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?!

@LovelyUserNames we do save 2k a month..

@SpeckledyHen I don't see why our outgoings would be any higher? Its just us 2 with no kids and 0 debt. How would it be more?

Yes we've renovated before so have our eyes wide open. Just never taken on something so big as our previous have been small 2 beds. This is a big property with a lot of original features we want to preserve so I have 0 doubts that this house will be a money pit of sorts for a few years.

I guess I have answered my own questions. Other people have taken on different priorities and choices and are probably a lot better informed on credit and finance than myself.

I need to educate myself further on this subject.

Thank you mumsnet for giving me food for thought. Much appreciated.

[quote Nocares]@lockdownalli

I've already said that it was an exaggeration! Not to be taken literally.

And I don't see why 1K is suprising? We have no kids and no debt? Surely it would be strange for our outgoings to be higher?[/quote]
Do you have no mortgage? If so, then you probably should have included that rather important fact

If you do, then it must be very low to enable your total monthly outgoings to be £1k including food, bills, council tax, utilities, insurances etc

I still don't get it though. If your disposable income is £2.7k a month why do you need credit?

OP look up Dave Ramsey.

A new kitchen would be 10K

Only if you buy everything new. Buy (quality) second hand appliances, do the fitting work yourselves, use timber. We've fitted about three kitchens for less than this in total. And they look great. Just takes masses of time and effort.

We have no debt as it worries me so we pick a project or big purchase each year and save for it. Means we don’t go away every year but I can live with that.

Am I missing something?!

Yes.

Financial understanding, it seems.

I'd look again at your maths around your £1K a month outgoings. Either you have a non-existent mortgage or you live off bread and water and don't pay your council tax!

I am mortgage-free but for years and years the mortgage alone was £800 a month and the council tax £250 a month.

Are you sure you've added it all up properly?

Your post doesn’t make sense. So you take home 3.7k which for 2 people isn’t high. But anyway you manage to spend 1k on mortgage, council tax, gas, electric, water, insurances, fuel, food. How??

And ofcourse you can afford those things if you are saving 2k a month. You have your bathroom in under 3 months.

After that you save up for the kitchen. 6 months time you have more than enough.

As for cars. You do you, don’t worry about others. If you really want get a car on finances.

I think the issue will come in future if you have kids as 3.7k joint income is not much at all. About 22k each you earn? Once you factor in nursery fees. Do you have a career where you can work up the ladder?

This is a bit of an odd thread.

You save £2K a month and your 'wants' add up to £28. So that's 14 months to buy them all.

Or are you not including all the renovation work that needs to come out of your savings?

If so, you need to look at loans or a mortgage for house improvements.

Do you have a mortgage?

We are in our 40's and only just starting to afford nice things thanks to a recent promotion. We were finding pennies down the back of the sofa struggling when did was born, we paid off credit card debt when we moved house but have had the same car for over 10 years and only 1 abroad hiday in all that time. We holiday with family, save for stuff and get most clothes/ toys/ kids equipment second hand. Thanks to a bit of extra money coming due to said promotion I got a brand new toaster last month and we are getting stuff done on the house this year. I got new make up for the first time in years and new clothes and shoes for the kids. It takes time. I still budget and worry about money but we have more wiggle room.

Different financial circumstances, priorities and just sheer good luck in some cases!

We are very lucky in that we don’t have a mortgage and I also have a rental property which I own outright that generates a modest monthly income, enough that - with our joint lack of mortgage(s) - enables me not to work and be a SAHP. Both DH and I have good savings and I also received an inheritance from my parents last year. I realise how fortunate we are and am very grateful for it. I should also add that I wasn’t so fortunate when I was younger and also worked my arse off for years after uni right up until having children. Despite being financially comfortable I would also like nothing more than to return to work to feel I am doing something meaningful and engage my brain.

You save 2k per month and everything you want costs 28k. You could save that amount in 14 months - it's hardly long-term!

Fwiw I think you are doing it the sensible way OP saving for it before you get it. I do this too. I would be worried to death about taking on a large loan on credit. I always think what if they can afford payments now but lose their job then can't.

I had no idea you could borrow against your mortgage for renonations!! I need to look into this for our loft conversion

I graduated at 22, bought my first house at 23, and apart from the beds, all the furniture was secondhand. I was 34 before I decorated and fully furnished a room with new furniture and bought a new carpet - everything was bits here and there, for that long.

I didn’t have flash holidays or cars, either, and have never replaced a bathroom or kitchen. And never had help from parents. Like you, OP, I tried to save up rather than buy on credit, unless the thing was really unavoidable. I also tried to save something into long-term savings each month, even if at times it wasn’t very much.

As we got older, the holidays and cars gradually got upgraded, but always paid for in full, unless there was an interest free credit offer on a car which meant it made more sense to take it (e.g. deposit contribution or free servicing not available to cash buyers.). But overall, we just always lived within our income. I’ve always kept my cars until they started causing trouble, never changed just for the sake of it.

The result of this is that in a few months I will be retiring in my late fifties, owning my house and new car outright, with enough resources to live comfortably for the rest of my life.

Yesss its correct. We had to go through everything with our mortgage company on an expenditure form for the affordability check.

Roughly are outgoings are:

Council tax is 125
Mortgage is £300
Utilities (so far): 45
Water: 24
Petrol for both: 70
Insurances: 120
Food: 300
Phone contracts: 29

So roughly 1K give or take a few quid.
I also buy 13 for Netflix out of my own account and DP pays for prime out of his.

We put a bigger deposit down so our mortgage repayments are small.
After we do the bulk of the house up then we'll overpay mortgage to get it paid off quicker.

@NotQuiteUsual

I had no idea you could borrow against your mortgage for renonations!! I need to look into this for our loft conversion

It may well have changed, but some years ago we borrowed for our kitchen which included a new boiler and total revamp by extending the mortgage.

Our fixed outgoings are around £1000 a month, if mortgage is small it's not so unbelievable for a couple with no children

Mortgage - 350
Ctax - 90
Food - 250
Gas & Elec - 60
Water - 20
Car (Tax, Insurance, Petrol, Servicing) - 100
Internet - 40
Insurances (Buildings, Contents, Life) - 50
TV Licence & Netflix - 17 ish

Don’t think of the house as a money pit, think of the improvements you are making as adding to your equity. Eventually you should get back more than you put in. But it is about priorities. Once the priority but boring things like heating ,electrics ,roof and any structural work is done you can start on the nice things like new kitchen and bathroom. If you can extend your mortgage to get the boring things done and dusted then while you are getting those done you can be saving like mad for the nice things.

For cars I think finance is the answer, as soon as you buy a new or newish car its value depreciates, using finance means you can have a decent car and not have to watch its value go down.

Surely you could then buy a new car within 4 months? I don't understand - you can save £2,000 per month without a problem. So it's February now... when you get paid in June you could buy a car. In October you could buy another. Why don't you see it like that?

Council tax is 125
Mortgage is £300
Utilities (so far): 45
Water: 24
Petrol for both: 70
Insurances: 120
Food: 300

_
Phone contracts: 29

£45 a month for gas and electric is a tiny amount if it's a big(ger) and older house.

Our utility bill is around £120 for a modern, fully insulated, double glazed, 3-bed house.

I don't understand your point at all.

If you have no savings, you do one thing at a time.
Bathroom
Kitchen
Whatever...etc.

And you keep a nest egg for emergencies like your car packing up and it needing £1K of work, or replacing. And the same for the washing machine packing up, etc.

You haven't listed car insurance. How much is that?

Our is £600 a year to cover 2 cars.

£4k on a bathroom? We updated our large bathroom in London for less than £2k (this included a lot of tiling). Shop around. Do a lot of DIY work yourself.
People that look like they have everything are usually very indebted. It’s impossible to go on holidays non-stop, have three kids in private schools, have a massive mortgage and one parent working. Yes, of course, some people can afford all of that in London, but many others are trying to live up to that standard.

Our friend’s husband was like that...always on holidays, new cars, new clothes...and a huge credit card debt...
We do the following: buy label clothes on eBay, don’t own a car (don’t feel you need it in London), shop second hand for the house renovations and do a lot of DIY ourselves. We plan to pay our mortgage off ASAP (our LTV

Ok makes clearly to see it written down
Your using £35 petrol per car per month. So under £9 a week per car. I mean why do you need 2 cars. And 2 new fancies cars as you mention previously. You clearly hardly use a car. Why are 2 cars necessary??

I think the issue will come in future if you have kids as 3.7k joint income is not much at all

Only on Mumsnet 😂

It's more than enough to have a lovely quality of life, including owning your own home, in multiple areas - outside of London.

I think having a house to do up saves money in the long run, but if you'd bought one already done up, then all the money would go on the mortgage, so you wouldn't be saving up to keep paying bits off as you go iyswim.

You'll be well ahead in years to come when everyone else is still paying off massive mortgages and yours is all paid for.