Do you ever wonder how people afford things?

[RedRobyn2021]

We're not poor, we have a little house (2 up 2 down) that us (and the bank) own, in a really nice place and we have a lovely dog and beautiful baby.

But sometimes I find myself comparing us to others around our age (I know I shouldn't)

We are so careful with money, we always have been. We own a little car which we had on finance but eventually paid off.

I know a couple younger than us in their mid 20s who live in a brand new 3 bed, with a baby and a dog, two horses, who have just had a very fancy big wedding, showing off their brand new truck on social media this morning.

Another couple I know same age as us (early 30s) have a bigger house, with two expensive cars and a baby too.

I am so grateful for what we have and I give myself a talking to often to remind myself of this. But occasionally, I will admit I secretly feel a little jealous and also like a failure, like I went wrong somewhere. How on Earth do people afford these things?

Please be kind, I know I am being incredibly materialistic, but surely I'm not alone in sometimes feeling like this?

Recognise things are not always as they seem. People might have got money from an inheritance, or a large gift and often people buy with lots of credit…cars etc.

People can look like they are doing really well…..but you can be surprised how things can change for them if there’s one crisis in their lives….ie if one person loses their job. You can then see the cars vanishing, or people moving house quickly. Often they are doing well in the moment but don’t have hardly any security and just one crisis unravels it all.

Another thing that’s interesting is what happens as people get older. Sometimes those with the big house and cars or the plentiful holidays need to keep working until 70, whilst those living in the smaller houses and with the more frugal lifestyles suddenly retire at 55 and have a very comfortable retirement. Or sometimes you’ll see someone who was living frugally suddenly putting their child into an expensive independent school for Secondary, or buying a holiday home or whatever.

My point is, what you see on the surface doesn’t always reveal people’s finances and security.

An undermentioned one, I think, is not realising much how some people DON'T spend on unobvious things.

For example, my husband and I don't have hobbies that cost any serious money. I write. Electricity and a laptop is all you need for that. My phone is a nice one, but refurbed, and I don't spend much on data.

Same with our wedding - from the way people talk, it seems like they think we spend way above the curve. But it was a DIY wedding. The buffet cost £150 for 100 people plus staff costs. Free bar was about £1500 plus staff costs. Whereas others pay package costs for a lot less.

And holidays - we go on a LOT, but usually by just pointing skyscanner at the cheapest destination at the time. Whereas others go more rarely and spend more - but extrapolate their "one off splurge" price to our "frequent and cheap" price.

It's part of a whole picture, but everyone has their blindspots in their own spending.

@SmallBoyFury
We’ve arrived where we are through a mix of good luck, hard work, and risk-taking. That makes us no better or worse than others who don’t earn as much, but assuming that everyone who has more than average is in huge debt is a misconception.

Yep, that’s about it. The “good luck” can sometimes, but obviously not always, include parents helping out financially when young. Risk-taking is important. I would also add being prepared to sacrifice certain stuff at some point along the way. Eg, moving to another part of a country you might not like, or even a different country entirely, if there might be opportunity there. Working unsocial hours for a year or two, , eg into the early hours, to get trained or to get necessary work done. Sticking with unpleasant colleagues for a few years. Short term pain long term gain etc. If you dont do some thing (or some things) differently to everyone else, it’s highly unlikely your salary will be much different either.

@user0176

I always think it's pretty bitter to just assume someone is in debt if they more than you, my first assumption would be they earn more money? People would probably assume we are in debt as public sector workers with the house and lifestyle we have, but our only debt is our mortgage, our other outgoings are quite low.

Agreed, but some people especially on MN don't like it when other people are doing better than them, especially if they don't appear to be working 70+ hours a week each

You own a house and a car OP, drop the 'little'. You also have a partner, a baby and a dog.

You have what most people want, I order you to enjoy every moment of it.

I said to Someone, "I earn less than the national average." Someone said to me, "I always have, mate." Somehow, Someone always had enough food, clothes and warmth, a bit of beer money and not too bad a life at all. If you're keeping your head above water and not worrying about being in debt and not fiddling other people or the tax man, keep calm and carry on.

This comes up every so often. This was my reply last time and I stand by it:

It's got to be one of five broad categories.

(1) They earn vastly more than you think (dishonest about cash-in-hand work, or simply a bit cagey about actual, genuine salary). Probably unusual, and surely difficult to hide, and may not last.

(2) They are extremely frugal. Very difficult - and anyway lots of people are, and are still skint. There's a limit to how far you can "cut back" and yet still have expensive cars, clothes and holidays. Savings on value tins of tomatoes aren't going to pay for all that.

(3) They have a tidy amount put away in savings over the years. Possible, but again won't last for ever.

(4) They buy far more on credit than you are aware of. Quite likely, but will eventually come round to bite them.

(5) They have some hitherto undisclosed source of income - bank of Mum & Dad (especially for holidays), inheritance from grandparents or great-aunt, secret lottery win. Likely, and again not a bottomless pit.

My feeling is that it's almost always far more likely to be (4) and/or (5) than any of the others. They're the options which people are least likely to own up about, and indeed they may wish to give the false impression - either by implying it or saying so directly - that it's a bit of (1) and a bit of (2), because that feels more "earned".

Ask yourself - if it was you with option (5), would you keep it quiet? I know I would.

I agree that it is extraordinarily frustrating when you don't know, because then you start to suspect nefariousness. But you can understand why they would not want to let on about (5) especially, because they might imagine it could create bad feeling or awkwardness if known about.

Unless people are fully open about their finances, no one knows how anything is financed, so speculation is pointless.

I have a relative who moved abroad when young, set up a business, eventually sold it for a lot of money. He was thought of as being well off by myself and other relatives, the family success story. I recently spent some time with his siblings, and through general chat, found out he had spent most of the business profit, sold his house to pay off some debts, and was now renting, with a view to buying a small flat. His parents have never given any indication of that!

My own kids got an inheritance a few years ago, which means (with other savings and money we may pass on) they will have minimal mortgages when they eventually buy (and depending where they buy). However, only family (also beneficiaries) know about the inheritance. No one else needs to know. There may be speculation when my kids buy, but no one has a right to know their financial situation.

I have recently retired at 58, a friend (younger by about 6yrs) has made some very catty remarks about people retiring young. She knows absolutely nothing about my finances and never will!

We moved to a much cheaper area to buy a bigger house. It meant some sacrifices, but if we’d stayed where we were when we had DC1 we wouldn’t have been able to afford more children. We borrowed the money for our deposit from my dad but have paid every penny back. However we still benefited greatly from it being interest free.
We have a new, expensive car. It’s a company car, but no one would know that unless they asked.
DH earns a fairly high salary. My salary has taken a hit through multiple maternity leaves etc but is still decent. Our childcare bills are high but will be far lower in the next couple of years.
People upthread are right when they say on MN people like to assume that everyone who has more than them is in vast amounts of debt. I don’t know if it’s envy or bitterness, or both.
One of our friends is 36 and semi retired! He worked as an investment banker for years before he burned out, saved as much as possible and now works part time for a charity close to his heart for a very low wage while being able to spend a lot of time at home with his children.

I heard a saying once, about social media. It was something like:

Never compare your behind-the-scenes to someone else's stage show.

No I never wonder. If people aren't in the sort of jobs where their salaries might cover what they own, they're either using family money or finance deals.

Comparison is the thief of joy and apparently those who choose to live among or have friends who are worse off than they are are happier.... very sad, but that is human nature. No surprise that jealousy and envy are one of the 7 deadly sins.

It is hard to know why some own a bigger house etc. Eg my son on £24k owns his 3 bed detached without a loan as I gave him the money and the other children the same sum (which is why my student sons own a small 2 up 2 down each which currently they let out). My daughters have more expensive properties than my older son because they are lawyers and chose higher paid work than he did. So sometimes it is pretty obvious. I picked law aged 14 because I wanted a certain level of income. I picked business law in London for exactly the same reasons and worked until in labour and back at work when I had 2 week old babies similarly and will work full time until I die (which I am happy to do - I gave HMRC a third of my pension when I turned 55 ( spent it wisely HMRC and do not waste a single penny as it was hard earned.....) and the rest to the children for housing)

I think many jobs pay far more than others realise.

Manual/ semi skilled/ skilled trade also pays a lot better than people realise, particularly if you put the hours in. Plus maybe started earning 4 years earlier than a graduate and no debt.

Small lifestyle differences or choices have a big impact - I worked out I’ve paid £150,000 in childcare over the last 12 years, people who only use family for childcare save a lot (not necessarily that much though, I’ve paid more than most!).

Pensions - one person dutifully pays in 10%, someone else 0 but invests in a better house earlier. Some pay ££ into savings, life insurance, critical illness cover, savings for kids, etc, others pay the equivalent amount into a second car (on finance, and therefore regularly get a new one).

30 year mortgages. And then re-mortgage and extend the term again.

Even just being 2 years earlier into the property ladder makes a difference.

@WheelieBinPrincess my son is happy. He is also healthy in terms of day to day health. If you want to message me about my sons diagnosis go ahead. Just because he is disabled does not mean he is unhappy.
I find it bizarre you have taken so much interest. I don’t recall ever seeing your username before?

Probably in debt up to their eyeballs sadly.

@Xenia

Comparison is the thief of joy and apparently those who choose to live among or have friends who are worse off than they are are happier.... very sad, but that is human nature. No surprise that jealousy and envy are one of the 7 deadly sins.

It is hard to know why some own a bigger house etc. Eg my son on £24k owns his 3 bed detached without a loan as I gave him the money and the other children the same sum (which is why my student sons own a small 2 up 2 down each which currently they let out). My daughters have more expensive properties than my older son because they are lawyers and chose higher paid work than he did. So sometimes it is pretty obvious. I picked law aged 14 because I wanted a certain level of income. I picked business law in London for exactly the same reasons and worked until in labour and back at work when I had 2 week old babies similarly and will work full time until I die (which I am happy to do - I gave HMRC a third of my pension when I turned 55 ( spent it wisely HMRC and do not waste a single penny as it was hard earned.....) and the rest to the children for housing)

Good on you @Xenia I like how much you help your kids. I do the same, albeit much much smaller amounts

@WheelieBinPrincess and I have mentioned my sons disability many, many times. Maybe you didn’t see them but I have spoken about it.
As I said, I own rental properties so I do accounts, arrange renovations etc and also do these things for my husbands business.
I don’t even know why I’m justifying this to someone who seems to of taken such an issue with me without even knowing me but there we go.
We will send our sons to private school and our daughter is already there. What does that have to do with anything?
I may be in a better financial position than many, but that doesn’t mean I wouldn’t change things.

You already know the answer to your question - well paid jobs, inheritance or they are up to the neck in debt. People I know who are quite well off are the least flashy, they have lots of money but they buy second hand cars cash, don't have the latest technology etc. They invest and have amazing pension pots etc. The flashy people are often living on credit trying to show the world they have ££ and a certain lifestyle. I wouldn't compare personally, we are Joe average, not struggling but not rich, we have a nice average house and lifestyle which I'm happy with. People at my kids schools have ridulous houses, top of the range cars etc. Meh so what?!

I can remember being newly married, living in a little 2 up 2 down house and crying one day when DH and I walked along a nearby street of big semi detached houses. We were both in well paid jobs but I couldn't envisage ever being sufficiently well off that we would be able to live in a semi detached house and have two cars on the drive.

Roll on 30+ years and we now live in our own big detached house with 2 new cars outside. Not only that but we own other properties too and I have a lifestyle I couldn't have even imagined back then.

It's partly good luck but it was also a lot of hard work and sacrifice in our young adult years . And as other people have said, it would be nothing without our health and the health of our DC.

@WheelieBinPrincess you do know what stalking is? Why the obsession with me?
I have said many, many times my husband owns a business. This business exports :/
I feel really uncomfortable to be honest with your following of my posts.

I think many jobs pay far more than others realise

This. I'm a marketing managerfor a national charity. On the face of it, it sounds very middle class. But i earn less than an HGV driver and less than the national average wage.

The husband of a colleague is a GP. He earns almost three times what I earn. Three times. No judgement on whether its justified, simply to point out the massive difference this would make if I had three times the amount of money coming in than what I do now.

DH and I are a similar age to you and live the kind of lifestyle you describe in your OP. Neither of us has every accepted any financial help from family / inherited anything / had any particularly good luck financially (e.g no lottery wins - I wish!).

Ultimately, I think everything we have is down to our own hard work and life choices. Such as the careers we chose to pursue, which both pay well. Or only choosing to have one DC, then both going back to work full time so as to maintain both of our incomes.