To be confused by other people's finances...

[Haudyerwheesht]

I know it's none of my business obviously but still....I want to know!

For example how does my neighbour who only has one adult working in an averagely paid job afford to go to Florida and do Disney / universal etc twice in 6 months?

How does another person I know live in an enormous house and wear designer clothes and have lovely holidays etc when they're 24, with 3 kids and don't work (husband does). I kind of know the answer to this as they're both from wealthy families....but I want to know the ins and outs because I'm nosy!

Why does my friend rent for 1.2k a month and fritter money away when they could ft a mortgage much cheaper if they had a deposit?

How can my sister moan about money when she has no mortgage or housing costs, no council tax and her and her husband both work full time??

Obviously aibu to be so nosey but I'm not the only one am I?

I think people wonder about us- they ask us! One school mum asks me outright about our holidays. We look for cheap deals. We are
frugal, have made some money in shares and have a BTL that we are selling this year to free up some cash for either a pension plan or shares/ smaller BTL for pension money when the time comes. We were lucky that we sold our house in an expensive area a few years ago to move to somewhere cheaper, and invested some of the money. Many people I know are blatant about being short of money. Or they have a lot of debt to finance their lifestyle. I don't broadcast the fact we are comfortable (not rich, far from it). I buy clothes etc mostly from charity shops/ second hand. We choose to spend the money on holidays/ save it instead. I don't think people always look to the future for when they get older. I think also many people don't have the money to do that, whether through overspending or their circumstances.

In most cases where I've known people to seemingly have lots of cash, it's been the case that they've been getting money from family members or are mortgage free due to family members giving them a lump sum or buying their house for them.

I bet you never pay 'full price' for the sorts of grocery items like coffee, tinned tomatoes, rice, toilet roll, cleaning products, shampoo etc, that are always on offer somewhere, do you?

But if you told them how you did it, a lot would probably say 'oh I couldn't be bothered with all that faffing to save a couple of quid' even though it's not a couple of quid, it's probably hundreds of pounds a month when it all adds up - take care of the pennies and the pounds take care of themselves

^ that's the sort of frugal tip that only works for comfortably off people:

1. you need to have space to store pantry items if you buy things when they're cheap rather than when you need to use them imminently
2. If you have a tight budget to get you through the week: you need to buy full meals to last that week, you don't have the upfront cash to buy a years worth of coffee just because it works out cheaper per pot!

It takes money to make money. If I had a larger home I'ld make do and mend more and bulk buy etc. If you have the space and time to do that sort of thing you're already better off

1. "Bargains" and bulk buys often involving driving further than your nearest supermarket, and having/using a car to transport more stuff home as and when it's available on the cheap.

yy tinsel. I used to have a tiny kitchen and had to store bulk bargain purchases in my loft or car which wasn't always practical. Since I've moved to a bigger house (ex council not a mansion) I've saved a fortune from having more storage and a bigger freezer for batch cooking. Same goes for toiletries, more upstairs space to stash away 3 for 2 toothpaste and shower gels.

I often wonder too. We're probably classed as comfortably off at the moment yet my eyes water when looking at holidays for next year, that's Europe too. Never mind Florida. No idea how much that would cost. We don't have credit cards, have older cars and live in the South East so cost of living is quite high. I do like to buy nice clothes for the kids though. Couldn't do it all and I don't know how people do.

I've given up trying to understand how other people manage their money. It often makes no sense to me at all. As long as they don't want to borrow money, I just stay away from asking about it!

Used to feel the same about SIL who went on at least 2 holidays abroad every year, updated their car every year, always seemed to eat out, go to concerts a lot. Then when she briefly split from husband, found out cars all financed with eye-watering interest, and much of lifestyle financed on credit cards.

They are back together, but realised debts driven by BIL who has to have everything of the best and likes to look flash. Whereas, if we don't have the cash, we don't buy it! Our lifestyle is much more low-key, but we don't have any debts to worry about...

I always post this because people on MN can have a fairly warped idea (in both directions) of what "well off" is.

The median household income for a family of two adults an so two children is £50k.

That means that if you have two kids and your household earns less than £50k, you are in the poorer half of all other 2-kid families.

Wages are a LOT higher than some people think. People get confused by the average wage - that is dragged down by part timers, semi-retirees, teenagers, students.

Again, half of all households with 2 children under 18 are earning over £50k pa.

Barbara - as you see with essential some do get to have them it seems to depend on the company. Certainly all airline employees get hugely discounted travel, even stewards and stewardesses as I know from personal experience as my niece kindly includes us in her family named members so we can use it too, sadly not a long haul airline and every flight is standby but maybe one tenth of full cost!

Definitely get the thing that it's much easier to do the frugal thing when you have a bit of a cushion and space. Also time. I don't have kids full time but when I do have a pack in then between their shenagins and work the batch cooking, bulk buying and flexible researching and responding to offers goes out the bloody window.

Source: www.google.co.uk/amp/s/amp.theguardian.com/money/2014/mar/25/uk-incomes-how-salary-compare

Agree with others - some are born with silver spoon due to the bank of mum and dad. Others earn a fortune, or set up their own company and are now reaping the benefits, or bought a house years ago, when prices were low. (One of our friends has just sold their company for a cool 2 mil!!) Maybe very few have won money, or more likely inherited!

The rest are getting themselves into serious debt......

I choose not to, which means compared to most of our neighbours we must look on the surface to have a lot less money!

I remember a programme a few years ago of 3 families, how they lived their lives etc. One family very frugal, hardly had or spent anything. Another family in the middle, and of course the last family Disney holidays, BMWs, designer clothes etc.... Turns out they were ALL on a household income of £40k - the last family had huge debts!! the first family had absolutely no debt, even paid off their mortgage and were well set up for retirement!

Argh bloody link: www.theguardian.com/money/2014/mar/25/uk-incomes-how-salary-compare

I used to wonder this, until I got married and saw how VERY careful my husband is with his money. Buys very good clothes/cars that last 10+ years, no cleaner, brings lunch to the office, eats healthy but mostly inexpensive food, saves money like crazy and invests it in real estate. When we go out with friends, we tend to do low cost things like hikes, picnics, inviting people to our home. Definitely no family money, gambling etc.

We have very low outgoings and no debt apart from our low mortgage, plus a fairly decent income. We live in a private house on a council estate. People who didn't know us well would wonder how we can on holiday 3 times a year and buy pretty much what we like!

I know what you mean. But im often the subject myself of "I don't know where she gets her money from." I am going abroad 3 times this year and on 2 other hols with all 4 kids. I've spend about £10k in hols this year. (I'm not saying no this to boast it's about priorities)

I think a lot of it is about priorities and financial history.

Holidays and paying off my mortgage have always been my priorities. I've never bought a brand new car or designer clothes.

I went to an extremely cheap town for uni. Super careful with money. Slogged my guts out dragging pallets in an Asda warehouse in the holidays - left uni with only the government student loan. Friends spent the summer in bed and running up credit cards for luxuries and going out.

Went back home - again slogged guts out saved half my wages for a house deposit. Drove an old bangers. Friends spent time on JSA and getting finance for brand new cars.

Bought cheap house at 24.
Always kept standard of living nearly the same as my wages increased, used wage increase to overpay mortgage. Got lodgers and overpaid their rent money.

Now, mortgage is down to £150 a month and I'm nearly there it being paid off only 9 years later. Some friends only just getting on the property ladder.

I accept I'm lucky as I've never faced a major financial crisis. But I've never had any debt as I'm able to just not spend money I don't have.

My friend and her hubby earn £90k a year between them, are still on an interest only mortgage, can only "afford" one holiday a year.

Difference is she is a clothes addict. I'm talking £250 a week on new dresses, shoes and clothes.

He mountain bikes and just randomly bought a new £2k one as he felt like it. Same with his camera hobby. When he wants a new lens he just gets it.

So I suppose it just depends on a variety of factors.

Often it's all about what you value. Plenty of examples on here of people who live in a consciously cost-effective manner day to day so they can take incredible trips or buy a property etc..., whereas others might want to dress in designer gear and drive an expensive car.

I was always flummoxed when I was in my twenties about why I was always broke, then I moved jobs to a company that had a much more subdued social scene and realised what an extraordinary amount of money I'd blown without realising it on cigarettes and alcohol! I really believe that basic money management should be taught in schools as a life skill...

there were two families who used to astound me with apparent lifestyle / income variances. One of them (2x public sector workers in undervalued high stress roles) turned out to be a major family lottery win shared with them. And good luck to them, couldn't have happened to nicer people.
The other? credit cards, default on rentals and moving regularly as a result, debt and job loss. No pensions, no equity in anything, porsche on lease. Empty hot air and lifestyle expenditure on visible props with nothing sensible in the background (which really annoyed the wife when they divorced)

I can provide some insight into how families survive in Hackney. If you purchased your house 6+ years ago, your mortgage is half of what it would be buying today.

Lots of people live in very small houses. I know lots of middle class families (2dc) who live in 1br flats, they have done this for years and maintain their lifestyle but compromise on homes. This will be the same for bigger families with lower incomes. I know a family of 8 who were recently in a 2br flat for years. There is a massive economic gulf between families in my dc Hackney primary school.

Childcare can be kind of sorted by one parent staying at home/working freelance until dc are at school.

Just to illustrate, our house was half the price of the house currently up for sale next door. We purchased it 6 years ago. Our mortgage is less than half the rental income of a similar size home.

I'd say a big difference from 10 years ago, is that middle class families would have educated their children around here privately, but this is less common now (generally speaking).

We have a much higher income than most people would guess I think. DH works in IT but his income is several times the average for his job title, so when people ask what he does for a living they assume he's on a lower salary than he actually is. Same with me - people assume that I'd get the average for what I do, but we don't talk about finances in detail so they don't know I get much more. On the surface we have typical jobs with a good/average salary, but our income is a good six figures.

We have both always been quite frugal as well - we don't run a car at all, and only have a small 2 bed flat, so we only have one dc. We do splash out on restaurants and holidays though because we love good food and visiting places overseas. Never done Disney but we have been on safari holidays which was totally worth it. I'm not interested in expensive clothes or makeup but I spend a lot on photography and other interests. I never buy coffees when I'm out though and always bring a packed lunch to work. We both came from quite humble backgrounds and I grew up in a council flat (which my parents were able to buy on a low income because they squirrelled money away). I'm not embarrassed to use coupons and things like Quidco despite having a high income.

We have a much higher income than most people would guess I think

We're similar but opposite, DH has a fancy sounding job title, people in ordinary jobs who bring home much more than him assume I'm a kept woman and work for fun because I'm married to a (insert DHs job title). We have a really low household income and have been disinherited by my parents who hinted that it's because they think DH will squander it (it's skipping us and going into trust funds for kids). They don't believe that we're actually GOOD with the money we have, we just don't bring much IN! I think the family rumour is that he gambles half it away or something otherwise how come we can't afford X,Y and Z LOL (good thing I don't give a F what they think!!!!)

People make all sorts of assumptions. Most neighbours would assume I don't work. I do wfh part time as a solicitor which pays well. Dh had a 2nd job for several years, again no one would know but paid well and funded nice hols inc annual trip to Florida. 2 lots of Friends have 2nd home they get rental income for from not selling when they bought. Know others only in 40s mortgage free - houses were cheap in small northern towns in 90s so people who bought early 20s are paid off.

Some of the people I know who seem incredibly comfortable have had lots of help from family members.

One had a detached house in a naice area bought in cash by Mum & Dad, Grandad. If you didn't know this you would wonder how they could possibly afford this, as they work part time, go on holidays and go out almost every weekend. Cars are also handed down from parents.

Some people are just very good at saving, I have a close relative that eats on a shoestring budget, has reduced their mortgage over the years by overpaying and uses the money they've saved to frequently travel.

Another I know constantly complains they can barely afford to live but in reality just socializes with people who are much wealthier and throw money around, it's relative.

Others will have debt, inheritance, terrible with money etc etc

The short amount of time I worked at the citizens advice bureau you see how shockingly bad some people are with money an fast it can snowball, it's also painted some bad images of certain companies! I want to cry when I remember people owing 10k upwards to places like littlewoods, next, very and argos (they seemed to be the main retail culprits, next on the list was dodgy credit card companies and places like brighthouse.) And it was rarely just the one people had a lot of debt with, it was a usually a combination of the above.