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Original poster

Money - you spend what you’ve got

55 replies

CountTheStars · 19/06/2022 15:47

I have a theory that the higher your salary the higher your outgoings are. People earn more to spend more. So whilst someone on a £23,000 salary might look at someone on a £66,000 salary & think they must be rich in comparison, the reality is they’re most likely not, in a financial sense because you just spend what you have; you cut your cloth accordingly.

The person on £66,000 (my boss) is a case in point. His wife also earns similar, they send their kids to private school, are constantly upping their mortgage to fund extensions etc & as a consequence he moans that money just goes in & straight out again. They have a lot of extravagances in their life, eat out a lot, expensive holidays etc.

I’m the person on £23,000. I am a homeowner, I’ve got a good deal on my mortgage. I haven’t moved to a bigger house, my kids go to state comps & I put approx £600 per month aside in savings each month. I don’t buy takeaways, I am frugal with my food allowance . On paper, I am richer than my boss. Holidays are DIY affairs, in the UK, Wales, the Lakes etc.

So surely being financially solvent & financially aspirational is about making what you have work for you, rather than over-earning to over-pay.

What do others think?

OP posts:
justanotherlaura · 19/06/2022 15:53

That's just your boss making bad money choices. I earn 45000 and have a 17 year old car and have a modest mortgage. I love the same way as you and can save 1500 a month as I mostly live like I did when I earned a lot less.

You can earn more and save more and I'm sure there are lots of people that do in the same way some people earn 20000 and live the high life on credit. I don't think how much someone earns has much to do with the way they spend it

mobear · 19/06/2022 15:53

Although we are not at all over extended, I do buy much nicer things now we have more money, and go on more and nicer holidays so I definitely think there’s truth in what you’re saying but not all high earners over extend themselves. Perhaps your boss would be similarly over extended on your salary.

Luredbyapomegranate · 19/06/2022 15:57

Well being solvent yes, but being financially aspirational is working on earning a good chunk, and making sure that you invest a good chunk of that for your long term security. Which some people do and some people don't.

It sounds like your boss is mismanaging his money, but people do that at all levels of earning. Of course people's tastes do mostly move up when they earn more , but plenty of increase saving and investments as they go. Earning more just means you can do both.

It also may well be that your boss and his wife do put a fair bit away in pensions, he just doesn't talk about it because it's dull, or because it ruins his narrative of not having any money. Plus the fact, if they bought wisely they should make a killing when they downsize the house.

It sounds like you do a great job of having a good life on what you have, but I presume if you could earn £60 or £120k there are things you could do and money you could invest for your future that you can't now.

Interested in this thread?

Then you might like threads about this subject:

General money
Slinkymalinky03 · 19/06/2022 16:05

Your boss may already have thousands in investments and pensions so he has less need to save and can spend the money he earns enjoying a luxury lifestyle. Our outgoings have definitely not increased in proportion to our income over the years but I would rather earn more and live his lifestyle than yours.

SweetSakura · 19/06/2022 16:06

Moaning about spending lots on school fees etc is just a form of stealth bragging though. Doesn't mean he isn't solvent.

Plus I know I worked up the career ladder partly for academic and personal satisfaction but also precisely because I knew it would enable us to pay for nice holidays and hobbies for the children and a big house. I put money aside too. But I dont see the virtue in extreme frugality when we never know how much time we get on this earth. I am lucky to love my well paid job though

OnTheGoAlways · 19/06/2022 16:07

Tbh I'm more interested in how you save £600 a month on £23k!

Your theory is flawed...your talking more so about access, your line managers income allows them to send DC to private schools and helps fund extensions...those on 23k just don't have access to such things.

ZenNudist · 19/06/2022 16:15

Well you do use what you earn so you don't necessarily feel rich but YABU to think your boss isn't also saving into pension and investments. I don't think his salary is a lot but it seems like it to you. It's nice to have a big house, eat out, holiday somewhere decent. I don't think you can sneer at his choices because they aren't ones you'd make.

Testina · 19/06/2022 16:29

I’m not sure that “people who earn more spend more” is really a theory.

On average, yes - of course people who earn more spend more. But around that average, there are plenty of outliers. Possibly you and your boss are among those.

If you truly wanted to analyse the relationships between income and discretionary spending, you need to look at more data. I’m going to hazard a guess for example that for you to be earning £23K and be a homeowner and be able to save £600 a month, there’s a missing bit of data to explain your home ownership. Deposit help, divorce asset split, living in a cheap area, parents who provided childcare for free, being of an age that you bought in the last recession… something like that. I don’t think that the “average” single person who has never earned more than £23K and lives in an “average” house price area is in your position.

Testina · 19/06/2022 16:37

You mention your U.K. holidays and making what you have work for you… yet didn’t you start another thread complaining how awful U.K. holidays are? So they clearly don’t work for you. Perhaps those that “over earn to over pay” are simply aspiring to earn what allows them to have the holidays that do work for them? Which means they’re not over paying at all.

ImplementingTheDennisSystem · 19/06/2022 16:42

I earn £50k, but my outgoings (my half of the mortgage and all bills, and a £70 food shop a week for the two of us) cost £9k a year. I know this as I recently did a granular analysis of my finances because I was thinking of retraining.
I'm 38 and I've never increased my costs as I've earned more over the years. In 2005 our rent was £750 a month, in 2022 our mortgage is £630 a month. We could have a more impressive house but prefer the financial freedom.
I drive a 13-year old Fiat 500.
However, I've certainly seen many colleagues get pay increases only to spend right up to the limits of what they have.

Bighairydogs · 19/06/2022 17:15

Seriously how are you saving £600 on a salary of 23,000?! If you’re taking home £1500ish a month how are you doing mortgage, food, council tax, bills, LIFE on £900?

Bighairydogs · 19/06/2022 17:18

Our basic bills (council tax, water, gas/electricity, insurances, car tax etc) comes to £500ish, and we live in a small 3 bed terrace. Assume most families of 4 are similar or thereabouts. How are you doing mortgage & food & everything else on £500 a month?

Fizbosshoes · 19/06/2022 17:22

Tbh I'm more interested in how you save £600 a month on £23k!
Me too. I earn around 26k and am mostly likely to save 600 pence per month!

Original poster
CountTheStars · 19/06/2022 17:37

@Testina The complaining about holidays thread was more about going away with very young children, nothing to do with finances.

My DH is also bringing a salary in, we chose our house carefully when we bought it 10 yrs ago for a very good price. His salary is not far above mine. We just haven’t upgraded since & we do live frugally.

It’s just an observation - sometimes I’ve thought about the joys of earning a better salary but I think the reality (for most) is that you’d spend it anyway so I’m not convinced it necessarily leads to more financial control. Or savings

OP posts:
Testina · 19/06/2022 17:43

You did complain both about the expense and the U.K. weather though. And fair play there was plenty else to complain about 🤣 But if cost and weather is part of the issue, my solution stands: some people choose to earn more to have good weather and for it to seem relatively less expensive. Which isn’t over earning and over paying, just choices different to yours.

I think you rather gave the impression in your OP that you’d mastered happiness with the simple life and could save £600 on a £23K salary as a result. I think we’re all a bit disappointed that the secret is… have a husband on £23K too 😉🤣

Isonthecase · 19/06/2022 17:45

I think it depends on the person and their approach to money. Some people fritter it however much they have and some people don't. We've always tried to put some of any pay rises in to fixed savings to stop our spending growing too but I've also found that some spending is worth it such as easier healthy meals are more expensive, great childcare is well worth it, etc.. I'm very ok with spending more on those things now I can.

AllFreeOwls · 19/06/2022 17:49

I think you rather gave the impression in your OP that you’d mastered happiness with the simple life and could save £600 on a £23K salary as a result. I think we’re all a bit disappointed that the secret is… have a husband on £23K too

Absolutely, it sounded like you were paying for everything on your own and still some how saving £600 a month!

Original poster
CountTheStars · 19/06/2022 17:55

@Testina but where did I say I was happy? 😀😀😀

This thread is not about being happy. It is about the simple truth that if you’ve got money you spend it. I used my boss as an example. And myself as a contrast. He might be happier than me because he has more money to spend on expensive things. But he spends rather than saves. And he earns more.

OP posts:
Tinkerblonde1 · 19/06/2022 17:57

The old adage people spend to their means isn't a new thing.

Agree op was misleading. You are actually as a family on circa 50k.

Testina · 19/06/2022 17:58

Ah, I interpreted “making it work for you” as meaning that you were happy. Plus - well, you just sounded a happy kind of person 🤣

Tinkerblonde1 · 19/06/2022 17:58

Does your boss's OH work?

Tinkerblonde1 · 19/06/2022 18:00

Sorry just reread so they have circa 120k as a family.

Original poster
CountTheStars · 19/06/2022 18:09

I’d be interested to hear from perspectives of those with higher incomes. Do you manage to save? Do you find you spend up to your limits? I guess putting more into a pension would be a real consideration.

OP posts:
Original poster
CountTheStars · 19/06/2022 18:10

@Tinkerblonde1

No, we have circa £48,000 as a family.

OP posts:
Grumpybutfunny · 19/06/2022 18:10

Yes and no, I am in the market for a new car and keep wondering what the hell people earn to drop 60k on a car. The truth is not much more than us but we could never imagine doing it even tho realistically we would get approved for the finance.

I think once you get over a living wage (30k ish a head) it becomes about your priority in life and your willingness to live on credit.

We bought at just under half the mortgage in principle we were offered and the new car will likely be around the 30k mark. Our minimum repayments and living costs come in at just over half of my salary but we don't spend excessively the rest is saved and invested for ours and DS future. Sure we also spend it if we want something like having the garden landscaped etc.

Only 8 years ago our total household income was less than I earn alone now, it doesn't feel any different