‘Spare’ money

[Snowdrop76]

With everything getting more and more expensive, I’ve taken a close look at our household budget. After paying for absolutely everything we are left with £1572 per month between us (dh and I).

This is money that we can save, or use for leisure

I’m grateful that we have a surplus, but we earn a household income of 85k so it doesn’t feel like much? Am I deluded?

If you both earn equally, that's about £5600, minus pension contributions and student loans. So, say 5k a month.
To have 30% left over for savings and frivolous spends sounds quite good to me.

That is actually a decent savings rate, especially if the 85k is pretax: you are able to save over 20% of that. Although, if that is only after the absolute bare essentials, you will probably want to spend some of it on leisure.

In terms of how much to save and how to save it, it will depend on your circumstances (eg do you own or rent your home? Do you have or plan to have children? How young are you? Are there any other dependents? Can you reasonably anticipate any large cash outlays within the next few years?)
Thinking as an economic “unit” with your DH, you will want to think about future cash needs and timing, future possible changes in income, and tax savings opportunities, and then thinking as an individual you will also want financial security and disposable leisure income to be equitable shared between yourself and your DH: even if there are absolutely no relationship issues, equitable sharing of spare money can help to keep it that way! Ideally you want to look at this from both angles.

It is important to distinguish between (a) tax wrappers and (b) underlying investments and their risk/return. You can buy a safe investment, or a risky investment/return-seeking investment, within any of: a regular taxable bank/investment account, or an “ISA” tax wrapper, or a pension tax wrapper.
In general, accepting more restrictions (as with a pension) tends to get you larger immediate tax savings, usually but not always at the expense of higher fees.
A significant exception to that seems to be that for many UK taxpayers, I cannot really think of any good reason not to at least put their incremental savings into some sort of ISA wrapper, provided they select one that has low fees and allows them to choose investments that suit their risk profile. That would normally allow all income and capital gains to accumulate tax-free, while offering the flexibility to withdraw funds as needed if they have chosen the right investment mix for themselves.
These are general thoughts, not financial advice, and they do not take account of your or anyone else’s particular circumstances.

Kindly, yes personally I think it's a bit deluded to think that isn't very much. Unless you go on 6 holidays a year or something.

Is the money genuinely spare? Many essential expenses are not paid by monthly regular direct debit, so people often fall into the trap of viewing their surplus as income (sum of monthly DDs + what they think they spend on groceries and petrol).

But that could mean that you've not counted all your car costs - insurance, servicing, MOT, home insurance, replacement of white goods, school uniforms, vets bills if you have pets, that sort of thing. Also non essentials that many people spend money on like Christmas, gifts, holidays, charity donations, etc.

Plus you could well spend more than you think on food and drink if you count your regular grocery shopping, top up shops, coffees, lunches, meals out etc.

Have you analysed your bank/credit card statements over the past few months to see where your money is actually going, rather than how you think you're spending it?

To add, I wouldn't count money that goes on car insurance etc as 'savings' but delayed essential costs that need to be accounted for before genuine saved spare money.

But now I'm thinking this might not be what you asked, but I was trying avoid the thread being derailed by all the people claiming that £1572 pm 'spare' was a fortune and how they don't even have that to start with.

As for whether it's the right amount, that would depend on what your fixed costs are - mortgage, childcare etc could take up a big chunk of that, before you get to other essentials like bills, food, commuting costs etc.

it doesn’t feel like much? Am I deluded?

Yes 🙄

Assuming that you and dh earn equally then what you have left is OVER HALF of your (sole, op) take home income.

Surely you understand that over half of your net annual salary is a 'decent' amount of money and not pocket change? What about that are you struggling to grasp?

You are deluded. That is a lot of money. More than some people's monthly salary is your 'spare' cash.

You've worked for it it's yours but it's plenty.

It's certainly enough to live on, but I agree it doesn't feel like much left out of £85k a year. I can see why you'd expect to be better off than you are