As a contractor do you sometimes lose perspective when it comes to money?!

[d000hg]

You've sussed it, You won't get rich on £350 a day !

I don't see why not, unless you mean 'rich' like rockstar rich. If you have two earners in your house, say your wife has a £35k salary, you can save the bulk of what YOU are bringing in... £30-50k a year. If you do that for a couple of decades you will be decidedly comfortable - rich in most peoples' eyes if not in your own!

[MyUserName]

Just read through this thread & I'm worried what the hell I'm doing wrong.

I've been contracting for over 8 years with a consistent 10 months+ work per annum at rates of around £350/day & I'm nowhere near as well off as 99% of the posters on this thread.

Do you all pay yourself way over the £44k(ish) threshold because anything underneath that then you can't have a mortgage/kids/bills etc and still have thousands left over each month to spend on what you want

I am in the same boat, although this is only my second year. I have managed to pay off the credit cards and overdraft and have given my wife money to pay off hers. However, I have never seen this situation that everyone quotes where they have 6 months + of money sitting untouched in the bank. At the moment our burn rate is about 2k a month on mortgage, food and bills. I reckon we have about 5 months worth of money without touching credit cards etc but ever that is by the skin of our teeth.

It makes me wonder what on earth I am doing wrong!!!!

[lilelvis2000]

I used to have a very good job. I got paid $100K (£50K) pa - and luckily I was single so I saved a lot of it. I had the same car for 13 years and lived a quite modest lifestyle. It was nice that if I saw something (like a pair of Monitor audio speakers) I could just buy it cash. Those times were very rare though as I preferred a modest lifestyle.

I'm now glad I saved as much as I did. I've hardly done any work over the past 2 years. Clients now take liberties when paying me, I now have to wait for up to 3 months for payment! And rates are so low, I've considered working at a take-away. The wife nags that we can't go on holidays or we can't buy a larger house (she's very materialistic, kinda a culture clash thing going on there)

My poor lad still gets the things he needs however. When I get a £1 I think about him first.

[The Spartan]

It makes me wonder what on earth I am doing wrong!!!!

I wouldn't say you're doing anything wrong it is after all only your second year, mine too in fact and only just now have I been able to accrue 6 months worth. Though I have had lot's of work done to the house in the region of 6-8k

[rootsnall]

I don't see why not, unless you mean 'rich' like rockstar rich. If you have two earners in your house, say your wife has a £35k salary, you can save the bulk of what YOU are bringing in... £30-50k a year. If you do that for a couple of decades you will be decidedly comfortable - rich in most peoples' eyes if not in your own!

Two earners certainly helps, but even then it's not 'lose perspective' rich. For a single earner with a wife/kids/mortgage then 70oddK gross isn't a fortune these days, I think that's what the original poster was saying.

[d000hg]

Two earners certainly helps, but even then it's not 'lose perspective' rich. For a single earner with a wife/kids/mortgage then 70oddK gross isn't a fortune these days, I think that's what the original poster was saying.

It probably depends on your roots. Round here, most people are on salaries of £25k or less, I'd say, certainly most under £30k. If you don't spend all the money on a posh house, a day rate of £300 massively increases your disposable income. You can eat out all the time, go on nice holidays (by your standards at least).

I'd say for most people, simply getting to the point where you're not worried about not being able to pay if the car goes wrong is a big switch in perspective!

[lilelvis2000]

I am in the same boat, although this is only my second year. I have managed to pay off the credit cards and overdraft and have given my wife money to pay off hers. However, I have never seen this situation that everyone quotes where they have 6 months + of money sitting untouched in the bank. At the moment our burn rate is about 2k a month on mortgage, food and bills. I reckon we have about 5 months worth of money without touching credit cards etc but ever that is by the skin of our teeth.

It makes me wonder what on earth I am doing wrong!!!!

Sounds okay to me. Get yourself that buffer and then you can loosen (slightly) the purse strings. Or radically, Pay off the mortgage sooner.

[Old Hack]

I guess it depends on what you call rich. I think the fact I could buy, pretty much, anything I wanted without thinking about it makes me rich of sorts, and it's this I tend to put most contractors, where normal people would budget their year, so they could holiday X, pay for the kids school trips, eat out once a month. As a contractor, in a well paid area, you can pretty much do what you like.

I was lucky in that my first 10 years contracting, so was my wife, so we put an awful lot away, whilst still maintaining a lovely way of life. Now we're not so frivolous and even with only me contracting, we're still 'saving' 50k a year, as now our costs are so low.

We're going mortgage free this year, hopefully, so that will make things even better.

It would be interesting to see what kind of rates people are on, to see if they have dropped. I recently came across a role in my area for £20k for a fixed 6 month contract. Due to the large disparity between what the market is paying and this role, I am assuming they want to get bobs in, so have to advertise for a while before saying they can't get anyone in.

[formant]

However, I have never seen this situation that everyone quotes where they have 6 months + of money sitting untouched in the bank.

Same here. While both of us are working we don't have to worry on a day-to-day basis, but either of us not working for a while would see us racking up debt quite quickly. :-/
I've only been done with university for 2.5 years though, and while well-paid when in work, was out of work for 2 periods of 4 months.

At the moment our burn rate is about 2k a month on mortgage, food and bills.

Yeah, about 2300 here according to my spreadsheet of doom. That's pretty much my other half's take home paye salary gone.

It makes me wonder what on earth I am doing wrong!!!!

Maybe we haven't done this for long enough yet? Sigh.

[Old Hack]

I should have added, for me losing perspective could simply be food shopping with no handle on what anything costs. I know people who have a budget for food, yet if we go shopping, we put in whatever we want in. For me, that's would take a shift in perspective to get used to, as would any form of budgetting per se.