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?

It’s an impulse control thing though. People with poor impulse control wreck their lives in all sorts of ways: they get into drugs and crime, they have sex without contraception, they gamble and they spend money they don’t have. The need for the buzz just overrides common sense.

I’m not sure if it’s curable; one of mine has tendencies this way. We have taught her to be very self aware of it and to get her thrills in healthier ways (exercise and dancing work well for her).

Budgeting wise we sat down and planned it out. She has direct debits and savings that go out as soon as she is paid. The rest is for squandering. The savings amount was calculated to cover a holiday, Christmas, car maintenance and anything else we could think of. It seems to be working; she’s enjoying watching her savings grow and often not even spending all her squandering money.

Ah yes, the "you're so lucky to have a house deposit". It didn't just fall on me - I saved for 4 years. I rent a small flat, drive an old banger we got for free, have a TV we got for free (with no license), don't buy coffees out, don't really drink alcohol, don't buy new clothes or any makeup, furniture all from charity shop or family members that didn't need theirs anymore, haircuts and days out from Groupon.

The people who express shock are my mates from London who earn more than I do, but choose to live the "London life" and go to cocktail bars every nights & have £100p/m gym memberships. Consequently have no savings and wail about having to choose between a bender or saving for a holiday to Bali.

I think I'm hardwired that way though, I get a lot of satisfaction from getting something cheap/free and feel guilty for buying things. I was a cheapskate way before we did any Excel budgeting in PSHE. I would much rather have savings - it means you can quit your job if you don't like it, and not worry about being homeless. Whereas "things" just gather dust, go out of fashion and end up in landfill. Savings to me mean:

a) able to re-train in future
b) house
c) able to have career breaks/pay off mortgage/retire earlier, or just to be able to work p/t in a coffee shop and spend more time on hobbies

@duffeldaisy easily done over £70 a month😮
I wouldn't pay that.
And if you lower months it gets even more ridiculous.
Friend probably went with EE. They are absolutely mind boggling with prices
shop.ee.co.uk/mobile-phones/pay-monthly/iphone-xs-512gb-gold/details#choosePlanAnchor

@Labrodite I use Klarna a lot for stuff I need to try on because I only pay for the stuff I keep which works better than paying say £100 and then waiting for a refund of £75, I just pay the £25 for whatever i keep that fits

Should add it's not an instalment one, it's buy now and pay in 30 days in full

I use Klarna to manage my online spending more effectively too. I use credit cards in the same way and as a result I have a great credit score and actually earn financial rewards from my credit card which I never pay interest on. Thing is the people who use these things like that are basically being subsidised by the people who don't or can't avoid debt and interest, or these products wouldn't exist.

YANBU. I know of a parent who is consisntently late paying her children's school lunch money's, to the point that the school had to put their foot down and threatened to give them nothing for lunch. Yet she could reguarly afford acryllic nails, sunbeds, tattooed eyebrows, teeth whitening etc. Indeed she would boast about it on FB!

Thats not just poor budgeting, its blatant lack of priorities! And yes, I will judge her very bloody harshly! Its pretty disgraceful to put looking good over your own children's needs!

Yes, my niece is like this. She has a barely more than minimum wage job, still lives at home with her parents. Constantly moaning about how she can't afford to learn to drive, can't save for a deposit on a flat etc.

Has just bought a £325 pair of trainers.

@YesQueen I’ve looked into Klarna a bit more after reading your comment. The ‘pay after 30 days’ option you mention does seem like a good idea when you’re buying clothes to try on and that’s something I’d consider using! The three part instalment option makes me quite uncomfortable, on the other hand.

It means you can quit your job if you don't like it This is a big reason I like to have savings. I dislike my current job and it’s a comfort to me that if it got much worse then I’d be able to quit without having another job immediately in place.

@Labrodite it's great for that. I can order loads of sizes and try, post whatever back and then it refunds and gives me a reminder and update when to pay
I don't always have say £500 to order a lot of different size clothes but if there's free delivery it's even better!

It's not about budgeting though. Agree with pp, working our arses off in decent jobs, we don't want to live like paupers! It's nice to have nice things and eat out sometimes etc. Holiday to look forward to. Or else life would be even more miserable and boring. Yuck.

My best friend has multiple loans out that she is struggling to repay, I've listened to her woes and tears about being on final notices and not being able to clothe / feed her kids. I've helped out when I could.

However, once she found out we had saved a 10% deposit for a 100k house (by no means a mansion) she asked me to loan her the money for a down payment for a second family car and also co sign on the loan as she couldn't get the car on her own.

When I refused she fell out with me because the money (yes my money) is supposed to be spent, not just sit in a bank. I didn't even have a car myself at that point, never mind paying for her to have two!

I'm glad I had the gumption to say no because she lumbered the person who did co-sign with it and then got someone else to co-sign for a 'better' car a few months later.

I think this could be summed up to skewed priorities rather than bad budgeting.

I get you OP.
I have a sister-in-law like your friend. She has a kind of 'spend now, worry later ' mentality.
She is married to a man who has the same mentality unfortunately. They live on credit cards, when they get paid ( they both work ) all their wages go on paying the credit card off, to live on it again the following month.
They both smoke and drink, if they can't go out on a saturday night for a meal and a club afterwards, complete with a taxi there and back, it's like the end of the world.
Back in the day of catalogues...anyone remember them? She was forever ordering stuff on the pay weekly with them, piles of shit that she didn't need. Xmas would come round and bloody hell, the stuff she would buy, she would still be paying it off the following xmas!
I bumped into her recently in a local filling station where she was buying some cigarettes. I almost fell over when the assistant said £11.50 please for the cigs!! No wonder she's bloody skint.
They are always moaning about being skint and asking for loans, which i ignore.
I budget and luckily my husband budgets too. Neither of us smoke, i rarely drink and we think about what we spend on things before we spend it.
With me its a case of need over want, rather than want over need.
I don't need a tv package costing god knows how much, so i don't have one.
I don't need an expensive phone contract, so i don't have one. A fiver a month on my bog standard pebble phone is enough for me.
What i do need is to be able to sleep at night knowing that my bills are paid, there is going to be no demands coming through my letter box or people banging on my door.
If someone is genuinely having a hard time financially through no fault of their own, then i have every sympathy and i will help out where i can, even if it's only putting together a bag of groceries from my cupboards to get them through the week.
Sometimes life can shit on people, but a lot of them simply don't help themselves.

@IAmALazyArse

Phone these days is close to essential. Some data too. My son is on a £7 pm sim only with talk mobile - 5GB a month. Seems plenty for almost any situation that isn't watching movies on the train (which is not essential)

anything more than that is about the phone itself. So thats where you cut your cloth to fit. XS 512GB? Lovely. Oh can't afford it. OK I'll get a used X for £450 or even just stick with what I've got for another year (honestly for iphones as long as it can run the latest ios it should be fine - 6s/SE is the cut off for ios 13 so anything like that or newer doesn't need to be updated as much as someone might want to update it)

btw apoligies if quoting out of context, difficult to tell sometimes on here.

How do you budget when everything is paid for by credit card and you cannot use cash.

You are right but it’s hard for me to blame people. Partly because I am privileged (happy solid home, good education, great job and now husband with great job too) and know that many many people did not get the same start. Also because I believe that people are misled and brainwashed by lifestyle messages, advertising and social media these days. And finally I believe some of the fault lies with banks and financial institutions taking advantage of vulnerable people by offering them credit the can’t afford and also selling them the dream they see everyday in afore mentioned advertising etc.

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.

So I’m not sure I can blame people for what is clearly a very very bad idea.

@darkcloudsandsunnyskies you might have to expand on that

In have a friend like this, constantly complaining about being broke despite family income greater than any of our friendship group. Chose to have 4 kids. Chooses not to work. Just bought a big house on a posh road so large mortgage. Project house so needs lots doing on it. 2 holidays so far this year. Enjoys posh expensive food and online subscriptions to things.

Yes money is tight but it’s because they spend it not because they don’t have it 🙄

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.

I heard that. Highest spends on purchases like beauty salons are in the most deprived areas apparently.

It's not about budgeting though. Agree with pp, working our arses off in decent jobs, we don't want to live like paupers! It's nice to have nice things and eat out sometimes etc. Holiday to look forward to. Or else life would be even more miserable and boring. Yuck.

So if you want it you should have it, even if you can’t afford it? Grow the fuck up. The world doesn’t owe you a living. Your sense of entitlement is shocking.

@TerrorYakSores great post. Food for thought.

I know what my budget should be from past spending habits and my bills.

We used to pay bills by standing order and take out a set amount of cash for everything else.

Now the cash has gone and we have to use credit cards which induces you to overspend.

How do I restrict my spending on the credit card. Do I have to write everything down as I spend it. It seems redious.