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.

Loft conversion is a very good idea in London and with 2 young children.

I think your assessment is correct although I have a sibling who earns substantially less than you who sends 2 to private school by the way so it all does just depend on an individual's priorities. I woudl not replace my diesel car until it utterly dies, hopefully not for another 10 years, but I do pay private school fees. None of us can tell you what you ought to spend your own money on.

"I find it hard to imagine spending X on food X on coffee X on entertainment EVERY SINGLE MONTH."

Then don't do it... entertainment & coffees are supposed to be optionals, luxuries, you know, the stuff you only buy when you know for sure you can afford them. Can't know that if don't know what spending baseline is.

If you're not driving the car very far, I wouldn't worry about the environmental impact of it. If you sold it to someone else who drove a lot further than you do, the environmental impact gets worse, not better.

OP, having read your posts, the majority of your household outgoings could be covered by one income. So I'm fascinated as to how you are spending another income without noticing.
I know you aren't impressed with ideas for looking after the pennies so the pounds look after themselves, but things like being able to rehem your Hobbs suit or change coffee habits or takeaway food might feel like small amounts...but they might let you go skiing or on a long haul holiday.
If you change nothing then nothing will change, which is fine...you are a rich family and don't need to economise. But there will always be choices to make about spending your money, you have finite resources and you need to prioritise your wants. At the moment the status quo suits you more than aiming to save for a private education. Other people would make different choices.

Lljkk- I think you misunderstood my post. It was in response to a PP who posted to say they needed to see the OPs budget to
Tell her where her money was going. All I was doing was explaining lots of people can't say "well I spend £300 a month in Costa, £75 at soft play, £200 on clothes, £100 on wine..."

If you did, and could, it would be obvious where your money was going.

Thanks everyone. I do appreciate the input, and I wasn't so much saying I was unprepared to economise on small things, just that it has to in some way contribute to my less stressful life plan to be worth it, as I am in the (admittedly fortunate) position where I'm not stressed out by my lack of ability to pay for essentials. Food is a big issue in our house. I feel I am doing quite well just to keep us all fed with the number of dietary restrictions, so packed lunches might tip me over the edge, but I'll track what we spend on eating out and make an informed decision on that one.

I think people are misunderstanding the level of recklessness I have about our finances though. The bills all come out at the beginning of the month. I know how much is left. I don't spend more than I have. We saved up for half the cost of the loft extension and I am remortgaging to cover the rest, which I know we can afford because actually the monthly payments are the same. It wasn't essential, i grant you, but it is a financially sensible move.

I am planning on tightening my belt now because my childcare voucher stash and annual leave that i built up on maternity leave is coming to an end. By how much I'll need to do this, I'm not sure yet, this thread was part of my thinking process. It depends on things like whether I change the car. I frankly couldn't give a shit about cars and dh doesnt even drive but our current one has 150k miles on the clock, is 8 years old and has crap diesel emissions so it is potentially financially and environmentally responsible to do so. Not being able to afford to change a diesel car is one thing, but I could afford it if I prioritised it, I think, and I feel strongly about air quality. Perhaps that makes no sense outside of London but one reason I was looking at nannies (part time) was because our council nursery is closing down and the next nearest is on a road with illegal levels of pollutants. So it would make more sense to ditch the car altogether but that doesn't really fit with my easier life plan. I also think I'd need to cycle a lot and I'm scared. 😊

I'm not saving for private school because I actively want my dds to go to state school, but I reserve the right to be choosy about which, while hoping that one day it isn't an issue as they are all decent, and I want them to have the opportunity to do after school activities and so on. That is an area I could compromise on if I had to as dd1 does quite a lot - but I can just about afford it.

But hardly anyone has said "I earn the same as you with similar or higher outgoings and feel loaded" which rather suggests I'm not too far wrong in my instincts that actually we have a comfortable salary but it is not high enough to live an upper middle class lifestyle in london.

I think where money vanishes in London if you are on a comfortable but not exceptional salary is on just getting about. I mentioned commuting costs but not leisure travel, for example. Because i don't work every day in the office it's not quite worth a travel card but I spend a lot on bus and tube fares (i try not to automatically choose the car), parking (15 mins parking costs 2 quid), and the aforementioned coffees and days out because you tend to roam quite far from home, then need to refuel/ take a break from the sun or whatever and the museum cafe (for example) has a particular appeal in those circumstances. I did keep a better grip on this when I worked fewer hours but have got more slack as things got more financially comfortable and life got correspondingly harder (the natural harder of an extra child but also dh's health). I need to reset now that my outgoings are rising.

Today you'll be proud of me, I went to two different parks and soft play and bought no coffees or snacks. Bloody soft play was 15 quid though, as they charged full whack for dd2 and entry for me, the highwaymen.

I think you are doing very well.

I often go out and spend nothing as I like just to walk and take chilren to thinkgs like woods with no cost but we are outer London and the wood is 2 minutes from the house. You are obviously quite sensible about money. It's the people who don't even think about what they are spending and have huge debts who are the ones with the problems.

(Someone would have to pay me a lot of money to go to a soft play area but each to their own....... local park and a bit of grass to roll down is cheaper than soft play and a bit nicer to be out in nature).

Well done longest. I bet the money you saved on snacks and drinks today will cover another trip to the play place (if you can face it) another day.
London museums usually have pleasant indoor picnic areas, we usually take sandwiches and a carton of drink for lunch then treat ourselves to a cake or ice cream mid afternoon (purely fuel to get home ). It can easily save £25-£30 compared to buying lunch in the museum cafe.

Yes, I needed to make ourselves scarce while dh did a job application, in fact, and dd1 suggested soft play, which sounded reasonable enough as we had already been to the park, but last time we went it was a fiver (today is peak rate apparently, which means they charge for 1 year olds and adults) and the park/paddling pool we stopped at on the way home was just as fun really.

Tomorrow is a special day as I have the day off work to spend with just dd1. It has been planned for a while. . We're going swimming in the King's Cross bathing pond and she got theatre tickets for her birthday. We'll need lunch in between but she's up for the picnic plan so we will do that and save our pennies for ice cream.

Most people tend to underestimate building/renovation costs or get seduced by more high end finishes. It's to be expected that you are increasing your mortgage to cover the costs of your loft extension but I wouldn't increase it to replenish your savings! There will be light at the end of the tunnel. Your loft costs is merely short term sacrifice for long term gain imo. We had a frugal 2 years after our building/renovation works in order to get our finances back on track which included 2 years of staycations. We too, depleted our savings and extended our mortgage to cover the works. I loved Laufen & Matki but bought Roca and Hansgrohe for instance. Our fantasy feature was a French spiral wine cellar - we settled on a wine chiller cabinet. Your childcare costs will reduce in the future - you'll feel rich at that point!

Thanks Clerquin. Yes, in theory you have a fixed budget, but then the builders point out that unless you pay extra for top-hung windows, for example, then you'll be walking into them when they're open, and suddenly it doesn't make sense not to pay an extra 500 quid. Or it turns out there is a premium on the particular sized sdhower cubicle you need, and then there is the sales assistant (and all my friends) ssying that unless you pay for decent quality you will be replacing it in five years, and the extras like parking vouchers for the builders that sound incidental on paper turn out to be an average of ten-fifteen quid a day when they all arrive in separate cars (bit of a cheek IMO, no one else in London gets free parking at work. A van full of materials is obviously different). I am trying not to be too blase about this though because when we stop paying for this is when my childcare bill increases due to annual leave and vouchers running out, so I won't necessarily feel richer until dd2 gets her free hours (and I'm not banking on it being 30 just yet).

Oh and then there's the fact that my area has gone up in the world and my house us, for the at least, worth an awful lot of money. But I can't help feeling that someone with that sort of budget would have certain expectations as to finish. Its too late now though anyway - the rest of the house was done with stuff from the builder depot so I ordered the cheapo bathroom to match.

Stop that comparing! You are not selling so other people's opinion about whether you should have a more expensive finish ... Really not relevant.
Your money. Lots of tips up thread about how to measure where it's going. And, your dh. Does he worry about this stuff too? What's his contribution to the decluttering, the mice catching, the budgeting..

As the saying goes, It's not what you earn, it's what you spend

I noticed one of your posts saying you weren't interested in becoming mortgage free as interest rates are low,.....what happens if (or more likely when) interests rates rise?
How many paydays are you away from financial meltdown. It's vital you get to grips with your spending, get a saving pot big enough to cover you if one of you lose your job and start paying down your mortgage.With careful budgeting you can still have fun things

Good point one episode!

Thanks pelirocco but respectfully I disagree. My df and fil both died before they got to enjoy the fruits of their sensible financial planning and I am aiming for a balance. I am not close to financial meltdown, at least no closer than your next man, so I am not going to prioritise getting my mortgage down over living the life I want and can afford. As others have noted, it is not even that high.

I agree with everything you say OP. I have wanted to post similar so many times but I knew the responses would just be about batch cooking and reducing take out coffee and gym membership.
I wish you could see a professional about this sort of thing- charities which help with budgeting are all (rightly) geared to people in financial difficulty but I want someone to set up and implement a budget which covers all aspects! You can hire someone to do virtually anything, why not that?

The other thing I wonder is whether there isn't an answer and as other posters have
Mentioned it's about an extremely expensive time of life.

As for dh, this is my thread and I don't want to speak for him but he's more or less on the same page as me. With a couple of notable exceptions (he does like his fine food and wine so within the limits of his restrictions he will spend on these) he is more frugal than me. When we inevitably run a fine tooth comb over our expenditure it'll be me that looks profligate, though to be fair I am at home more so have more child entertaining to do and this is where our disposable income goes I think. He is also troubled by how chaotic everything feels at the moment(and the pests, which is a whole other thread) but is less inclined to buy in help and although he's tempted by the idea of nice finishes etc he's normally the first to balk at the prices. He doesn't drive and is just as/more concerned about emissions, so he'd be more up for ditching the car I think - but it's me that does more of the ferrying so would be hit the hardest by this and he's just as/more worried about cycling in traffic. I don't quite know how we resolve the chaos thing, except that I'm hoping we both feel less torn in multiple directions when the building works are finished and hopefully by then dd2 will be at an age when she can be left in front of cbeebies while we tidy.

I think so calpol. I certainly felt better off before dd2 was born when our childcare bill reduced temporarily and I increased my working hours for a while. But my pay is still more or less frozen and is being eaten away by inflation and other expenses (pension contributions, potential uni fees, general cost of living) look set to rise and rise so I don't know.

Re. budgeting - a very simple place to start is to go back through 6 months worth of bank statements month by month.

Make a spreadsheet with headings to suit your needs (transport / mortgage + maintenance / bills / childcare / clothing / entertainment, that sort of thing), then categorise every single expenditure each month under the appropriate heading.

It helps if you can have a couple of months where you both put as much as possible on a card rather than using cash (unless you are happy to keep receipts and allocate your cash spend which I cba to do).

Then you can look at spending by category, and see how it breaks down, and decide (if you want to) where the best places are to make savings.

You may find, for example, that your 'profligate' spend on child entertaining is 4 or 5% of your monthly spend, so even if you halved it & were bored shitless with the kids, it'd make minimal difference.

If you want/need to the next step then is to notionally divvy up your income between headings to give you a budgeted spend per month - obviously with some things like car maintenance, insurance & so on it'll be lumpy - and aim to keep within this.

I've done that about a thousand times sadik it doesn't really work, it's a bit like telling an obese person to just get a diet book and follow it.

You do your budget, everything is fine, you set up your "pots" and you arrange all your dates etc. You spend all month tracking, moving money about etc. Then- Christmas, a holiday, a car repair, the boiler goes, you have a spate of weddings etc.... It's all so fluid, and when you don't have savings you're constantly reacting which makes it hard to get savings

Very trivial point - are your pests mice? If you don't have one it might cheer you up having a cat to cuddle as well as catching mice . . . :)

Re. the chaos, I hate to say this but I think some people are just naturally able to project an air of calm and order, whereas others (me!) live in a state of natural chaos pretty much regardless.

I do see your point, Calpol - I think you definitely have to have a 'contingency' line in your budget, and also accept that realistically if your costs are high relative to your income (esp with young children / childcare / high mortgate) then you're going to be working on the edge.

My DM was a (slightly obsessive) budgeter all through my childhood as a large proportion of my DFs earnings were commission so not reliable, so I guess I've seen it work in action. Mind you her 'cushion' used to include a box of tinned food stashed for economy times and she'd only take out her housekeeping money from the bank then put her card in the bottom drawer til end of the week, I'm not sure OP is quite at that income level!!!

I think the answer is close budgeting but then it's how does that fit with your life? How do you make time to do it? Do you want to make time to do it? If it all falls to shit are you the sort who is going to say fuck it, I'm
Going out for cocktails to make myself feel better? Are you and your H both on the same side? This is te issue we have, H will spend until the pot runs dry and his answer is to earn more, never to curtail
Spend. That's not an easy attitude to live with in your financial life

Cats are useless at reducing mice. They just bring more of the buggers into the house in my experience.

Then- Christmas, a holiday, a car repair, the boiler goes, you have a spate of weddings etc.... It's all so fluid, and when you don't have savings you're constantly reacting which makes it hard to get savings

This is what you need to overcome and once you have, it makes life so much easier. Obviously it is easiest to get started if you have spare money in your budget, but none of these expenses are unexpected, they are just irregular.

Christmas happens every year, you hope you can go on holiday once a year, if you have a car, a house or a boiler, it will need money spending on it fairly regularly. You are likely to have friends and family that will get married or have big birthdays every once in a while.

But if you can pay for these things as you go along without getting into debt, it's a good start and you must have a bit of slack in the budget or spare money. If you have a monthly income of £5/6k, you probably have more than this amount in your your current account for most of the month? How much do you have left just before you get paid?

Maybe you do have a bit of savings, it's just hidden in with your normal day to day income so you can't see it? We're a bit like this - depending on the day of the month, there is between about £3k and £7k in the Santander 123 account, which is a combined current and savings account, so regular and irregular money is all jumbled up together.

I don't mind it being like this, rather than the 'pots' approach - things just get paid for as we go along and it's a combination of luck, judgement and instinct that everything works out OK.

Mice, moths and flies, which are attracted by the neighbours' cat poo I think. I have wondered about a cat of my own but the pest man said the same as Barbara, though the neighbours swear by it and say they don't poo on their own turf (is that true?)