Where did I go wrong financially?

Apart from very lucky people who are gifted/inherit a lot of money, and those who work every hour of the day and squeeze every last last penny (read this as having no fun!!!) most of us are trying to balance the line between being prudent and enjoying life. When I look at mine and DH situation, both good education and career path, we could probably be sitting mortgage free in a huge house right now if that was all that was important to us. The reality is I have had almost a decade off work to SAH with the kids, my DH took some time off during covid to retrain and move his career in a different direction as he wasn’t happy, and we have enjoyed nice holidays over the years and pay for lots of activities and sports for the kids etc. Yes our house isn’t big enough, we can’t justify the cost of running more than one car which is a pain, and due to cost of living increases are not really having holidays at the moment (and still have over a decade left on the mortgage). If I could go back I wouldn’t change a thing, life is for living and as long as you can put a roof over your head/pay the bills etc having lots of money is overrated!!!

You must know some very wealthy people if they have paid off their mortgage at 38. I know plenty that age no even able to get a mortgage, never mind pay it off. At 38 as a couple with a young family we were really struggling with 15% interest rates, negative equity and then an under performing endowment to top it off. 30 years on we have savings, good pensions and several properties owned outright. You are taking a very narrow view of your life, there's plenty of time ahead of you to turn things round. Don't despair but do stop comparing yourself to others, it will just eat away at you. You've probably got 35yrs of work to come, plenty of time to get yourself to your happy place.

I have always bought 2nd hand cars outright, always getting a slightly better one each time. My last car cost me £5k and was 6 years old. It has cost me no where near the equivalent of £300 per month in the 6 years I have had it. I went for a small reliable run around type, and have only had to MOT it and a couple of wear and tear type repairs. It’s still going strong and I anticipate having it for several more years until it becomes too expensive to get through MOT. I already have the money saved for another 2nd hand replacement.

with a lease you will be paying £350 per month every month. Are you planning to buy it at the end, or continue with another lease, paying out each month for ever?

I don’t know where in the country you live but the public transport is very expensive in my area. To travel to work it costs £6.80 for a return bus ticket, takes 1h - 1.5h each way, and parking is £7.50 per day with 35 minutes door to door.

By having a car on my work days I can pay less child care because I don’t need the extended drop off and pick up time. I have got the bus for the past 4.5 years so I know it is entirely possible, time consuming, and expensive.

I completely agree about the more expensive cars being an option. I pay £325 per month to lease a car, I chose new but second hand were available between £285-£325. The finance deals I looked at were for purchasing the vehicle and I have no interest to actually own a car.

I calculated I could save £350(ish) per month towards a car and I was looking at cars in the range of £6-£7k, this would have taken just under 2 years to save for. I would have purchased the car for £6k-£7k but then 12 months later it wouldn’t be worth £6-£7k but maybe £4.5-£5k and each year losing money. So I never would have had the value of the £6-£7k back in my pocket.

With the lease I get a certain level of serving included and paid for, so it seemed to me at the time a good choice.

If you can see any floors in my logic I would be interested to hear this.

Car financing costs you money, it is effectively interest payments. These are usually more expensive than a mortgage, though cheaper than an unsecured loan. The bigger issue is that you are tempted into a more expensive vehicle than you can actually afford, occurred of just saving for a bit, getting public transport, and buying a cheaper car outright.

I lease my car and have no intention of owning a car whilst I have a mortgage, which is 22 years left on it. They depreciate so I don’t see the point in “investigating” in a vehicle.

Lots of things to consider

1. People being single
2. People having had parents help them out
3. Inheritance
4. People have less expensive houses do easier to pay off
5. People not having holidays or meals out etc. It all adds up

We were mortgage free in our 30s as my DHs parents gave him enough money to buy a very nice house. Then he inherited over a £million when they died, which was when he was in his early 50s.

My Mum gave me her car when she bought a new one and pays for some memberships and hobby costs.

We both earn decent, average professional salaries (although mine is only a proportion obviously), but the finances of our families means that we are in a better position financially than we 'should' be.

Could this be the case with your friends?

You are on another planet to everyone else.

Our mortgage began when is was 21, I’m now 43 and it still isn’t fully repaid (the end is i sight though!) I was only able to get on the property ladder so young as my husband is older than me so was further on in life when we met.

The only reason I am debt free and own my car outright is because I got a significant redundancy pay out a couple of years ago.

You are in a very fortunate position and this seems like a “humble brag” post.

From your comments, it sounds like you don't need advice on how to save or reduce costs and were perfectly happy with how you were doing until you discovered that other people were doing better. If I can give you some advice, it would be to stop comparing yourself to others and be content with the privileged position you find yourself in. If you must compare yourself to others, feel free to compare yourself to me - I am 45, have one child, am married, and we have a joint income of less than £30,000, no assets, several thousand pounds of debt, and only enough in our savings to cover one month of bills. We both worked hard our whole lives, I have two advanced degrees and worked as a university lecturer, and we don't run up large bills on credit cards. Nonetheless, through growing up financially disadvantaged, a little bit of bad luck and a large amount of bad health, we find ourselves unable to get a mortgage and so are stuck channelling much of our income into rent and can't save much. Do I look at people like you and wish I had made different choices to have what you have? No, because I have everything I need, and much more that I don't need. The only thing I envy wealthier people for is the ability to help their kids get a leg up in the world, as I worry that the world is so expensive for kids now and jobs aren't as easy to come by now so worry for my daughter. Enjoy what you have and stop worrying so much about what you don't.

Genuine post?? You have good health? Well what else matters?

Don't understand how someone else's debt affected you - the estate is responsible? Also why did it fall to you to repay?

Oh, I absolutely agree. I moved to this area because properties are cheap . But that’s the choice I made to be debt free. Yes, not achievable for most, but it’s an example of why OPs friends may be better off financially.

As a fellow accountant of the same age, I empathise with your position.... I'm constantly looking around thinking... how am so so far behind my peers financially?! I mean, we work so hard and yet still only afford a pretty simple lifestyle! I mostly blame the cost of living!
I will say though, I spent my 20s being frugal, working hard to pay extra on my mortgage, for it all to backfire when a family member dies (with no insurance) meaning we had to remortgage to pay off his debts. It was a tough time,but a hard lesson in learning to just live your life and trying not to sweat the small stuff!! Everything works out in the end... just keep going and you will find yourself exactly where you should be ♥️

You’re not being unreasonable, it doesn’t actually sound like you’re in an awful financial position but it is really disheartening when everyone around you seems to be in a better financial position and it isn’t clear why. We’ve got what I consider a great income, probably more than our friends but for some reason we’re driving the crappiest car and never have abroad holidays or a cleaner or go to the gym. We live opposite a pub were someone got murdered… I only spend £400 a month on food for 5 adults (adult portions for our 3 kids!) including special diets. I think our friends must have a lot of help from family cause I can’t figure out how they can eat out all the time!!! We have about 3K in savings which is not too bad I guess, but it’s all spoken for. The kids are expensive, I’m always forking out for school trips and my husbands travel into London is crazy expensive but I’m sure I should have more disposable income than I do 🤣

Being single is probably why, do your friends share their mortgage with another person? Just think how close you’d be to paying it off it you paid double. Also how expensive is their house compared to yours?

also buying new cars on finance is a massive trap if you keep trading it in every 3 years because you’ll be forever in debt.

student loans are also a massive burden if you mr friends didn’t have them it adds a lot, also if they didn’t go to uni they’ve probably been working 3+ years more than you….

No student debt either are we both started out in apprenticeships and worked our way up the career ladder

No help, we have just been extremely careful with money. Our house was purchased when we were in our early 20's and we've been working towards this ever since

You did - past tense - meaning you probably bought a long time ago when the housing market was completely different. Not reality now or in recent years. Current estimates are that people will be paying mortgages off at average age 64, average current age for getting a mortgage is 33 with a term of
31 years. And this will probably get much worse given the recent changes to interest rates. There is nothing worse than people giving advice about home ownership using a situation to compare that no longer exists.

Ar you sure you didn't have any other help - in a lot of the country no amount of cancelling netflix, second hand phones and cheap holidays is going to allow people to pay off their mortgage in their early thirties.

People may have been able to save up a deposit doing those things by their early thirties, but not paid off the whole mortgage.

We paid off our mortgage a couple of years ago in our mid 30’s but we’ve sacrificed loads to get there. We haven’t had many holidays, had older cars that were paid off and it’s a relatively small house, but in a nice area. The house itself needs fully renovating though, it’s tired now as it hasn’t been a priority over the years, so we’re now saving up for that. I’ve taken 5 years out of work to raise our two DC’s so my pension has suffered and my earning power has also taken a hit as I’m behind my peers that haven’t had kids (I’m an accountant too)

I’d think about wether you can buy a cheaper run around car without finance, look at wether you can invest your savings into higher earning accounts and trim any fat in your outgoings. Again, we don’t have any fancy tv packages, just Disney for the kids and Netflix for me, no phone line, phone contracts are sim only and we buy our phones outright. We don’t buy fancy tech, our iPads are years old, all tvs etc in the house are just cheapish ones. I buy the majority of my clothes on vinted and sell on what I no longer need. Kids clothes are swapped with friends who have younger / older kids then mine.

For is it’s more of a lifestyle now. One day I want to move to a bigger house, but dread the thought of taking on another mortgage. Right now we’re just trying to save whilst also being a little looser with our cash and enjoying more holidays with the DC whilst they’re young.

Honestly though I really don’t think you’re doing bad at all! Lots of people your age aren’t even on the property ladder.

Very late 30s here. No debt as pay down credit card balance every month. Two quite old cars on the drive that are owned, approx £45k each in a pension, £4k in our own savings and about £15k saved for each DC.

All sounds great, however our mortgage is over £250k and DH is 10 years old than me.

I don’t know any of my peers who are anywhere near being mortgage free, and they are mostly professionals in good jobs.

I never had the choice of being a sahm; there is something very wrong with the world when one professional income isn’t enough.

I think in terms of all your under 40 mates paying off their mortgages and having fancy cars paid for outright its either a weird fluke, the bank of mum and dad/auntie ida who died and left everything to them, or theyre twisting the truth.

I am a bit baffled as to how you can earn so much, significantly more than me and i was bankrupted at the age of 32 and have a child to support, and not be in much of a better position tbh. I'm totally comfortable, decent equity, decent car (on finance) little debt, an ISA, shares and a decent pension. Dont feel like i or DD want for anything. So i do think your spending habits might be a bit out of whack IF your aim is to wipe the mortgage etc. But if you prefer really expensive cigars or something to property equity, thats fine!

I think some of your mates are telling:

1. fibs
2. Mum/Dad gave them a financial leg up to buy with a beefy deposit (did you get that?)
3. have loads of other alternative debts like credit cards etc
4. Couples incomes go further

You’re an account so you’re not an idiot - you see the state of peoples finances and would know you’re in a good position. If you really feel you’re not savvy then seek advice from an IFA. I can’t fathom why you’d ask MN when you know you’ll be earning far more than most and financially more stable than most and then expecting serious responses.

The masses aren’t paying off mortgages late 30’s. The masses these days can’t even get mortgages in their 30’s.