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lynn22

PLEASE HELP.. set my hubby straight.

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Hi everyone, I'm really in need of your help.

 

Right I have told my husband of the countless threads & posts that many of you "in the know" guys have said that to equal our finances & lifestyle over in Oz we should work on the 2 - 2.2 x uk salary scale.

But he's just not believing me !

 

Can you guys help explain it better to him than I can & set him straight & get him to realise its not just one or two folk that says that.

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My other half's friends (both living in Melb) say double is about right

 

:)


Jo (Aussie), Jon (Pom on a 100 visa), Satch (the gorgeous viscous labrador) have now been joined by Siena Rose.

Does anyone have a spare instruction manual for a baby girl?

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aggghhhhh honest to god, we are now having a massive argument. I have read out various posts & threads from here then he goes off & does some sort of calcs & reckons he needs 1.4 AAGGHHH. He works with figures all day why cant he see what i can see. Ok i am the one sitting doing all the finding out on here but jeezo he's doing my head in.

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Guest NeilEB

what's he saying? and how much do you earn now? and where do you live? and where will you be living?

 

Why does he think 1.4?

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god knows how he came up with that figure, currently he works aberdeen.. not sure of his exact wage but he prob earns 90k maybe 100 after deductions. Looking for perth subs & most likely doing same job (office based oil & gas inds but could do fifo if nec)

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Guest NeilEB

he earns 90k sterling?

 

to be honest, although 2.4 is a quoted figure it depends on lots of things - such as where you want to live, what lifestyle you want etc. I would have thought $140k would be plenty. Any kids?

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90k sterling after deductions yep. 2 kids, 1 dog & 1 cat LOL.

 

I think he was just struggling to get his head round the type of salary he'd need to earn in aud to equal what he is on now to carry on same type of lifestyle. We dont drink, never go out except occasional cinema trip etc but do have & like a niceish house & currently have a couple of half decent motors.

 

I'm sure if he earned 2x in aud or even a bit less as he does in gbp we'd be ok.

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Guest NeilEB

where you headed to? Best thing to do (rather then argue!) is research.

Find out housing costs (rental or purchasing)

Find out how much schools cost

find out car costs

then put it all together

 

I really think $140k will be fine, depending on the type of house and location you want.

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Thanks, shouting given me a headache so watching my soaps now lol.. So frustrating trying to get him to understand it .... Grrr

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Put together an imaginary 'basket' of groceries on the Coles website, show it to him and see if he still thinks it should be 1.4!

 

You could really skew it by including bananas but he may not want to go then ;)


She'll be right!

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Guest Guest 47403
Hi everyone, I'm really in need of your help.

 

Right I have told my husband of the countless threads & posts that many of you "in the know" guys have said that to equal our finances & lifestyle over in Oz we should work on the 2 - 2.2 x uk salary scale.

But he's just not believing me !

 

Can you guys help explain it better to him than I can & set him straight & get him to realise its not just one or two folk that says that.

 

Please tell him to come on here and have a read through previous posts on the subject, if he accepted a job at $126k after earning £90k he would be taking a huge drop in wages. He needs to earning nearly $200k to have a similar standard of living.

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Guest littlesarah

You don't even need to do any currency calculations. Surely the easiest way is to just look at the type of homes you'd like, in the suburbs that would suit (a range of suburbs, because if a suburb is very cheap it would be for a reason) - that will give you an idea of the biggest outlay you'd face (you can use an online mortgage calculator to work out borrowing power and repayments). You can easily find vehicles for sale on various websites (you can search by State and even postcode), which gives you an idea of that cost.

 

Food - you can do the online thing (but be aware that prices are often higher for the same item when purchased online, compared with in store), and that doesn't account for the price differences that are possible by shopping at the market or greengrocers.

 

Furniture, white goods, etc - again, you can easily get an idea of prices from the big retailers by looking at their websites, but you will usually manage to get a lower price on 'big ticket' items when you're in the store.

 

Really, you can only compare what things cost in $$s with what you'd need to spend in $$s. In my view, it's the only way to make a meaningful comparison between the cost of living in two different countries.

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Please tell him to come on here and have a read through previous posts on the subject, if he accepted a job at $126k after earning £90k he would be taking a huge drop in wages. He needs to earning nearly $200k to have a similar standard of living.

 

I would agree with that. If someone earns 90k GBP in their hand then that is a lot of money for the UK and I would say a luxurious lifestyle could be had. Here you could not have a luxurious lifestyle on $126k. It would be OK but nothing flash in comparison to his current earnings.

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At high rates of pay like that then the lower tax rate in Oz comes into play, which would lower the 2.2 rule of thumb. Do your sums on tax home pay rather than gross.

 

Unless Aberdeen is really expensive (like London, say) then $126k in Perth is going to be a significant pay cut. You may alleviate this with LAFHA but really you need to sit down with him and do the sums rather than point out posts on this website.

 

Good luck!

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Tell him a small beer cost $6 and an 'artisan' loaf of bread $5. He'll get the message.


Best Newcomer 2013-14.

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At high rates of pay like that then the lower tax rate in Oz comes into play, which would lower the 2.2 rule of thumb. Do your sums on tax home pay rather than gross.

 

This is definitely the case. Tax rates aren't massively different (top rate is 45%) but the thresholds are very different

 

In the UK you're paying 40% on everything over about £40K gross and 50% over £150K

In Oz it's 37% over A$80K, and 45% over A$180K

 

It makes a significant difference - also you don't have stealth tax like NI to consider, and at high pay rates that's a significant extra cost

 

I am going with a multiplier on base salary of about 2.1, and whilst we win on some things (higher car allowance, less tax, pension contribs paid), we lose on others (higher housing costs, higher grocery costs, higher price of cars). Take home pay at my salary level works out at a multiplier of around 2.9

 

Also note that whilst some consumer durables are more expensive over there at current exchange rates, others aren't. I'm about to buy a pushbike to take with me, as they are about twice the price in Oz. We were going to buy a new Mac, but they're actually cheaper - ticket price is about 1.3x the UK sterling, in dollars, so with an exchange rate of A$=£1, they're actually significantly cheaper over there

 

It's all swings and roundabouts. But A$126K doesn't sound like nearly enough

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no no you've got me wrong, he doesn't think he'll earn 126aud ... Not sure what he thinks he'll earn till we get job offers but it was his falling out with me over calcs. I doubt if 126 aud I'd all he could earn then we might not bother ad it would be far too much of a drop from what we have here. He seemed to think I was saying 2.2 x current salary = what he needs to earn in POUNDS to be able to survive in oz, I hopefully set him straight that ideally we need 2 - 2.2 x £££ = that figure but in AUD

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he earns 90k sterling?

 

to be honest, although 2.4 is a quoted figure it depends on lots of things - such as where you want to live, what lifestyle you want etc. I would have thought $140k would be plenty. Any kids?

 

Hi there... your post made me laugh as we are going through the same! we have just returned from Perth on a fact finding trip as my hubby has been offered a job...oil & gas industry which he works in now. we have two girls 7 and 5 and want to see if life down under is better than the uk!

to clarify your argument..it really does depend where you live in Perth, we looked at rental houses in the suburbs near the city...they were ranging from 800 dollars a week to 2k plus...the expensive areas peppermint grove, Cottesloe, city beach, Como...all very nice but big big money and to be honest I want to live in an area I can meet other mums...as in those areas it seemed people were out at work all day... we looked at the bigger picture as renting is ok but if we were to buy in the areas they were over a million dollars plus...which is out of our price range...we then looked in secret harbour which we loved! more house for your money, near the beach...but it's a 40 minute

 

drive to the city...but that is fine for us. if you are looking for a big house it's

value for money...as for cars they are double the price at least! my hubby was shocked! he is talking about shipping our Jeep over!

Please pm me if you want to have a chat.

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The 2.2 arguement goes along the lines of this. 2.2 is what is considered to be about the 'normal' exchange rate.

 

So - if we are in a 2.2 situation, and the pound suddenly falls to 1.5 dollars, people in Australia don't become richer. They aren't suddenly earning more money, although, from an English perspective, it may seem like they are, because their currency is worth more than ours.

 

Likewise, if we are in a 2.2 situation, and the pound suddenly rises to 3 dollars, people in Australia don't become poorer. They aren't suddenly earning less money, although, from an English perspective, it may seem like they are.

 

Wages don't get adjusted with the exchange rate - hence the 2.2 rule. The only time this rule fails is if the exchange rate stays away from 2.2 for a very long time. In which case, we would need a new norm.

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I think the days of 2.2 are long gone to be honest, expecting it to return to that sort of level in the medium term is pretty unrealistic - albeit that the single biggest driver of exchange rates is relative interest rates

 

UK interest rates aren't going to climb sharply for a long time. It's hard to be so certain on Australian ones

 

From what I've seen in terms of prices I don't think 2.2 operates as a good guide to relative price levels either. Current OECD figures (http://stats.oecd.org/Index.aspx?DataSetCode=CPL) suggest a multiplier of 1.32 to the exchange rate in terms of purchasing power parity - this would work out to typical A$ prices being 1.9-2 x the sterling figures - i.e. if something costs £1 in the UK, you could expect it to cost A$1.90 to A$2 in Australia

 

It all depends on what you spend your money on though, and of course tax also makes a big difference. So if your spending mix involves a lot of fuel, fresh food or other things that are comparitively cheap in Australia, your effective multiplier will be a fair bit lower than that. But if you want to buy lots of vehicles, packaged/processed food and the like, it will be more

 

I mentioned elsewhere that there doesn't appear to be a great deal of logic to what's cheap and what's not. I'm about to buy a pushbike in the UK for £700, because in Australia the same bike would cost me A$2000. On the flipside, I was considering buying a replacement for my old iMac as it's on its last legs - but the model I'd buy is £999 in the UK, and only A$1399 over there - so I'll buy in Australia

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no no you've got me wrong, he doesn't think he'll earn 126aud ... Not sure what he thinks he'll earn till we get job offers but it was his falling out with me over calcs. I doubt if 126 aud I'd all he could earn then we might not bother ad it would be far too much of a drop from what we have here. He seemed to think I was saying 2.2 x current salary = what he needs to earn in POUNDS to be able to survive in oz, I hopefully set him straight that ideally we need 2 - 2.2 x £££ = that figure but in AUD

 

 

Definitely in Aussie Dollars NOT in Pounds :)

 

If he doesn't believe me tell him I'm a physics boffin and science backs me up :)


Jo (Aussie), Jon (Pom on a 100 visa), Satch (the gorgeous viscous labrador) have now been joined by Siena Rose.

Does anyone have a spare instruction manual for a baby girl?

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Guest NeilEB

Did you sort out the argument?

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I 'think' so but then I thought I had the previous week too. ...Luckily he's in the spare bed anyway as he's had manflu for over a week (ok better now but still has a horrendous cough) haha.

 

I dare say they'll be a few arguments along the way but we should be alright as we've had plenty practice :wink:

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