Is £40,000 a Liveable Income?

The BBC published an article yesterday asking if a family could live off an income of £40,000. 

According to the BBC, £40,000 is the average income for a British family where both adults are working (Office for National Statistics) and according to the statistics 30% of UK households also own 2 cars or more!

According to Alvin Hall, financial expert, "£40,000 sounds like a lot of money, you think 'my god I'm earning £40,000' but you're not really after tax. Apparently you need to have priorities to live off £40,000!

The 2011 Family Spending Survey shows that households are spending the largest proportion of their income on transport, rent, fuel and power, and recreation and culture.

According to the Family Spending Survey the weekly household average spending is broken down as follows:

Transport

£64.90

Housing, fuel, power

£60.40

Recreation, culture

£58.10

Food, non-alcoholic drinks

£53.20

Restaurants, hotels

£39.20

Miscellaneous goods and services

£35.90

Household goods and services

£31.40

Clothing and footwear

£23.40

Communication

£13.00

Alcoholic drinks, tobacco and narcotics

£11.80

Education

£10.00

Health

£5.00

Other expenditure (inc mortgage payments, council tax)

£67.30

TOTAL

£473.60

Source: Office for National Statistics Family Spending Survey 2011


I was quite shocked by some of the above figures and decided to work out our average weekly spend, needless to say it was considerably lower than the national average spend. On saying that though, we do have a relatively small family, consisting of two adults, a toddler and a greyhound!

I do think that £40,000 is quite a generous income but I know that everyone's family is different and therefore their spending habits are different. We just don't spend nearly as much money as we used to do before we became parents!

We just don't go out, well maybe once in a blue moon,  I tend to cook about ninety nine percent of all our food, we don't really drink that much ( and in my case not at all really).

We do have a car, but as it's only used for short journeys during the week and we car-share, our fuel costs are keep to a minimum. 

Our outgoings are extremely low, and looking at our lifestyle on paper we may sound really dull to a lot of people, but we're happy and more importantly we're living within our means!

Things will undoubtedly change over time but we'll just have to deal with things as they happen.

What are your thoughts on this subject, do you think £40,000 is a liveable income for a family?

 

 

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