To think that people don't budget carefully enough these days?

[daffodilrosedaisy]

I've come across several people recently who are living hand to mouth, and struggling to afford things... BUT spend out on what I would consider unnecessary luxuries. Examples:

• Struggling to pay rent for a large family each month, ended up in huge debt to their landowners and got kicked out... but have newest iPhones, iPads for all the kids, big TV etc.

• Unable to pay for boiler and car to be fixed at the same time in winter, so had to take out a big loan to buy new ones of both, but go on two week holidays abroad, and again own high-end electronics.

I'm not referring to people that are never able to save, because their living costs equate to what they earn. I mean people who seem to get their priorities wrong and spend lots on 'luxuries' but don't budget for the basics like rent, and having a contingency fund for when things go wrong (broken boiler/car etc.).

AIBU in thinking this is ridiculous? Especially when people have families to care for?

To add I am usually broke in a Wednesday as I've bought stupid stuff for the house a takeaway treats for the DC.
Can anyone with good budgeting skills offer tips to help.

The only certainty is that most people pay tax & NI

There is no compulsory saving or spending

The only thing the Government has introduced is employee pensions & people can opt out

I've been a saver

I'm older now. I save some & spend some

I blame capitalism.

yes, wouldn't it be lovely if people started doing this, instead of blaming each other!

I used to be terrible with money, sat waiting for my money to come in the bank so I could spend it. Over the last couple of years I have totally changed, I have a budget & stick to it, I'm saving up to move house & I'm.determined that I will have everything I want for my new home when I get one. That doesn't mean that I go without treats, I'm disabled & nearly housebound, I pay for books to download, things to do, sky television, a music subscription, but I know that all my Bill's & rent are paid, I'm a couple of months in front with my rent & well in front with my utilities.

Finally, and my friend in Cambridge did this PHD thesis on this topic, it’s natural for people with very little to say fuck it and indulge themselves. Saving gets them nowhere. Trying harder gets them nowhere. So ‘fuck it, I have nothing so having minus nothing is the same thing’ so they go ahead and buy nice things on credit. Wealthy people don’t buy the massive tv or swanky car etc because they don’t NEED to in order to get pleasure from spending money

I have experienced this.

When I was young I got pleasure from saving- I was very good with money and forgoed holidays/ cars/clothes haircuts etc to buy a flat.

But years later when I was made redundant and was broke I actually spent more on ‘luxury’ items like holidays, socialising, presents for the dcs because I felt helpless and hopeless and spending was an escape from the scourge of unemployment.

Overspending is just another type of drug/ addiction that can be brought on by historical trauma. It’s a coping strategy. In this climate where millennials have less disposable income than boomers or gen x ers they are going to spend on frivolities as they can often never hope of buying a house or retiring.

They are also judged for how their life looks on social media the way previous generations weren’t. Holidays phones and haircuts look good on photos, fixed boilers don’t!

It drives me mad, I have a brother in law and cousins all in their 20's and I am the only one not in debt , the main problem with them all
Is that their necessity's are my luxuries .
Weekly nail appointment , lash appointments , monthly hair , expensive cars on finance and holidays that are all put on credit cards .

I think there have always been people prone to frittering away money but maybe nowadays it’s even easier to spend. One of my friends is the perfect example of this. He earns £80k plus but has debts and has never been able to save for a deposit for a flat or house. He just likes his lifestyle too much but his lifestyle has always been bigger than his earnings even though he’s a high earner.

I can comment on this from the other side of being tens of thousands in debt. You are right. And it takes a whole attitude and lifestyle shift to change. Now I go on a UK holiday every three years, spend £50 per child on Christmas. Adults don't get presents. Have a small allowance £10/week for non essentials. It mostly isn't spent.

And my savings are now into four figures. Something I would never have thought possible.

Same income. Same person. Change of spending and saving habits.

EmeraldShamrock pay all your bills by direct debit. Then take a set amount of cash out per week to cover your food, transport, etc. Anything that is left over put into a savings account. Once your weekly budget is spent you can dip into your savings account if you really want to, but do not use cards or borrow money.

A lass I work with was complaining she had £4.36 in her bank account 5 days before pay day. She told me this as she unwrapped a £12 pack of Marlboro Gold.

I actually agree in part.

I have a friend who always earned more than me but claimed that it was impossible to save for a house deposit. She'd got on x3 £3-£5k holidays per year and bought food from fortnum and mason.

Couldn't accept that I'd saved my deposit over a 10 year period with no parental help.

A lot of people don't want to make sacrifices or save money or just want an Instagram lifestyle

The worlds and our value system is screwed
It’s not only ‘poor’ people that waste money and consume shit ether

Rent /mortgage, bills and food first then everything else. Some people do it in reverse. There's also a confusion between want and need.

Whilst it appears bonkers there is a psychological theory, the theory of scarcity, that says those that are short of something, be it time or money often are so focused on that they lack the head space to make decisions that people with the space would. More here www.apa.org/monitor/2014/02/scarcity

I get you, OP. But it's really not any of our business.

A couple of years ago, I had some friends like that. They were a married couple, both teachers, with a toddler. They lived in a TINY terraced house, in a rough part of town.
Every time I visited, I'd wonder "why aren't you trying to get out of this?" They didn't seem to be obviously saving. I remember being really surprised seeing their fridge was always full of premium brand stuff.

But then, about 2 years ago, they moved into a really lovely house, in the next town along, and clearly had been saving the whole time. It just reminded me that we really don't know anyone's business.

While some people do indeed prioritise the wrong things and don't budget well you should try not to judge.

I have an extremely expensive king size bed, that bed was given to me free by my in laws who were changing theirs.

Same for my sofa, my expensive solid oak cabinet and my bookcase.

Our 'big' TV was bought second hand and cheap off Facebook marketplace.

Our garden has been completely re landscaped by us and filled with more than 60 mostly mature plants, it took us 4 years and all the plants were from morrisons or Aldi, almost all for a pound or two or from seeds.

If someone said of my family 'they should budget better, they are obviously frittering money away with things they don't need like that landscaped garden, mega expensive bed, solid oak furniture and that big TV I'd be really pissed off.

I sort of agree, but would remove "these days". There have always been people who behave like this.

Teaching in schools misses the point really. People aren't stupid, of course they know that choosing to buy the latest iPhone (or whatever) rather than paying the rent isn't a sensible decision. But sometimes what we feel we want to do is much more powerful than what we know we should do, for all sorts of complex reasons.

But do you all moan about others having money for things you decided not to spend on?
Do you do the "How lucky you are to xxx" while spending money on other things?
Os your rent being paid first?
Do you leaveleave someone out of pocket because you didn't budget for what you said you will do with them and let them go ahead and book it?

If answer to these is no, then you are not being judged. You just have different priorities and it has been well established that that's everyone's own business.
If answer is yes, then there is a problem we are all talking about.

@EmeraldShamrock work out roughly how much you think you need for important stuff - like food etc. That'll give you an idea how much you have spare for treats.

Consider putting the 'spare' money in a completely separate account (easy to set up additional accounts these days - we have a bunch for different things). Then only use that debit card for treats - the other is reserved for food etc. Or even take out cash start of the week and once thats gone, its gone until next week. Seeing the cash will help you when you go to buy a takeaway and realise 'well that'll only leave me £20 until Monday... Hmm'

On top of that I repeat my earlier suggestion of connecting an app to your account so you can more easily see what you're spending your money on (debit cards, contactless make it so easy to spend without realising)

@EmeraldShamrock you also mentioned things like broken applicances, children's birthdays etc.

Definitely recommend budgeting a little each month for predictable/semi predictable yearly/one off expenses.

Eg we add up estimates for how much car tax/car insurance/servicing etc will be, then divide that by 12 and put an amount away each month. Then they aren't nasty surprises as you have a little fund ready to go for them.

You can also extend to think maybe washing machine or similar might go pop or need repair every couple of years so put aside £10 per month for that kind of thing. If things go well, after 5 years if no need to repair you have enough saved up without realising to buy a new one when the time comes.

@EmeraldShamrock.
There are a few painless ways that you can save ( the old adage of look after the pennies and the pounds will look after themselves )
First thing is to have all your bills set up on direct debit or standing order to all come out on the same date. Coincide that date with your payday.
When all your debits have gone out, what you have left is yours.
Work out from that how much you will need for groceries, bus fares etc for the month.
Try to buy in bulk where possible, example, a large box of soap powder rather than a couple of smaller ones.
Put any change into a jar, the bigger the jar the better, cash this in at Xmas towards your Xmas food shop, it's surprising how it adds up.
Each time you go to the supermarket buy a couple of saving stamps, again it adds up for Xmas.
Your bank may have a penny scheme, this is an app that rounds sums up to the nearest unit, example on your debit card you spend say £9.95. the bank will round it up to £10 and put that 5p in your savings.
Shop around for energy/ insurance/ broadband etc, don't be afraid to switch supplier.
If you can, buy a small amount voucher for Argos or somewhere when you can, this can amount to quite an amount in a short while, again handy for Xmas, birthdays and broken smaller appliances. Maybe even a treat for yourself.
Putting a tenner a week aside in vouchers, saving stamps or in a jar is far more beneficial than spending it on a takeaway.
A takeaway is a treat. View it as such.
When your thinking of buying something, ask yourself..do I really need this?
Once you get into the habit, it will become a lot easier and your money will go further.

We need basic skills taught in school, instead of years wasted on German or the like that’ll never be used, teach budgeting, mortgages, council tax etc. We have young adults now who know nothing about coping alone, they’ve either had coddled childhoods or parents who don’t educate them. Even my DD14 says we should teach these things in schools.

We have young adults now who know nothing about coping alone

Of course, modern thinking is that they learn real life skills at Uni!!

Shame about the majority who don't go to Uni who are basically abandoned by the education system when it comes to real life skills.

Things like mobile phone contracts, credit cards, exchange rates would be perfect material for maths lessons.

Which is better - a £40 a month contract with a 'free' phone or one that is £20 a month but where you have to pay £200 for the phone?

How long will it take to pay a credit card off if you pay the minimum and the APR is 20% pa?

Which is best - changing your money into euros in the UK and getting 1.05 euro to the pound, or paying overseas and getting the bank rate of 1.1 euro to the pound, but there is a £2 transaction fee for a cash withdrawal and/or a 2.95% conversion fee etc etc.

The Moneysavingexpert website could provide endless material and I believe Martin Lewis did self fund a financial education book that was distributed to all schools.

I sort of agree, but would remove "these days". There have always been people who behave like this.

But in the old days before easy credit, people couldn't over-spend because they got paid in cash and paid their bills in cash, so the scope for getting into debt was greatly reduced. They had to actively apply for loans, or grovel for tick in shops/pubs etc which would be limited to small amounts, or borrow from friends/family, etc. Most things were bought using real cash, so the act of handing over the cash would also act as a "brake" or reality check when buying things they didn't really need.

"These days" they're bombarded with offers of credit - credit cards, automatic overdrafts, store cards, pay day loans, car leases, etc etc., so it's a lot easier just to spend and get deeper and deeper into debt. With them not actually seeing the "cash", it becomes an abstract concept.