

Yes it would have been lovely to have had that extra bathroom but by then we had extended the house twice so wasn't enough garden left .

It's all about getting that balance. Personally I'd drive the old car into the ground and I do. Mine is 15 years old and solid as a rock ( thank you Toyota).

Draw up a budget and stick to it, then decide what to do with your savings. If you take the children to the beach for a day out that's what they will remember not the fact that they had a bathroom each.

I've just started to realise that I don't have the same spending power as some if my friends and that perhaps I should acknowledge that, to myself and them, rather than try and keep up/compare.

You don't sound smug at all, and you're right that it's hard to discuss how it feels to have a family income of £100k when you know there are people who will see it who have a family income of under £20k.

By the way -that's not top 1%, it's more like top 10%., which is of course not the same as being "poor".

But I've no idea what ..... what in my current lifestyle is extravagant

The root of your problem seems to be comparing your lifestyle with people that have an income that is even higher than yours. To people on average incomes, many things that you consider normal will be wildly extravagent.

You mention home improvements, high end bathrooms etc - most people would never even look at these because they are stupidly expensive and they either simply can't afford them, or they are not value for money to them - no point spending £10k on a bathroom in a 2 bed ex council house worth £100k for example.

People on normal, average incomes buy their furniture and household fittings in places like Ikea, B&Q, Screwfix, Wickes, Wilkinsons, Argos, Homebase. If you are shopping in places that are a lot more expensive than those examples above, most people would consider it 'wildly extravagent'.

You talk a lot about coffee and lunches out. Have you any idea how much you spend on this? Maybe keep a record for a month? If you pay by card, you could download the transactions into a spreadsheet and filter out the coffee/lunch spending easily. It could easily be hundreds a month and an easy way to save if you don't think it is a good use of money - making bought food/coffee a weekly thing instead of every day would cut the amount spent by 80%. If you buy a coffee on the way to work, lunch at somewhere like Pret, and another coffee and cake a couple of times a week, you could easily be spending £300 a month on coffee and lunches.

I don't understand about the flask packing in after a couple of uses - was it a glass one that broke? If the seals went or something, that is faulty and you could have taken it back. Many people use flasks or travel cups daily for years - they aren't supposed to break after a couple of uses - this is not typical.

Regarding savings. You need to save at least enough to pay irregular expenses as they come up - holidays, Christmas, broken appliances, insurances - this will be at least a few hundred pounds a month. Maybe aim to have more on top to cover loss of income etc.

Maybe try to fill in the moneysavingexpert budget planner to see how much you should have left over, how much you should be saving for holidays, insurance etc, how much you have left over for frivalous spending etc etc?

Muji clothes can be very good quality, yes. I have muji pyjamas that I wear for three days, then wash, and wear again three days later. Six years on, they look like new.
Their bedding is also excellent - we have two plain sets that are 19 years old! Look fresh and lovely.
(Though I have about 5 sets, so rotated more, IYSWIM)
Our income is a bit higher than yours, though outgoings about the same. Only difference is we pay for 2x school fees too. It feels as though we're just getting by.
We're not materialistic, we certainly don't keep up with the Jones', yet most things are Ikea or secondhand.
Utilities, food, fuel, tax etc all cost so much more than 15-20 years ago.
I remember in 2003, my gas bill was £8 a quarter! (2 bed house).

Um. I am lucky enough to be able to go on holiday and we were lucky enough to book a posh hotel cheaply for part of the holiday. We felt poor there. Hedge fund type people maybe, buying expensive bar snacks next to the fancy lagoon shaped pool. The previous week we stayed in a well run hotel with an ordinary oblong pool. We did fit in better there & I wasn't saying no to the dc so much.
It was at the beginning of the thread, comparison is the thief of joy. Op lives in one of the great world cities and from the outside other people's lives look better. Maybe they actually aren't? How do we know?
Thinking about it, I was on holiday for two whole weeks. Maybe the other guests only had a week and were spending more per day as a result? How do I know?
Maybe I should have asked them to fill in a spreadsheet?
You aren't responsible for their spending or your friends spending. You (and dh) are responsible for yours. You can buy coffee out, or expensive bathrooms, or pianos, if that is important to you. Or not.
I buy Tui at Sainsburys clothes and find they wear well and are readonably ethical. I don't want to spend the time charity shopping, but my dsis does and I am very grateful for her finds...

Haha thank you one episode. Your oblong pool post did make me laugh. You're right that I'm mixing up a lot of things. The savings thing is a bit if a red herring tbh. In the immediate term it is a stark choice between reducing the amount I need to extend the mortgage by and savings. I've chosen hhe former, arguably the latter is just as valid, and a question I'll weigh up. In the longer term I have factored money for household disasters into my mental budget, if not an actual one. I've already said I value financial security highly - not panicking if the washing machine breaks is what I meant. Longer term savings for uni will have to wait, with the fallback plan of releasing equity in the house.

I was really after a comment on whether other people in my rough income bracket have nannies and cleaners. More help of this kind would improve my life considerably as i do feel time poor but I feel instinctively it's out of my reach and I wondered if that instinct was right. The other stuff about clothes and cars etc was really just fluff that I used to illustrate that I already make economies in places don't feel my life is exceptionally extravagant albeit a lot more comfortable than many people's. I wasn't expecting sympathy for this.

longestlurker my annual salary is half of yours but we have a cleaner! 2 hours a week to do the jobs we both hate best investment ever! But our outgoings are far less than yours. £460 a month on rent, £700 on childcare and £800 on bills. Leaves us with around £700 a month for food, fun and savings.

"Today 08:59 FruitCider

OP I'm struggling. You should have around £2k left a month for bills and food, and you cannot save?

I think you should post a full break down."

Fruit cider I am another in the same situation as OP. I said a few pages ago it's not as straightforward as a breakdown. Every month is completely different. I find it hard to imagine spending X on food X on coffee X on entertainment EVERY SINGLE MONTH.

And i think that's part of the problem. A busy life where you're responding to things, no savings reducing ability to plan, is an expensive life.

Dontyoulovecalpol I use an app on my phone to track my spending, so I can see averages over 3/6 months. Any unexpected spending I can isolate, so I know what my baseline spend is.

"I only just went back to work after 2nd maternity leave and we are currently forking out for a loft extension"

It seems to me your answer is right there. You're at 'peak spend' in terms of childcare and sorting out your living space. Give it a few years, and your dc will be in school, the loft extension will be all paid for and done, and all of a sudden everything will seem a million times easier.

TBH I think the family that isn't at least a bit broke at your stage in life is the exception not the rule.

Oh, and fwiw the people I know who have nannies do so because they have two x unsocial hours jobs (eg S/BiL who are both medics), and it's pretty crippling financially - essentially one of them is working to stay on the career ladder.

The only exception to that is city trader types, and you really don't want to compare your life to theirs except that most likely (IME - I'm sure there's happy city workers out there) you're happier and less stressed!

Sorry, but how the ecky thump did you decide you could afford a loft conversion without knowing the state of your finances?? Genuinely

Working out a budget is the basic of basics, hardly a revelation. Hope your work doesn't involve finances