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?

You're right Kazzy, they could - but I'm still not sure how much difference a brief lesson would make, compared to the weight of experience at home?

Why would it only be a "brief" lesson? Why not make it a proper module/section of it's own? There's all kinds of "real life" maths, such as the real costs of borrowing, comparing different methods of purchase, tax and wages, savings/pensions, etc. Many aspects are already part of the curriculum, but just not "packaged" as real life maths. I'm sure a lot of disengaged kids would suddenly start showing an interest if the maths they were being taught was made more relevant.

Depends how new the stuff is. Maybe it was second hand, maybe it was from a small inheritance or win.

I know someone who lost their house last year due to unpaid rent, then got a massive settlement from an employer for redundency but preceeded to blow through it going on holiday, rather than pay back the loans over their head

I'm not sure that's anything new, though. It's many years since I worked in mortgage arrears, but even back then we'd constantly be told the debt would be cleared "when such-and-such comes through", only to find that it had all gone on some frippery

Sadly the feckless have always been with us and probably always will - it's just that today's better communications make them much more visible

I agree OP, and it is my business when as a teacher I’m picking up the problems caused by parents who can’t prioritise their children’s needs against their wants. Like a waterproof coat, uniform that fits, decent food and shoes...stuff teaching children to budget, let’s target adults pre-children and make them attend classes before they take on additional responsibilities. I have no problem with people frittering away their cash if they have no dependents.

I dislike the “these days” element.

You think when people were paid cash at the end of the day working on the docks, and there really weren’t that many luxury consumables to buy, let alone credit to buy them with, that there weren’t people who had to give half that day’s pay away immediately to the people they owed? Including perhaps the pub where they’d had a luxury item (beer) on tick?

I don’t know if people these days are worse. I think that there is more to buy, more expensive things to buy, more pressure to keep, more credit to get into trouble with.

But fundamentally are people worse these days? I don’t know.

I would never think that it has to be taught to pay your rent and bills first and then have fun with a rest. No one ever taught me to budget. It's common sense

Very true. I was never taught either, but it's basic maths. If you have £10 and spend £15, you've overspent. It's not difficult.

Do people not use direct debits or standing orders to pay bills? I have everything on those for the beginning if the month after I'm paid. Then I know how much I have left.

If you can't have them, make a spreadsheet in excel. Very simple, can have formulas to total everything up and you can see where you can reduce. I do both.

It's rarely about lack of budget skills, it's about people who choose pleasure and comfort over being responsible. It's about feeling entitled to things others have.

It's no fun spending money on essentials. It doesn't make you feel good. Getting a new I phone and thinking others are envious make many people feel special.

@Ellisandra Yes I think I perhaps worded it incorrectly - what a PP said about how Facebook etc. means it's always shoved in your face probably makes it seem more prevalent in general.

DB always has nice new clothes on £100 trainers but ask's to borrow money when something breaks! People don't know how to save and they seem to never learn either

@KetoWithIF Good for you! I'm in old trackies and a Christmas sweater, I feel the cold easily

Why would it only be a "brief" lesson? Why not make it a proper module/section of it's own?

Maybe because there's so much else to be fitted in, without taking on a responsibility which properly lies elsewhere? We already have schools which are like a branch of Social Services rather than a place of education, and too many parents who brush off too much as "the school's job" without encouraging more

I do agree about the value of more "real life" maths, though ...

OP I totally get you & I agree. I think among some older generations there was a rationing/make do & mend mentality of almost competitive frugality, it was the norm to avoid spending money.

Nowadays I get judged by friends because I drive an old car rather than a new expensive marque on a finance plan, because I budget carefully & save. I then have no sympathy when friends with 6 figure incomes say they can afford to save (while spending huge amounts getting eyebrows & nails done every 2 weeks, driving brand new audi, eating out all the time etc).

Credit cards /loans /contracts are to blame.
If people had to buy phones with cash, very few could get a new iphone.

I’m not convinced though that budgeting can be “taught”. It is to my eternal shame that my young adult son is useless with money. An absolute disaster. Payday loans, CCJs, the works. He’s been brought up to budget, that you can’t have anything you can’t pay for, that you save up for stuff, that you make do with cheaper stuff, that you look for bargains, you pay bills and fulfil financial responsibilities before having fun. He has good examples in his dad and I, his grandparents and extended family. His sister earns half what he does, yet budgets and saves, and spends within her means to have nice things. I’ve literally tried everything with him and nothing worked. I just think some people are hard wired to spend spend spend.

Wages at the lower end haven’t kept up with the cost of living. However, we have always been able to budget well despite both of us on low incomes. I’m a little bit obsessed but have kept spreadsheets for years taking into account every penny we spend to ensure we are not wasting anything. When we bought our first home our budget was so tight I went without nights out, new clothes, makeup and getting my hair cut to get us through the first few months. My DH cut right back too. Once our mortgage payments started to fall and our income increased we started adding more things back in to our budget and now we have a bigger house, a newish car, Sky, holidays etc because we have taken out all of the unnecessary spending. If we want something new, we cut back elsewhere.

I see friends who have prioritised all the luxury items from the start and as a result have no left over income. They say they will never be able to own their own home.

I feel like budgeting is a skill that some people are naturally good at and some not. Some of my friends are naturally better at eating well and exercising regularly and I am envious of them. They would probably tell me how easy it is given the chance so I don’t judge too hard.

Very true. I was never taught either, but it's basic maths. If you have £10 and spend £15, you've overspent.

Far easier in the past when "money" meant physical notes and coins. You literally couldn't spend what you didn't have. Yes, you could get loans, but that meant physically going to ask for one, which forced "thinking time" and was a bit of inconvenience. It was common for people to put money, literally, in pots/envelopes on pay day, for things like the gas bill, milkman, christmas, food, rates, etc., and they then knew what they had leftover, if anything.

Now because most of us never actually see the physicality of our wage, money is becoming some kind of abstract idea rather than reality, enforced by easy credit, automatic increases in overdrafts and credit card limits, etc.

Of course, in theory, everyone one of us having a computer in our hand (i phone) should make budgeting and money control far easier than ever, but far too many of us choose to spend our time taking selfies and liking pictures of cats than take control of our finances using apps etc.

I think that some people have the mentality that 'afford' means that they spend close to 100% of their income a month, and that they don't allow anything much for any change in circumstances, planned or unplanned.

My mentality is that I can only afford to start thinking about any sort of extra once my living and subsistence costs are covered, AND savings for emergencies, future goals and pension.

The mere idea of spunking money on a lease car or a phone contract before covering these things is inconceivable to me, and it's so much of a habit that I wouldn't do it even though I can afford it.

Even though my income is now high, I semi-regularly go on 'spending diets' to keep my expenditure to an absolute minimum.

The thing is though, that these are 'rich person' habits. It's easier to delay gratification when gratification is inevitable anyway. But here's the kicker - having rich person habits, also makes you richer! If I lost my income tomorrow, I already benefit from a mentality that keeps me safer than someone who habitually doesn't have enough. It's a nasty cycle.

YABU. Nowadays its' essential to have something with access to the internet (and smartphone's probably easiest) for job applications, benefits, and generally keeping up with friends and family (which is very important for mental wellbeing), and for entertainment.

And for people who get a 'free' phone with their phone bill scheme, they get updated regularly. Or you can find plenty of fairly recent phones for sale online, so it needn't be new. It could be a present from a relative. We were given our tv by a member of our family, and another one always gives me their old phone as they upgrade.

Comparing something that's £10-20 per month with rent on a large home is ridiculous. You could live phoneless and struggle to fit all your communications into a half hour free library slot on the computers, and still have nothing like enough money to put towards rent, which can be extortionate - far more than a mortgage payment each month.

Don't judge. Being poor means having to manage money extremely well, and those who are poorest often have extraordinary budgeting skills, because they have to. But sometimes everything is stacked against them, and who's to deny someone being able to contact people and get online if they're financially struggling? That can be a lifeline.

I 100% agree that budgeting should be taught in Schools.

My siblings and I have widely different attitudes to money. I'm perceived as the 'rich one' even though we are in the same, just above minimum, wage bracket. I have a type A personality with a touch of OCD, so I track where every penny is going, I'd rather save rather than get it on credit, and if I absolutely have to I would only get a loan from our local Credit Union.

One sibling got into ££££'s of debt with loan sharks, I happily paid it off and in exchange they let me do their finances until the debt was paid back. This included me having sole access to there bank card, sitting them down each week with a spreadsheet and showing them exactly how to track where each penny is going, it wasn't totally miserable, I did allocate spending money each week. It took awhile for it to sink for them the difference between a necessity (TV with free-view) or a luxury (Sky TV with full HD Sport and Movie Packages). After 8 months they had the debt paid off and a significant amount in savings as well. They've continued with the paying of the bills first but are just spending whats left immediately over instead of putting even a little bit in a savings account. TBF I'm just overjoyed they're managing enough not to have to go to loan sharks again.

The other sibling is just totally laid back, as a PP mentioned she'll get taxi's everywhere and take away's she doesn't mind spending money if it makes her life easier.

They're my siblings and I don't judge, they're not hurting anyone but as OP said its annoying to hear them complain about being skint and the sly digs at me 'for having money' when better budgeting would do them a bit of good, but they just where never shown how.

I think that the concept of 'saving' to buy something has been completely lost - now people have to have what they want instantly Because of this, the pride in saving and finally being able to buy has gone, and along with it, the principle of keeping things in a good condition so they last. Nowadays, something breaks, you throw it away and buy a new one!

There are people who can't budget, there are people who won't budget. There are people who do budget but still need loans. There are people whose financial priorities are totally different to yours. Etc.

I work with one such person. Moans about paying off the credit card after Christmas, moans he could never afford a house and has no savings. He and his wife both drive brand new cars (a Mini and an Audi) on PCP, there is a constant stream of clothes parcels delivered to the office and they went to Disney in Florida last year and this year are going to Thailand. Earlier this year he tried to persuade a single mum we work with (who I know earns at least ~£10k less than him) to take his kids for part of the summer as they 'couldn't afford' summer activity club fees.

I have no problem with people spending their money how they want, but why they don't see that they can afford things, they just choose other things!!

Blimey. Basic budgeting really is not rocket science, and I'm sure there will be apps available to use on those oh so expensive phones to do most of this for you. Why should the careful bail out the feckless? (Again, not talking about folk in real poverty here.) #adulting