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40k - good money or not

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    (Original post by criminal)
    yes, you can live comfortably, have a nice house and a car
    on your own.

    you would need a second income on top if you wanted to have a family and live in any sense of comfort.

    a single 18 year old? yeh they could have a playboy life style. If you want a family house just outside london with two kids and not having to scrimp all the time, and actually enjoy going places with them youll need the family income to be nearer double that.

    Lets not forget, you tailor your life style to your income. Even 6 figures wont get you that much, compared to what you would expect, if you are a family.
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    (Original post by c471)
    on your own.

    you would need a second income on top if you wanted to have a family and live in any sense of comfort.

    a single 18 year old? yeh they could have a playboy life style. If you want a family house just outside london with two kids and not having to scrimp all the time, and actually enjoy going places with them youll need the family income to be nearer double that.

    Lets not forget, you tailor your life style to your income. Even 6 figures wont get you that much, compared to what you would expect, if you are a family.
    on your own, if you manage your cash sensibly you can live comfortably. most people on this thread are saying 40k is enough to live comfortably so you really are on your own. 40k p/a is indeed good money without a doubt. you wont be super rich, but its enough.
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    40k is good money yeah, my parents combined salary isn't much more than that. They never have a huge amount of money but they do ok, my dads debating buying a relative new audi this year so it can't be that bad.

    You could live extremely comfortable with a mortgage, nice car and holidays on that kind of dough. Less comfortable if you had kids etc. But then you'd have a second income from the wife and eventually kids would get jobs.
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    My brother earns about 40k he has undergraduate + a professional qualification + works about 40 hours a week
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    Yeah. Unless you're an Ecclestone, which means that 40k is your dog's daily allowance.
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    (Original post by Megaross)
    40k is good money yeah, my parents combined salary isn't much more than that. They never have a huge amount of money but they do ok, my dads debating buying a relative new audi this year so it can't be that bad.

    You could live extremely comfortable with a mortgage, nice car and holidays on that kind of dough. Less comfortable if you had kids etc. But then you'd have a second income from the wife and eventually kids would get jobs.
    If thats combined pre-tax, it'll be a hell of a lot more after tax - for a start the person allowance will be effectively double.
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    (Original post by criminal)
    on your own, if you manage your cash sensibly you can live comfortably. most people on this thread are saying 40k is enough to live comfortably so you really are on your own. 40k p/a is indeed good money without a doubt. you wont be super rich, but its enough.
    As i said, it is completely tailored to your lifestyle. If you work in london, your mortgage could realistically be about 200 grand or so. thats a monthly repayment of somewhere in the region of 1300, yearly thats 15,600.
    considering your left with approx 30k after tax, you have 14, 400 left. Easily spend 250 a month communting into london, thats 3000. Add another 1000 or so for council tax, you've got 10,400. say 200 a month for your utilities, internet etc. you down to 8000. Probably expect to pay a grand a year for car costs, tax insurance, mot etc. Then 200 a month of food.

    That leaves 380 a month to spend, and you havent bought anything, been anywhere except work, no saving, and assumes you have bought your car outright. and council tax is probably over a grand a year, especially in london boroughs. And nothing goes wrong. No pipes burst, no car problems. And you dont insure anything you own.

    And 200 grand will only get you an apartment in many regions of the communter belt. owning a property is expensive. Just because it seems a lot compared to your temp jobs doesnt mean it is lots in the real world.

    It is completely dependant, and as most higher salary jobs are based in london, its no good saying 'my mum who lives in the outer hebradies pays 20 quid a year for her mortgage'.
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    (Original post by Clip)
    This thread demonstrates how little most students know, and makes it clear why many are so caught up with childish politics.

    £40k sounds like a lot when you are comparing it to the kind of job that young people generally do - usually minimum wage - anything up to £5ph for 18 year olds.

    These NMW and part-time jobs actually pay proportionately vastly more than you could expect.

    Let's say you are on a year out, and you find a full time job in a shop at £5 ph. That equates to about £10,500pa, holidays and student loans notwithstanding.

    Crucially, tax and NI won't kick in until the 7000s, so on your NMW job, you actually take home £786 every month, or £9400 pa.

    If you double that wage to £20,000 - your take home pay doesn't double. Far from it. On £20,000, you actually only take home £1330 per month, or £16,000 per year.

    Double that again (to this magic £40k), and you are netting under £2500 per month, or £30k per year.

    After that, it's 40% tax band. For every £1 you are paid, you see less than 50p of it.

    £40,000 for someone by themselves, with no commitments other than a student loan sounds like a huge amount. For a person with a small family and rent to pay - it's not very much at all. In London (where the bulk of these £40k jobs will be) you'd be hard pressed to find accomodation suitable for a couple (nevermind a small family) for under £950 per month, and that doesn't take into account council tax or utilities (maybe £300 per month). A small family would spend in the region of £50-60 per week on groceries (if they are good at budgeting). Allowing for a single car (assuming it comes free) at £4000 per year for petrol, tax, insurance (at the generous rate of £500) and some servicing.

    That makes a total of £22k, which has to come out of disposable income. That's almost exactly the income that someone on a gross wage of £30k earns.

    So - to earn a "subsistence" living for a couple/small family - you need to be earning a £30k salary assuming you have no student loans, and you never leave the house or buy anything other than groceries (ie no clothes or entertainment). There's no concept of family holiday in here.

    Say what you like, but a family with a single income of £40k will struggle. Don't forget that tax credits would have stopped a while back.

    That's the reality of the situation.
    so what exactly should one earn then?:rolleyes:
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    (Original post by c471)
    As i said, it is completely tailored to your lifestyle. If you work in london, your mortgage could realistically be about 200 grand or so. thats a monthly repayment of somewhere in the region of 1300, yearly thats 15,600.
    considering your left with approx 30k after tax, you have 14, 400 left. Easily spend 250 a month communting into london, thats 3000. Add another 1000 or so for council tax, you've got 10,400. say 200 a month for your utilities, internet etc. you down to 8000. Probably expect to pay a grand a year for car costs, tax insurance, mot etc. Then 200 a month of food.

    That leaves 380 a month to spend, and you havent bought anything, been anywhere except work, no saving, and assumes you have bought your car outright. and council tax is probably over a grand a year, especially in london boroughs. And nothing goes wrong. No pipes burst, no car problems. And you dont insure anything you own.

    And 200 grand will only get you an apartment in many regions of the communter belt. owning a property is expensive. Just because it seems a lot compared to your temp jobs doesnt mean it is lots in the real world.

    It is completely dependant, and as most higher salary jobs are based in london, its no good saying 'my mum who lives in the outer hebradies pays 20 quid a year for her mortgage'.
    i live 40 mins from central london. i am a 17 year old student who is going to uni is sep. but my dad earns less than 40k and we live comfortably thats all im saying
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    (Original post by Manitude)
    It's a damn good wage, yes.
    why do you say that
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    (Original post by ledleyking123)
    People say earning 40k makes you rich, its very good money etc, is it?
    It depends. There are people who are very happy on lower wages, and people who are very unhappy on much higher ones - and I mean financially happy, i.e. content with what they earn. Certainly it's above average, and if you are careful with your money you can make it go a very long way. It's enough to save a decent amount, and being able to amass a savings buffer will greatly improve your living standard as you aren't plunged into crisis when a rainy day comes along and you need to shell-out to replace something, and you can accrue the funds to buy big purchases like a car.

    If you're married and you partner is working too, £40k is very decent when topped up by a secondary wage. If you're single, I wouldn't say it makes you rich, but you can certainly be comfortable.
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    Tasty wage that like.
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    (Original post by member9876)
    why do you say that
    Average wage is something like £25k. My brother is on a lot less than that and has a hell of a lot of disposable income (though he never spends it).

    Also, I don't need a huge amount of money to buy the things I like. I'm not interested in expensive cars.
    Just CDs, gigs and guitars :cool:
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    (Original post by Quady)
    If thats combined pre-tax, it'll be a hell of a lot more after tax - for a start the person allowance will be effectively double.
    Roughly 35k takehome for my parents I work it out to be. If one person earned my parents combined income it'd be £33.5k take home. Thats only a 1.5k difference.
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    (Original post by member9876)
    so what exactly should one earn then?:rolleyes:
    What a stupid question.

    As much as you are capable of, or enough to meet the needs of your dependants.
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    (Original post by Megaross)
    Roughly 35k takehome for my parents I work it out to be. If one person earned my parents combined income it'd be £33.5k take home. Thats only a 1.5k difference.
    But 15-20% more than someone on £40k pre tax.
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    (Original post by Clip)
    £40,000 for someone by themselves, with no commitments other than a student loan sounds like a huge amount. For a person with a small family and rent to pay - it's not very much at all. In London (where the bulk of these £40k jobs will be) you'd be hard pressed to find accomodation suitable for a couple (nevermind a small family) for under £950 per month, and that doesn't take into account council tax or utilities (maybe £300 per month). A small family would spend in the region of £50-60 per week on groceries (if they are good at budgeting). Allowing for a single car (assuming it comes free) at £4000 per year for petrol, tax, insurance (at the generous rate of £500) and some servicing.
    This is a good response and yes this is TSR, where most people are thinking about their current lives, and how that sum of money would impact on their current lives.

    As you get older and accumulate things like a partner, kid(s), car(s) then life becomes far more expensive but of course there are the lucky few who whinge about how they have never met anybody and haven't got a family, that progress up the career ladder still single and do very well for themselves.

    A couple of years ago I remember talking to my mates (mostly 2/3 yrs out of uni) and we agreed that for us life 'cost' around £1000 a month, ie that was our rent, council tax, bills etc. So anything we got paid more than £1000 a month was our 'real salary'. If you're on a salary of £21k thats about £1300 a month so if you get a rise to £26k then thats about £1600 a month so you actually feel as though you are twice as rich as before in terms of disposable income. So that kind of salary rise (which is typical for people on stuff like accountancy training contracts, when they pass some exams) feels HUGE.

    £40k a year would be about £2300 a month so that would seem to a young person still living in a house share or small studio, as having a grand a month free to kick around to do what they want, so it seems like riches beyond their wildest dreams. But by the time they get there most people have accumulated higher costs of living because of their other circumstances and expectations.

    Also I agree with your point about London, the figures I'm quoting are for outside London but most of the better paying jobs are in London. I think if you get £40k as a single person outside of London then you will feel pretty well off.
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    (Original post by member9876)
    so what exactly should one earn then?:rolleyes:
    Im not saying you should earn anything. Im highlighting the fact that 40k is not lots of money, despite people thinking it is.

    before i went back to uni, i was single, earning 19200 a year take home pay. I had a 100 grand mortgage and car. So I took home approx 10 grand less a year, but my mortgage was about half a year as i stated above, so its fairly close. I was very careful with money, and I was nowhere near comfortable. I had no expensive tastes or odd loans or repayments to make. But i damn sure had to account where almost every pound was going.

    Also, remember when comparing with the older generations, consider when they bought their house. House prices have rose far higher above inflation. Somebody of my parents generation who has lived in the same house for 20 years probably ditched their mortgage long ago. Ask many parents what it was like to buy their first house and they will probably tell you they had to scrimp and save and watch the pennies.

    Like i keep saying, its tailored. 40 k when your 50, with grown up kids and no mortgage is completely different to being 20 odd with a 200k mortgage.
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    (Original post by Quady)
    But 15-20% more than someone on £40k pre tax.
    Well I worked it out on parents income 46k. It's only 4 and a bit percent difference and when you think they only have one pension scheme to pay into in real terms they're better off.


    40k post tax is roughly 29.5k for a single person allowance.
    In a couple, assuming the guys earning 28k, and the girl 12k because she's doing the whole mother thing it's about £31.5k which again, not a huge difference between the two.
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    (Original post by Electronica)
    Yes. 40k is good money. To be honest 30k is pretty well off, I could do whatever I wanted in life with that kind of money.
    30k is not well off lol, it would definitely be enough to sustain yourself comfortable and the very odd luxury but that is if the money is just supporting yourself, if 30k is supporting a family of 3/4 then it is just about enough.

    Most gradate jobs in even semi-competitive careers earn around £27-30k starting salary.

    I would 50k is a good mark

    (Original post by BBC)
    Analysis
    David Kuo, of investment advice website Motley Fool

    The average person in the UK spends around £32,000 a year. This is made up of £25,000 on basic expenses (transport, food, clothing etc) and £7,000 on mortgage repayments.

    The upshot is that the average household needs a gross salary of about £45,000 just to break even.

    That is why, I reckon that the average person won't be happy unless they earn around £50,000 a year. However, it is may still be a hand-to-mouth existence.
    http://www.bbc.co.uk/news/magazine-11382591

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