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?!

[Ikeameatballs]

I’m not a good saver BUT I would do everything I could to not default on a finance agreement, therefore for me it’s much better to go for a 0% deal. Also, often the costs to the company of the 0% finance offers are factored in to the cost of the product, so you are actually paying for the finance deal, you are just not using it.

[Hollywoodzc]

I think you’re sensible to be debt adverse wherever possible. However I would put the kitchen and bathroom on the mortgage or a home improvement loan. In the worst case scenario you may have to sell your house, the new kitchen and bathroom are likely to make a sale easier and add more value to the property than they cost.

[Mintjulia]

Op, I have a medium income, single parent and I manage money by saving every month. I budget everything because I don't have a safety net.

So, for example, I put £180 a month into my car fund every month so when I need a newer car, the money is there. I normally buy 2 yo cars. Holidays are chosen depending on what my annual bonus is like. If it's a rubbish bonus, I have a cheap holiday. I don't spend money on nails, waxes, car washes, Starbucks, etc. I don't use finance.

I stick to good basics, and have managed a new kitchen and new windows and front door in the last four years. I also bought a doer upper!

But absolutely everything is planned. I never splash out. It's hard work.

[Nocares]

@LovelyUserNames I am fully expecting our fuel bill to go up massively! That was based on my last house, a small 2 bed. Not recieved the bill for this house yet. Shudders.

And car insurance came under insurances of 120. 80 of that is our monthly insurance combined which is about 900ish a year I think?
The other 40 is house/life insurance.

[LovelyUserNames]

I honestly think your monthly outgoings are an underestimate.

You are not including things that are paid annually, whereby you break that down into £ per month.

You are omitting things like health care- dentists, prescriptions, maybe opticians for eye checks or glasses, hairdressers.

I suspect you take these extras out of your 'personal allowances' whereas for us, it's part of essential outgoings.

We have never had our own allowances. We have a joint account and each have our own savings accounts to make the most of tax allowances.

[delightfuldaisy19]

We are in our 40s and have spent years juggling loans, interest free credit cards, overdrafts etc.

All of a sudden we have disposable income. This is not through any organisation or planning. Our wages have gone up and overheads decreased.

Seriously, life is for living - buy some stuff on credit, have a nice house, go on holiday.........it will all work out.

To quote my now dead dead - there's no pockets in shrouds - enjoy your life.

[Perfect28]

You are able to save 2k a month but you think it would take you ages to save? Honestly, I'm shocked. 2k a month is an absolutely huge amount to save.

[EwwSprouts]

OP a lot of those people who are on finance are now really struggling. If you have a safe job in the NHS or similar stretch yourselves a bit but I volunteer at a food bank and we're helping people with nice houses and fancy cars because they have no access to ready money.
www.theguardian.com/society/2020/nov/01/growing-numbers-newly-hungry-forced-use-uk-food-banks-covid

[Firstimer703]

We often wonder the same thing OP! Think the answer is either credit or parents. I bought my first house at 21 and I'm working in a very well-paid job and I still can't do some of the things I see others doing - extensions, new cars/kitchens etc. My husband is a debt advisor and he says most people are living on credit.

[LovelyUserNames]

So your car, house and house contents and life insurance comes to £900 a year? Are you sure?

I am just about to renew our house and contents insurance and the best quote I can get it £600 pa. Car insurance combined is around £600 and we don't have life insurance.

[Hopeisnotastrategy]

@Babdoc

I started out with DH in a slum tenement with no bathroom on £15 a month rent, back in 1977. We saved hard, and bought our forever home in 1983 when the mortgage interest rate was 15%.
We were down to our last £30 in the bank when we moved in! We had no stair carpet or tv for 3 years.
When we had the DC, DH was allowed one pint of beer a week, as we couldn’t afford any more. We budgeted to the last penny.
I think young couples now are not prepared to accept the standard of living that we suffered back then, so they take on a lot more debt, and buy on credit.
I was widowed at 35, the mortgage was paid off by the life assurance, and once I was working full time again the DC and I had a comfortable lifestyle. I invested heavily and also inherited from both sets of parents, so I finally got my new kitchen at the age of 60. And was able to give both DC a 50% mortgage deposit.
You just have to weigh up priorities, OP, and decide what level of debt you want or feel comfortable with. Everybody’s circumstances are different - those people you envy with lovely new cars/kitchens/holidays might lie awake at night sweating with fear about their repayments. (Or be sad widows who would trade all their possessions and savings to have their DH back.)

I can so relate to this in our early years @Babdoc and you have my full respect. Well said and bless you.x

[endlesswicker]

[quote Nocares]@shinynewapple21 nope! House was dirt cheap, even when renovations are completed we won't have spent as much as it would cost to buy a completed house.

Also we have plenty of disposable income, but not enough to just save and buy a kitchen one month then get a new car 3 months later and then a bathroom etc. If you see what I mean?
Then if we wanted to also go on holidays and enjoy life on top then we'd be saving up for decades!!

Even with our very good disposable income, it would take years and years to buy nice things through savings![/quote]
Hardly anyone could afford to do all that in one year without putting the whole lot on finance.

[Yakkabee]

Why do people still think having debt = bad credit? It’s quite the opposite! Having good debt, without missed payments means you will build up excellent credit and be offered the best rates. Therefore the more debt you have, the more you can get and the cheaper you can get it too!

Education on credit scores etc needs to be done at school. “Avoid debt” is a very old fashioned advice. Many people who aren’t hugely wealthy or get inheritance etc. buy nice things with credit. Life’s short. If you can afford it and understand how to manage it, debt isn’t the worst thing in the world.

[Bluewavescrashing]

Priorities. Would you rather have frivolous spends now or a new bathroom next year?

[Soontobeseller]

Do you have any quality of life OP? Not being rude but you’re listing all your bills then saying you save the rest so do you actually spend anything on enjoying life? Doesn’t seem like much of an existence to me!

It sounds a bit like you want it both ways. You want to be able to save loads but also have new things like kitchen etc.

[TangerineGenie]

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

That's actually pretty high, EON send us statements that say average dual fuel bill for a 3 bed house is £89.

[Wondermule]

0% finance is the answer to this one. You just split payments. As long as you can afford repayments, it’s all good.

[May172010]

@Yakkabee interesting. Apart from my mortgage I don’t have anything on finances/credit cards/leases and my credit score is still excellent

[HTH1]

[quote Nocares]@shinynewapple21 nope! House was dirt cheap, even when renovations are completed we won't have spent as much as it would cost to buy a completed house.

Also we have plenty of disposable income, but not enough to just save and buy a kitchen one month then get a new car 3 months later and then a bathroom etc. If you see what I mean?
Then if we wanted to also go on holidays and enjoy life on top then we'd be saving up for decades!!

Even with our very good disposable income, it would take years and years to buy nice things through savings![/quote]
I don’t understand the maths here. You say it would take you a decade to pay off £28k (so £2,800 per year or approx £233 per month is the max you could save) but also that you have “plenty” of disposable income.

[BlueSoop]

My Dad bought me a car when he got his retirement lump sum. DH drives a company car. We saved a house deposit and after a few years we remortgaged to pay for a new kitchen and windows. Also we haven’t had a holiday for 15 years. We rarely have expensive treats like coffees or takeaways, or trips to pubs and restaurants (pre Covid). We don’t have subscriptions like Sky and Spotify. We don’t have beauty treatments like manicures and hair styling.

Meanwhile our friends had a £6k holiday to Disney World, they have Sky and weekly takeaways, she gets her nails done regularly and her hair dyed, and they regularly used to go out eating and drinking. Then they got all jealous about our new house - but our annual mortgage costs less than their holiday did. They made snarky comments about our £2k gaming computer but she spends that much on her personal appearance every year.

[rawalpindithelabrador]

@Yakkabee

Why do people still think having debt = bad credit? It’s quite the opposite! Having good debt, without missed payments means you will build up excellent credit and be offered the best rates. Therefore the more debt you have, the more you can get and the cheaper you can get it too!

Education on credit scores etc needs to be done at school. “Avoid debt” is a very old fashioned advice. Many people who aren’t hugely wealthy or get inheritance etc. buy nice things with credit. Life’s short. If you can afford it and understand how to manage it, debt isn’t the worst thing in the world.

This. There's also a lot of smug virtue signalling towards debt, like it makes you a superior person to drive an old piece of shit, never have anything nice and look down on others who do and assume they're just feckless and will be in a worse place to you some day.

[Nocares]

@delightfuldaisy19 thank you. I needed to hear that and I need to stop stressing. Luckily my DP is laid back and tells me the same, that everything will work out in the end!

To everyone saying 2K is lots to save. Yes it is i agree. However you must remember than if we had two cars on finance like lots of people apparently do and had debt then it wouldn't be 2k, it would be much much less and seem more average (depending on your circle).

My question was how do people manage to have both cars on finance and credit cards yet still also having disposable income on top for house renovation and holidays. For us it seems like one thing or the other.

But now I see other ways to have a bit of both I will seriously consider.

[bjjgirl]

It's about having disposable income, we ensure we have a lot. We could have gone for a larger home/ better area but prefer to live comfortably

[rawalpindithelabrador]

See, there you go. ALWAYS a reference to Sky, takeaways, holidays and nails.

[Yakkabee]

@May172010 if you don’t use credit, you won’t know if you would actually be accepted for something. High credit score alone doesn’t mean you’ll get a loan you want. All providers use a different scoring system too, so you may be high on some and low on others.

If you have no, or few, credit agreements then providers have no history to check that you are a reliable customer. The very act of being accepted for credit, and making payments, will increase your credit score and make you a reliable bet for future credit providers.