Please tell me how you spend £100-150k Incomes

[AkaWho]

I know I am in a very fortunate position to be in this band with my income.
At the moment I basically put anything over £100k in pension, but the increase in living costs is meaning I am spending most of my monthly post-tax income on just living:
Mortgage, bills, petrol and car costs, DC hobbies, gym and pt, the bloody grocery shop! Oh and holidays just seem to be more expensive too. I do have some savings and a DH who also earns/contributes but we were planning on private school for DC in a couple of years and sure we can afford it I just hate the thought of the amount of tax I lose for every £1 over £100k which means for a £20k a year school I could basically have put £50k in my pension.
Do I just have to get over this if I decide on the school fees being worth it? Is there any better way of doing things? Do others with the same salary also feel squeezed? Agreement with DH is my excess income (where exists) goes to school fees and his goes to overpaying the mortgage.
Please don't crucify me, I know I am in a fortunate position and also that there are state school options if I really can't stomach it. I just never thought I would be in a position where I need such a high salary (mainly big mortgage plus the interest rate increase, but also don't deny my family or myself anything)

This is great thank you!! I have read the first 2 pages and about to google YNAB as sounds like the key 😄

£150k between us is about £7k a month after pension. I put £900ish a month into pension, but suck up the 60% rate on some income (as I have rental income that’s a tax cost but cash outflow so it’s too much to put into pension to get below £100k). Our monthly spends as follows:

£1,250 mortgage
£750 other bills (utilities, mobile phones, insurance, subscriptions)
£1,250 ‘float’ in the joint account for petrol, food, home repairs, general month to month costs
£250 cleaner
£1,000 of “spends” (clothes, lunches, coffees, entertaining etc), split equally
£500 of debt repayments (home improvements on interest free)
£2,000 of savings (includes money put away for holidays etc)

No kids, but for us private school would impact our day to day lives too much. We could scrabble together for it but would mean cutting back that we’re not willing to do.

Glad it’s helpful. You will see that lots of people said I can’t afford private school on my salary and I probably can’t but it’s a red line for me.

The most helpful thing was realising just how much money I spaff on takeaways and daily spends such as lunch, coffees and Ubers. I’ve spent about £200 less than I usually do in less than a week by practising conscious spending!

Yes that is of course right but if she wants it to come off this year’s tax it will need to be before April 5th

Woohoo well done you!

@AkaWho to get the true picture, how much does dh earn and contribute or do you just put both salaries into communal pot??

OP, one income family here, OH £125k plus bonus, we do the same and put in huge pension contributions to bring us around the 100k mark. I’m financially savvy but we had never heard of the 100k cliff edge until a couple of years ago as didn’t think we’d ever get to this salary. The tax return requirement was a surprise too, and the tax owed.

Debated how much to put into the pension but it’s been severely neglected due to house moves and children and we need to catch up. It’s a balance between that and the big mortgage, and house improvements. No way can we afford private school. No childcare fees though as SAHM. The amount we pay out on the house improvements is pretty much equivalent to fees each month. Possibly taken on more than we can handle. Definitely don’t feel rich at the moment! Power of hindsight is a wonderful thing, but we were so set on the house.

(Sarabudgetly so happy it’s all gone well this week!!)

@Seagrassbasket it's not about hardworking though it's about productivity. If you're highly skilled at something niche you're productivity worth more, even if you're not working that hard. You can break your back being a cleaner but it's worthless vs someone doing brain surgery that does 20yrs a week.

The bastard lobbied for lower Capital gains tax, too. Really despise this govt I hope people research and vote tactically to get them out - even if labour are raising the lifetime pensions threshold again.

The thing is almost everyone of us lives to their means. The more I earn, the more I spend and I can spend a LOT!

If you earn say £35k pa you buy and budget accordingly. Same with earning £100k or more.

The point is you could die tomorrow and that big pension fund you are building up would mean nothing to you, just your estate.

I believe in living for today but being sensible. The private school should 100% trump the extra pension payments.

I have £10k net a month ( mostly pensions ) and until recently would spend every spare penny on holidays. Im writing this now from New Orleans having done the music triangle.

This is my last massive holiday for a while as Im now concentrating on paying off my mortgage in 5 years now rather than the 15 years remaining. Ive changed my priorities. Its just a mindset.

You just need to change the mindset

OP doesn't have time to budget.. I've heard it all now 😂

@AkaWho I do not believe for one minute that you are feeling the squeeze when, between you and your husband, you are earning at least £200k!!!!! there is no way you are feeling the squeeze at all!! when my hubby and i were earning those incomes we managed to buy 5 flats to rent out!! you should comfortably be sending your dc to private school!!

You are struggling as you have high outgoings.. mortgage, school fees, savings etc.

People manage easily on less as they have lower outgoings.

I would continue to add to your pension for the tax break as long as you can, and overpay your mortgage if possible. Our kids are in the local state school, but we supplement with tutors - is that an option for you or are you set on private? For saving I have long term savings in my company share scheme, medium term savings and a short term savings account that we dip into as needed. We both get a quarterly bonus and it’s used to pay for holidays.

OP, sorry I think I missed the bit where you said your husband earns 100k too! In that case, yes, you can probably afford private school but you will need to follow some of the advice that ‘Sarabudgetly’ had in the thread she posted. This needs to be done with your husband and openly and honestly. If you want to afford private school you need to work as a team on this.

You could start with a full budget spreadsheet (Money saving expert has a template) and put in / estimate every single monthly and yearly spend no matter how big or small. Even garden waste bin/ National trust / Dentist / parking EVERYTHING. Go back a few months and have a look at how much you both spend.

Get a App that tracks all your spending like Snoop or YNAB and put in all bank accounts. Stick to your agreed monthly budget for each spending criteria. Maybe you both have the same amount of ‘fun money’, try not to go over. Or if you go over one month, spend less the next. And then a pot for joint family money etc. Put a set amount of savings away at the start of the month not to be touched.

Review your spending at the end of each month using the app and see if you’ve stuck to it. Anything you’ve spent less on you could stick in savings. Do a general 2/ 5 year plan spreadsheet adding in how much you could save per month / overpay mortgage / put into pensions if you stick with it. At the moment it seems like you spend fairly freely and then see what’s left!

(also, if I were you I would put the bonuses straight into savings and that can be money for the really fun stuff / big savings like holidays or doing something to the house. New car etc)

(Depending on how much is in there already, I would also continue to pay into your pension due to the tax savings. But once you’ve got a budget spreadsheet you can play with a income calculator and see how much you can afford comfortably and adjust it if you need to)

This is exactly what we do and pay school fees on a lower income than the OP. I'm very organised with money (control freak really) and love a spreadsheet so it's not felt like a huge task to apply the rigour I do over finances. Helps that we don't have flashy tastes/cleaner etc

Same here ‘Heatherbell1978’! Not flashy at all, we’re really strict on monitoring finances. Think if you do private school you need to treat the school fees like a mortgage. Plus a contingency for extra things like trips / uniforms etc. An absolute hard line spend and everything else beyond bills is a nice extra. The holidays and hobbies are if you can afford them not compulsory!

The low income people will be getting a lot of government top ups.

Also, there was a very honest and insightful post by a previous poster on the other thread that might be useful - see photos.

People on low incomes do get top ups but most households are on incomes between 25,000 and £100,000 and do not get any benefits. People between £25,000 and £60,000 do get child benefit which is £100 a month but that hardly brings their invoices up to the £150,000 the OP is taking about. It is most typical for households to have an income of about £30,000 to £40,000 with £1200 child benefit a year bringing them up to £31,200 to £41,200. There are no top ups for wages once they reach a level a fraction of the OP's wage. And there are no top ups for even very low income people which bring them anywhere near £150,000.

"In the financial year ending (FYE) 2022, median household income in the UK before taxes and benefits was £35,000, increasing to £38,100 after taxes and benefits. The richest fifth had a mean household income before taxes and benefits of £117,500, over 14 times larger than the poorest fifth (£8,200).18 Jul 2023"
Most recent figures from the ONS

All high earners would have at one time earned lower salaries, but as others have said, the more you earn, the more most people adjust spending accordingly. Our mortgage, council tax and utilities add up to the take home salary of someone on 35k. (I‘m not the high earner, my partner is!) We were earning that at one point between us so lived where we could afford!

As the salary has gone up, the size of the deposit and house have increased but so has the mortgage and outgoings. Totally our choice, and earning more does give us that choice and we are so lucky in that respect. I don’t take it for granted at all and realise that it could be taken away at any time with redundancies / illness etc so save accordingly

Have to agree.
And when I read op only had one child I was really surprised.
I thought she must have 3 that why it would be expensive
I would loved to have sent mine to private school.
Holidays would have come second.

@allthemiddlechildrenoftheworld which years did you buy your five flats? Mortgage rates and the benefits of BTL have vastly changed in the last few years.

On all these money threads, people fail to realise if they are comparing their circumstances of 10-15 years ago to now, that it’s completely irrelevant. Housing costs are so much higher, as are mortgage rates. In the last two years alone inflation is such that in real terms goods/services coat 25% more than they did. Which means that unless you are independently wealthy (or on c£1m a year - we know a couple) whatever your income you will feel your money isn’t going anywhere near as far.

I’m interested to see many on this thread saying on low six figures they couldn’t even consider school fees. This reflects what I see IRL. Only on MN do people have three kids in private schools but earn tuppence (and those we know IRL it always turns out grandparents are paying!)

This is lovely.

A phrase I like is: "Enjoy the little things, because one day you'll look back and realise they were the big things".

I'm at the other end of the parenting spectrum to you (kids at uni) and my absolute best times when they were growing up were the simple things - building dens with duvets in the lounge, climbing trees, having friends over lots, trips to the seaside, picnics, caravan holidays, playing football in the park, watching telly together.

Time and togetherness are the greatest gifts you can give your children IMHO.

You'll also be able to give them financial security which is amazing too!