Achieving a better standard of living that your income suggests(81 Posts)
I notice that people who have similar household incomes, family size and house size in the same area often seem to have very different standards of living.
My question is how do those who seem to have the higher standard of living achieve it? I'd like to know their secrets which allow them to have this.
Just as an example I'm thinking of a family which have an income of around £60,000 in Surrey and who manage have holidays and privately educate their child. How do they achieve that when lots of people with much more seem to have neither?
A SAHM can save a lot in childcare however she brings nothing in to the family income & also bearing in mind that the longer she's off work, the more time passes & it's harder for her to get back on the career ladder.
Often we sit & watch programme's like Location, Kirstys Best of Both Worlds etc & it never ceases to amaze us the price bracket people are looking in! I think some people are happy to take mortgages out over 30-40 years as realistically they know at some point down the line they're inline for an inheritance which will probably wipe the majority of their mortgage out, or they simply don't care & think they deserve a big house because they work hard & earn a 'decent' wage.
Parental help makes a massive difference, whether it be via childcare or cash in your hand, i'd be very interested to see what the country would be like if no parent had never helped their grown up children in some way!
As frustrating as it can be sometimes, believe me i get it, i think you just have to ignore how others live their life & how they get by day to day..but more importantly stop comparing your life to them.
We're going to Florida next year for 18 days & some will think how do they afford it, but it's my husbands annual bonus that pays for our holidays. Yes we could use it for something far more sensible but we've always said a bonus is a bonus & we use it to make sure we have that one big break a year away from the mundane day to day reality of life/work/school etc.
I would say timing has a lot to do with it. We bought our old 3 bed house in 2001 for £124k (SE London). 4 years later my brother had to pay 135k for a tiny 2 bed flat in a terrible area. 4 years made so much difference.
As we benefitted from the increase in value we were able to buy a 5 bed in a really nice area. That is unlikely to be an option for my brother. I think inheritance will be his only way out.
So much is down to timing. Being mid 40s, we are very very lucky...big house in reasonable part of s london, as well as small holiday house in France. We haven't had any inheritance, although my Dad gave me �30k when we bought first house and DH had a large redundancy payment. However, we are both fairly high earners (c�80k each) and bought first houses very young - DH was 21 when he bought with his brother, and then I bought with DH when about 27. We are essentially savers not spenders, livign well within our means, and so have managed to pay off the morgage on the holiday house and reduce it substantially on london house.
I know that others think that we live fairly modestly - car is about 10 years old, and I don't buy new clothes very often. Takeaways are rare, although we do eat out once / twice a week. I have just bought a new bike, so at the moment commuting costs are nil. We are going to take the kids to see the Normandy beaches...looked at June ferries, but decided to go in Sept as it was �150 cheaper. Holidays are usually in holiday house, which costs us about �500 in travel.
We are contemplating private education, but are undecided.
Shopping around for everything- ie refusing to pay a lot for things, "settling" for cheaper than top-notch. Unless you care a lot about status symbols, you can save a lot of money.
Help with school fees from family (quite likely)/ booking flights on budget airlines very early and going to stay with family and friends abroad/ doing a lot of things themselves/ having second income maybe from pre-marriage flats/ not having a mortgage/ no debt (debt is expensive). There are many possibilities.
preciousbane fancy cars are definitely at the bottom of our list, we both have just never been bothered about makes/ones with bells and whistles on/flash cars and all. as long as it gets A to B , is comfortable and is economical etc.
so we buy a smallish one every 3 years from new, then trade it in after 3 years for another similar one, no hassles, so far.
@ brolly story.
Message deleted by MNHQ. Here's a link to our Talk Guidelines.
Do you have a time frame aroom to move home? I got a little excited tonight as I think we are nearly there savings wise, then remembered I have to stay for another two years anyway!
I am a bit nervous of going home as we have a nice enough comfortable life here (we aren't materialistic though so havent ever felt out done by the Jones' type thing which is just as well in London where there seems to be loads of money!). Life there now seems so different to when I first left.
PossumPoo that's my situ too! Trying to save up here to go home - although I am actually dreading it in some ways as all the women I know simply don't work, but go to lunch/gym and live in very nice, big houses. That definitely won't be me!
Aroom I've noticed that too. All my friends at home have nice, big houses, two cars etc, as it seems to be the done thing....DH and I on the other hand have a smallish house, no car (live in London so no real need) and are actually saving here so we can afford to move home!
Choc Wombat are you in Australia (username hint)? I've found there's a lot of conspicuous consumption in Aus which can be difficult to deal with.
I think a lot is about the habit of frittering. DH is a good example of this - he can easily get through £50 on a Saturday pootling around town with some odds and ends we don't really need to show for it.
I don't do this and live on very little (childhood of being very broke) but I do fuck up in big ways instead. Like setting up a business that failed, not knowing how to do benefits etc.
I know a couple who earn well, have not moved house for many years so probably have a small mortgage, and spend their money on dining and drinking and foreign holidays.
one of them was out of work for a while and I said something about living on savings; they have no savings, and have a policy of not paying anything into a pension.
Very interesting thread.
I think, as others have pointed out, that it's easy to see the things that people are buying and focus on those, and of course we don't know what things people skimp on.
We bought at the right time even a year later we'd have paid at least 1/3 more, a house over the road went for 2/3 more two years later.
We see lots of people over stretching themselves,big house/right postcode = big mortgage, several dc close together = high childcare cost, then they struggle even with a good income.
Different priorities - we've spend modestly compared to our level of income because we are aiming to pay off the mortgage in time for assisting the DC through uni and if funds allow, the choice to work because we want to rather than because we need to pay the bills.
I agree that appearances can be deceptive.
I have two friends that I initially thought were both extremely well off, but as I've got to know them more, I've found out the following:
Friend one has three children at private school, always looks beautifully dressed, at least one foreign holiday per year plus lots of mini breaks both in the UK and abroad, and a massive, well decorated and furnished house.
It turns out that her grandparents pay the school fees for her eldest child, her parents pay the school fees for her middle child, and her in-laws pay school fees for the youngest! They bought their massive house relatively cheaply, and have a low mortgage as grandparents gave them money when they bought their first home. The house is furnished with good quality secondhand furniture, Ebay buys and items from outlet stores. My friend buys all her clothes on Ebay and sells things on there too. Foreign holidays are usually booked last minute through budget websites, and they shop around for deals for other mini breaks. Oh and they always, always shop at Aldi, never any of the pricier supermarkets. My friend also always has beautiful nail extensions, and it turns out that a mobile therapist visits her house once a fortnight and only charges her a tenner each time!
Friend two has four children and she and her DH do jobs that pay average wages (he works in a call centre, she works in a shop), a massive 6 bedroomed house, they have nice holidays, nice clothes, and seem to eat out a lot.
She's told me that the reason they have a big house is because they inherited money from her parents, therefore have no mortgage. They also 'stagger' their working hours, hence they have no childcare costs. She works mornings and her DH always does the 2pm-10pm shift at work. She is also an Ebay fan, and kits the children out from there or in the Next sale, and sells loads on there too. As soon as the kids have grown out of anything she lists the clothes on Ebay straight away.
as others have noted appearances can be deceptive .
My aunt and uncle have been all over the world since (early) retiring- usa, Australia, carribean, Canada, cruises etc. they often go for at least two months a year. they're military about when they book, wait ages for the right price and always get a bargain .
They both had ordinary factory jobs.
Their house is smallish but well looked after, they replaced their kitchen just before xmas and the last one had been in since 1970s, aunt makes her own curtains, cushions etc. they shop at aldi etc.
My aunt always looks immaculate.
And they have never had a penny given them, no help or inheritance. They have worked hard and saved hard.
My rich relative , who had fab highly paid job, never goes away except to local but nice hotel, lives in small apartment and clothes are plain. Never really wants anything apart from a nice cake or bottle of wine. On paper they are ££££££ apart, but as long as they are all happy that's the main thing.
I think it's impossible to judge someone's financial situation from appearances. I know someone who on the face of it looks well off, nice house, fancy £40k cars etc but who is saddled with debt and is receiving handouts from parents.
On the other hand, DH and I have well paid jobs and a comparatively frugal lifestyle, however we have no debts other than a small mortgage which should be cleared in next few months.
Dededum is right, because of what's gone on in the past 15 years the big difference is going to be at what point someone purchased their first home. Somebody who bought in 2001 is likely to be in a very different position financially to someone who bought in 2006. Obviously inheritances and help from family makes a difference too, but if you purchased at the right time you could be doing much better than someone who had 100k from family towards a home that they bought in 2007. Additionally, in the south east in particular some people have huge commuting costs. So that could be an extra couple of hundred a month compared to someone who works from home.
Holidays are a bit of a red herring too. They can vary wildly in cost. Some people spend thousands. Some people get last minute deals very cheap. Some people use their nectarcard points for the flights and stay in a friend's holiday home on the cheap. They can also be on credit of course. So I don't think they're the best indication.
Also, I think it's easy to look at a range of friends, and the luxuries they appear able to afford and then lump them all together. Friend A - big house, friend B posh car and holidays, friend C private schooling, and end up thinking: how come I can't afford holidays and big houses and private schools - they're on the same income as me. When no one actually has all of that.
We've had help from family with school fees and initial deposits for homes, and we also got very lucky with timing of buying and selling properties.
But we also don't do debt. I think CC debt and monthly overdrafts just sap a lot of people's disposable income. I worked like a carthorse to get out of debt in my twenties and apart from a couple of tiny hiccups (usually when freelance contractors forgot to pay me on time!) I've never gone overdrawn or had a loan (except mortgage) since. The amount of disposable income this frees up is pretty notable.
Though I also know people who admit to being up to their neck in CC debt because they want to live a certain lifestyle, whether they can afford to or not.
We don't have much disposable income but what we do have goes on pretty noticeable luxuries like theatre and holidays. I have a terribel book buying habit and DH and DC are just as bad with CDs. But that's it. That's what we choose to spend on.
If we don't love stuff, we don't ever spend on it. We never eat takeaways. The DC are in their teens and have only once had a takeout (actually a supermarket ready meal!) in their lives. We run one old car. We never take taxis. We meal plan. We get three haircuts a year and that's it. We buy good clothes and shoes but only when we need them. I think we just never spend money on ephemeral tat.
I have one friend who has inherited £500k + from two relatives from the sale of pretty ordinary houses in the South East.
We are lucky my parents have helped us out with a bit of extra cash when we have moved up the property ladder.
I buy bargain foods when possible, the freezer is full of perfectly edible but officially "out of date" stuff. Very rarely buy branded products.
DS2 has constant hand me downs from DS1 from school uniform to football boots. Not averse to buying (decent) stuff off ebay too. Always shop in the sales for myself.
Money also made in selling - old clothes, toys, home furnishings etc. I have sold used bath taps, light fittings etc etc. Never ever give to charity shops or school collections.
Always hunt for vouchers for days out/meals.
DH is a actually quite well paid and I earn a p/t nurses wage but we have had no handouts/inheritance and have spent over £60k on childcare so far...
Grennie I have seen similar things. My in laws inherited money and suddenly started going on 2 or 3 extremely expensive holidays a year.
If I inherited a load, I'm not sure I'd move to a big house, although perhaps that is the best way to invest the money. I do feel genuinely satisfied with the 3 bed semi I have. I'm also genuinely happy with the oldish cars we have. I feel fortunate to have the things we do and not to have big money worries. I think I'm probably not very materialistic, but others might view me differently. Perhaps if I did suddenly have a lot more money I would change my lifestyle....hard to know.
Anyone here who did get a lump sum, did you use it to visibly improve your standard of living ....or for something else?
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