Money - you spend what you’ve got

[CountTheStars]

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?

Earn more than your boss and definitely don’t spend up to the limit. Think it depends on your character what your appetite to risk is and how you’ve been brought up. It’s not a given.

We earn roughly £90k a year but our expenses are set when we where earning £60k - we Over pay on our mortgage, save more and decent investments and cash savings. Cars we run for ever and have a good life.

I earn more than you and both spend and save more but if I were on your salary there’s no way I could be a homeowner. I’m not even sure I’d be able to rent a flat (as opposed to room in an HMO) in this area on that salary!

We earn about £92k and spend up to that.

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

I find OP's sweeping generalisations are true as sweeping generalisations. They tell us nothing about individuals, though. A big problem is that being poor is expensive: you literally don't get opportunities to buy in bulk, get the cheapest tariff, have the most cost-efficient transport, etc. There's a whole extra skillset in knowing how to stretch the pennies when you're poor and can't take advantage of deals easy to get for people with just a bit more income.