How do people afford nice things?

[Nocares]

Looking for advice or an explanation of some sort!

Me and my DP both earn a good wage and have no kids.

We both drive very old cars and just bought our forever house (doer upper) very cheaply due to the works.

I have 0 debt . We never get anything on credit/finance we just save up for everything.

Although our monthly outgoings are low and we have spare money to save and spend, I don't understand our quality of life compared to others.

So we need a new bathroom first in our renovations which will cost about 4K all inc. We would both like newish second hand cars too at some point. To get something reliable and decent your talking about 7k each.
A new kitchen would be 10K with discount including fitting.
That there alone is 28K

As we pay for everything in cash as we save, I just don't see how its possible to get those things in under a decade of us saving!

A lot of our friends drive nice cars (on finance), have new kitchens or other refurbs done on their house with average incomes.

Even if you were to put everything on credit, after your repayments on top of bills and mortgage you'd have no disposable income left for years until its paid off?

I would get that people did do that, but most people still go on holidays, take maternity leaves etc. So they must still also have disposable income after paying off new car finance, credit card, and doing home renovations?

I feel like maybe we're missing a trick?
I can't imagine every single person I know is in huge debt! Especially as a lot of people have recently bought new homes due to stamp duty. So must have good credit.

I just don't see how its possible for us to do what we want to do within a reasonable time frame without it taking us a decade whilst we also live frugally.

The everyday people we know also have average jobs and income so its not like were surrounded by wealthy people either!

Am I missing something?!

Yes, time and age allows people to get pay rises and to build up a cushion of savings, if they choose to do so.

It is a recent thing for those in their 20s and new into world of work to expect to have brand new cars, new kitchens and bathrooms and shiny lifestyles. For the vast majority, their incomes mean they cannot afford it, but because things like Help to Buy or PCP and lease car schemes are out there, they can get them now. And then it feels like it’s the norm and those lik Op wonder how they are missing out.

But the big beneficiaries in this idea that it is the norm for those without high incomes to have a high income lifestyle is the car manufacturing firms and the house builders who find they can sell far more than before because people essentially buy on credit, and with cars in particular, they don’t just buy in credit but the payments are structured so the majority keep replacing the cars and paying monthly for cars into the very long term, and not just for the life of 1 car.

@WombatChocolate

The example I gave isn't for a brand new car, I doubt you can get a brand new car for £10k and paying £120 pm, my example was a 2 year old car.

My point is the car will depreciate in value regardless of whether you pay cash up front or monthly.

And yes damage and mileage could be an issue with a finance car but then just buy the car outright, at the end of the finance period.

And yes the car could get written off and your insurance not give the full value, but how is that any different from paying £10k in cash and the insurance only paying say £6k when it gets written off, you've still lost £4K

And yes the car could get written off and your insurance not give the full value, but how is that any different from paying £10k in cash and the insurance only paying say £6k when it gets written off, you've still lost £4K

But that's not accounting for the interest - which there often is. I know people are talking about 0% interest deals but most of the people I know do pay interest of some kind.

But also if you're in the position of your car being suddenly written off - I'd rather have lost the £4k that I'd paid cash a couple of years ago than being in the position of not only having to pay off the £4k remaining debt AND shell out for a new car at the same time.

Very few people take a car on finance that they could easily just pay cash for ime...its usually for cars bigger, better, nicer, than they could afford to buy outright.

Whatever way you look at it, unless you have the total amount of the car finance (or loan or credit card or any other unsecured lending) sitting in the bank in cash, you're always going to be putting your finances in a more precarious position by taking it.

@BurgundyBells that's what GAP insurance is for. Anyone with a financed car should have it, it's a policy (usually quite cheap) you take at the start of the finance and pays out the difference between the insurance payout and finance balance.

(But don't buy it from the dealership, it'll be more than half the price online).

You can do it in a much more cost effective way if you're savvy and not too bothered about second hand goods. My ancient and horrible kitchen is being ripped out and replaced soon. But not in the 15k way I was getting quoted for! We bought some shaker cabinets and a really deep sink and worktop for £50 on eBay- absolutely perfect and very solid- they're in the utility room. Honestly, people sell their old kitchen cabinets for absolutely pennies on there and some are only a few years old! Have bought new floor tiles in the tile mountain sale, £300. For the kitchen I decided I was more into the idea of a freestanding than a fitted kitchen. Way cheaper If you're prepared to put some work in! Bought a navy blue range cooker on eBay too, also pretty much perfect, it came from someone holiday house that they're now doing up and it honestly looks as if it's never been used. £450. Bought two massive old oak wardrobes to upcycle into larder cupboards. £200. Bought loads of frenchic paint to do it with. £120. Bought a 4m length of oak worktop to make the biggest butchers block ever/worktop on wheels with some shelves underneath. £300. Bought wood to build said shelves and legs and to put the shelves in the larder cupboards. £200. (Seriously, anyone looking at buying one, they're just deep wardrobes with shelves in them and some drawers or cupboards at the bottom. Don't be fooled into paying over a grand for a cupboard!) Breakfast bar stools, eBay, £12 for four! Vintage Belfast sink, gumtree, £10. Taps, £45. Unit to build Belfast sink into, £90. Some big chandelier lights £50 from Facebook marketplace. Electricians to move switches and put new lights in will be about £300. So far have spent just under 2.5k and I don't expect to have to spend much more to be honest.

A lot of people got stung with car finance deals at the start of the pandemic when they lost some of their income but still had to pay finance on a car that they probably weren't going to hardly use.

[quote HollowTalk]@RosesAndHellebores have you done a price comparison on that? I saved a fortune recently by doing this.[/quote]
And don't forget cashback....

I can afford a newer car with payments of X per month

However, I choose to buy a much
older car for a one off cash payment

The difference, is that I can sleep at night, knowing that I don't owe money on my car

We all have choices

Most people don’t do all that stuff right away!

We’ve lived in our house for 6 years. When we moved in I said it needed a new bathroom. Just thinking about doing it this year. You have to prioritise. We have probably done one “project” a year and started with a new boiler. We did buy a house that needed some updating, but not a total doer upper. If we’d done that, we would’ve budgeted for a home improvement loan or increased the mortgage to pay for the essential work. You usually get the house cheaper if it needs more work. You have to pay for it somehow. I’d love to put in new floors throughout, but that’s not a project for this year.

Also like everyone has said. Credit isn’t necessarily bad. You can use it your advantage. Yes blowing 20k on crap and fancy holidays and not repaying it isn’t smart, but putting essential house updates on 0% and paying it back monthly over a year or 2 is a good way to manage your cash flow and still have some savings available for emergencies

I don't like debt for a couple of reasons:

1: I like buying stuff and spending money, running out of money is good marker of when I'm overdoing it and should stop. With debt the amount of money available to you is elastic and doesn't really 'run out', I feel like I could easily lose control if I went down that road.

2: I like to have a disaster reserve whether it be in the form of cash in the bank or assets that can be sold. I could get an expensive car on finance but then if I lost my job my outgoings would be much higher and there would be no equity in the car to cover them. With cars (and other stuff) owned outright the unavoidable outgoings are just the mortgage and bills and the car could be sold to pay for a few months of these in a pinch.

Thanks to lockdown making it impossible to spend much money and having been fortunate enough to have my income only lightly affected over the last year I'm now in a position where with cash in the bank and asset disposal I could last about a year without income before the pot ran dry and I couldn't pay the mortgage, I suspect there are plenty of people who are closer to the wire than that.

newuser1234
We do not have a 6 to 12 month pot in case one/both of us lose our income. It concerns me far more than I let on to dh. It has been my desire to build this up but 'life' gets in the way.