If you are financially comfortable, have you started cutting back on non-essentials?

[LabraDabraDoo]

I realise that we are very fortunate to have the financial headroom to choose to cut back and at the moment we spend quite a bit on non-essentials. We did a budget last night to look at likely price increases (especially fuel) and it looks like, while our jobs are secure ( although our investments are in the doldrums) we will be cutting back on quite a few non-essentials. Anyone else also making this choice yet?

Our list includes:
Back to buying decent quality supermarket meat and reining in trips to the farm shop.
I’m not buying clothes this Spring, I have enough to clothe a hundred middle aged women. We aren’t heating unused rooms in the house. Horse riding lessons are being suspended ( kids didn’t seem too bothered so that’s an easy £200 saved). We’ve cancelled our plan to refloor downstairs (wooden floors, so that’s a big saving). I planned to raise the children to a cottage in Norfolk for a couple of weeks in summer and we’ve arranged a house swap with a friend instead. We are not going out to eat for the foreseeable, and outings will be free swimming at the gym, dog walks etc. All other home improvement plans and big spends ( I considered renewing my car) are on hold. There are some things I hope we don’t have to cut, like cancelling holidays, music lessons and our lovely cleaner. We are still saving money into pensions and investments.

Anyone else making cutbacks? Do you think it’s going to start having an impact on people who provide non-essential services or are they still enjoying a post-Covid boom?

Are all the ingredients for the things you’re making free @Soihaveagoat?

@CoastalWave I tutor on the side, and it was going to be my main job when I have to give up work when disabled ds leaves school. I am always at maximum capacity, and I now have zero tutees. I was charging a very reasonable rate too, but for my families a tutor is an extra rather than a need, so I understand. It really taught me that I can't rely on it as a steady income stream.

Still going on their fancy holidays and still driving their posh cars.

I felt a lot of sympathy until I read the above comment. The cars will either be tied into lease contract or already paid for and holidays are also likely pre-booked and paid for.

A wealthy family who prioritises education enough to pay for your service in the first place will not make the decision lightly to stop.

We are fortunately comfortable but are making as many cuts as we can to ensure the inevitable school fees increase is manageable for us. Our car (although not fancy) was paid for upfront with cash so will not be changing and holidays for this year were booked and paid for in 2021 too so will not be affected. Moving forwards, holidays will be reduced.

Our spending on smaller things will sadly be reduced - the little we did eat out will now stop as it has become so much more expensive in the past 6 months and likewise for other small luxuries.

A lot of expensive cars seem to be on leases too.

That’s because it sometimes makes financial sense to lease an expensive car rather than buy one.
It’s not necessarily people living beyond their means.

I got my car (which is a tiny city car) on Pcp because it made no sense to buy it outright.
The finance deals for new cars are really good at the moment, I’m not paying any interest at all and they gave me money off the cost of the car and free services.

I went in wanting to buy in cash but instead of paying 14k outright, I paid 5k deposit then £100 a month for 3 years and if I want to keep the car which I probably will then I will pay £4500 when the deal runs out.

If I had wanted to buy a 3 year old version of my car it would have been pretty much the same price as a new one because there was a 6 month wait on a new one and most people couldn’t wait.

They are incentivising these kind of deals because there’s a shortage of second hand cars at the moment (and new ones, hence the wait).
These deals mean that the garage is in steady supply of second hand cars which they can either sell outright or lease out again when the three years are up.

It used to be that cash is king when it came to buying cars but it’s just not true anymore.

I’ll probably keep my car because I love it.
The way I look at it is I will have driven a brand new car for 3 years for £238 a month (if you include the deposit in the monthly payments) and then I’ll get to buy a 3 year old car with incredibly low mileage and no surprises for the bargain price of £4500, which I’ll then drive into the ground.

Why have your money sitting on your drive when you could have it in your investments?

Leases are only a problem when people go way beyond their means with them.
I have a friend who pays more for her car than her mortgage and it’s in the garage all the time (Bet you can guess the make of car).

Are all the ingredients for the things you’re making free

She said they’d be £10

@MoonbeamSprinkles

Are all the ingredients for the things you’re making free

She said they’d be £10

She didn’t. She said the meal would cost a tenner instead of £20. 🤷‍♀️

So she did. My bad. blossom

@MoonbeamSprinkles

So she did. My bad. blossom

No problem ☺️

Still going on their fancy holidays and still driving their posh cars.

I booked a holiday in 2019 for 2020 and we're finally going this year after having it rescheduled twice. If I could get a refund I would but its not possible!

Our family car was bought outright 4 years ago. If I sell it I'll lose out as I wouldn't be able to replace it in future due to price rises and depreciation.

PP are confusing assets with income. Our current income level requires us to cut back on future spending and is nothing to do with assets we acquired a few years ago and continue to use today.

You’ve just described your car as depreciating therefore it’s not an asset @hemhem

It meets the dictionary definition of asset. It’s still useful even though its value has dropped.

@bringsexyback its still an asset. Assets can both appreciate and/or depreciate in value. Cars, houses, paintings, wine, stocks and shares, furniture, clothes etc are all assets.

The point is that my money is tied up in the asset and therefore owning it today is irrelevant and doesn't affect my current income. Its a reflection of my ability to purchase it 4 years ago, and clearly a lot had changed since then!

@Blossomtoes I already make nice hummus and freeze it, will stick homemade flatbreads in while I have the oven on for lunch and will make the tsatziki out of stuff that was going off in the fridge.
Certainly cheaper than getting it all at the takeaway and there will be more than enough food for four.

I have cancelled my ridiculous fancy cat food subscription and am currently fighting with Virgin media to cancel with them. Changing yo vodaphone will release £60 a month with can go to the gas and electricity. We also changed a phone contract to sim only and saves another £20 a month. Fully appreciate that we are lucky to have finances to do this.

@Pyri

I understand the point of this thread but think it’s a little tone deaf to talk about cutting back on horse riding lessons etc!

And 17 pound chickens! Some times MN is quite literally another world

Some times MN is quite literally another world

There’s lots of different worlds on here, and not just in financial terms, none are more or less valid than the others.

Yes, the £17 chicken was a real eye opener, I had no idea you could pay that for a chicken - or at least not a dead one!

@Soihaveagoat

Just a little tip that I've just thought of. We're getting a takeaway tonight from a Greek food place, a mixed platter. Instead of getting all the sides to go with it we'll just get the medium size and I'll make flatbreads, tsatziki, hummus etc to to with it. So still plenty of food and feels like a lovely treat but only a tenner instead of 20 quid.

What's the point of a takeaway at all if you end up cooking half of it? Surely it makes more sense to buy the meat and cook the whole thing. Takeaways cost £££ more than the ingredients because you're paying to not have to cook...

We are financially fine, but mainly because we already live fairly frugally. We very rarely have takeaway or dinners out, have cheap sim only phone contracts, don't drink alcohol, only buy meat on special offer etc.

We have only made some small changes so far e.g. using the slow cooker and pressure cooker instead of the oven

When the weather is better I will walk to toddler groups etc with DD2 rather than driving.

We could cut back on kids activities, Netflix/Prime and use the heating less but I'm reluctant to do any of those (yet)

Yes, and isn't that the value of MN? Having a window into different people's lives. Well-off posters are often accused of having no idea how the other half live (sometimes rightly, sometimes wrongly). But I don't think it's somehow a badge of down-to-earth honour to be unaware that some people pay 17 quid for a chicken. There are lots of people in the UK living lots of different lives, but they all economically interrelate. As other posters have frequently said, the well-off person no longer buying their 17 quid chicken will have an impact on the local farmer, on the 18 year old on the till in the farm shop, on the owner of the property the farm shop leases, on the producers of all the other local foods that the farm shop sells, etc etc. The whole point is that these people absolutely do not live in a different world, even if their lives look very different.

PP are confusing assets with income

Yep. We have virtually zero income, but considerable assets. So we need to be sensible with our assets because they need to last us until pension income arrives AND we don’t want to drain the pot too far because we will still want to be in a position to pay for future care should the need arise.

We’ve just had notifications from our ISA providers that the value of our holdings has dropped by over 10% since the last formal valuation at the end of December. It’s a legal requirement for them to tell us this and explain why. We are not panicking because these are long term investments and over the period we are planning for the market will almost certainly recover.

BUT if the war in Ukraine spreads and the economy tanks, it could start to become an issue. So while we are clearly in a far better position than people who are losing income or having pay freezes and already on a tight budget, that does not mean we can ignore the situation. It is only prudent to keep abreast of what is happening and think about where you could cut down if necessary.

I posted earlier in the thread and have found it very interesting reading everyone's reaction to the current situation and what they will do about it. As I said we're comfortable but don't have the heat on, apart from the fire in the sitting room. However hearing about the poor tutor and the anecdote of the window cleaner is sobering. We live in a large-ish village - we will still have fish and chips from the chip shop once a week as it's great quality and portions are so huge that one portion of fish and chips does for two of us. I want to carry on supporting them. Interestingly, and worryingly, yesterday I was the only one in the shop. We'll still have the odd pub carvery too, to support our lovely local pub which is the heart of the village and which obviously had a very hard time during Covid. Spending is so subjective, I've an extremely wealthy friend who was really worried about the increase in her heating bills - and yet I've other friends who think nothing of spending £800 a month on a luxury lease car. I guess at the end of the day it's all individual choice and how you feel about your own situation. For now we'll carry on having a few treats while we can.

As others have said, cutting back on services or donations means those people and organisations suffer. My lovely cleaner has been with me more than ten years and there's no way we'd let her go - besides now being a friend, she's just bought her first home so really relies on steady income. When we had the builders in last year to adapt the house (privately - council wouldn't make any contribution as DH 'not ill enough - surely the time to make the adaptations is before the building work would stress him out and exacerbate his condition leading to more hospital stays? But's that's for another thread!) I cancelled the monthly window and bins cleaning. There was no point with all the building dust and a big skip outside. I was going to resume it around Easter, but might hold off. I feel like they already lost me as a customer last year so won't feel the loss now IYSWIM.

But we definitely won't give up our animal donations, they're not very much and the rehoming charities are overwhelmed with hand-ins now lockdown buyer's remorse has set in. And in fact I've just taken on a foster cat family, terrified little mother cat with five kittens four surviving kittens who was abandoned in a box outside my local cat charity. We were offered food and litter for them but said we're happy to supply. They pay any medical costs.

Won't give up the car as DH can't go on pub trans, but using it as little as possible, now shopping at Aldi evey other week instead of weekly Sainsburys. And my big resolution is to use up all those murky packages in the back of the freezer and start batch cooking again, it's cheaper and easier not to mention more nutritious to have frozen home made soup, chili, lasagne etc when you want a quick meal.

Its not "tone deaf" at all. There are a large number of people who are in a similar financial position to OP and looking to cut back. Probably as many, if not more, people are in this bracket than in the "breadline" bracket. Why shouldn't that large proportion of the population not be allowed to discuss how the price rises have affected them?