To think living within your means has become the exception?

[SmokeyApo]

Hi all, I just wanted to share some observations and hear other people's inputs.

It seems to me that is becoming more and more rare for people to live within their means and try to save a little money for a rainy day. In my circles I know many people on good and even great salaries, that lead seemingly extremely expensive lifestyles and don't save a penny, or even go into debt to afford extravagant holidays or cars.

A good friend of mine is a senior executive in tech, makes an absolute fortune and had to ask around his friends (me included) to borrow money when he bought a house last year, because he couldn't cover the down payment. Another friend of mine got divorced last year, both spouses on really excellent wages, and it turned out that they had almost no assets to share after being married for 15 years because they had spent everything they got.

I am starting to wonder if I live in a bubble of financial irresponsibility or if this phenomenon is widespread. AIBU to think that saving and being mindful with money has become the exception rather than the rule?

We spend a lot. Only realised this last year exactly how much money we must have spent previously on holidays, food, shopping, nights out etc. With the money we've saved we've changed the carpets upstairs, replaced all our windows and doors and replaced the main bathroom!!

I don't worry about having much money saved for a rainy day as we don't have debt and have quite a bit of equity in our house, so could access that if needs be.

I agree OP, I'm not great at saving either - but I don't think in the modern day and age it's getting extreme.

I also think it's a lot to do with social media and advertising it's insane these days - the pressure to keep up with the latest crap is insane, but people should be strong enough to resist I agree.

I'm not sure, maybe depends on personality type / how risk adverse people are / how influenced by social media etc.

I'd say of friends I'm close enough to know these things, are a fairly equal split between those that live within their means and those that don't. Even within my immediate family there are very different approaches.

I don't think people do anymore.
When we were first married end of the 80s we were on the bones of our bums financially with second hand furniture and about 5p left at the end of the month. We had nothing much.
When I see newly weds now they seem to have it all straight away! I guess expectations are higher these days and I did get some funny looks about our second hand sofa, but I wasn't prepared for more any debt until I could afford a new one. Already had enough to pay out for!
There is a lot more ' keeping up with the Joneses' going on I suppose now?

I was brought up to live within means and put up with crap stuff till you have cash to get what you want, but agree that seems old fashioned now. People get 'credit' thrust at them everywhere now; notice how it used to be called 'debt'. Funny that?!

Many consumer goods are a fraction of the price compared to salary that they used to be.
When I was a kid in the 80's everything cost more and the supermarket didn't sell electrical items etc.
So people went without and saved.
I guess now people are used to higher standards of living too.

I agree - young people seem to want everything immediately- I have a 25 year old friend she has had the massive wedding and the baby now it's the 4 bedroom immaculate house with double garage, plus foreign holidays, plus meals out and numerous weekends away. Everything is based on stretching themselves and huge loans that end up being stressful, every aspect of her life planned out for the next 20 years . I just couldn't live like that .We are 50+ and still striving for the immaculate house which will most likely never happen.

I think very few people realise the importance of a rainy day fund. Even a previous poster mentions not saving because they have equity in their house. How will that help them in the short term? You’ll still need somewhere to live.
I’m very conscious of having savings to cover most eventualities. I don’t feel the need to keep up with the Jones. Lots of people do. Which is good for the economy.

Lots more "credit" available now for everything from clothes to cars and furniture, that I think it's become much more acceptable to buy in that way.

I have an acquaintance who lives the high life. Weekends away, no expensive spared on eating out regularly, expensive cars etc. They were worried about how to buy food when covid struck and their business was temporarily closed. I found it difficult to be sympathetic tbh.

@the80sweregreat

I don't think people do anymore. When we were first married end of the 80s we were on the bones of our bums financially with second hand furniture and about 5p left at the end of the month. We had nothing much. When I see newly weds now they seem to have it all straight away! I guess expectations are higher these days and I did get some funny looks about our second hand sofa, but I wasn't prepared for more any debt until I could afford a new one. Already had enough to pay out for! There is a lot more ' keeping up with the Joneses' going on I suppose now?

Do you not think that's more to do with the fact that people now get married much later in life, buy houses much later in life, and will often have lived together for a number of years before doing either of the former?

The reality is wage growth has not kept up with the growth in cost of living. We know this, you should know this if you've read any news in the last ten years. People aren't living without their means, they're just trying madly to live.

I earn a good wage and I'm lucky enough to save a lot of money each month. It will still be years before I can hope to have enough to buy my own house. I am 31!

Different expectations.

Older people are more used to saving up for things and making them last. Social media, advertising et al, tells you that you can have it all and that it’s not expected to last long.

The standard of ,icing is higher too, despite people saying they can’t afford to buy a house, simply because there are more things available to buy that are expected now. It’s unusual if you don’t have a smart phone, computer of some sort, new furniture, appliances of all sorts.

@EssentialHummus

Lots more "credit" available now for everything from clothes to cars and furniture, that I think it's become much more acceptable to buy in that way.

Or necessary...

We're savers and so are most of our mates. Some on massive salaries though, which helps!

There is more credit now and very little incentive to save - interest rates are so low.

I think most people I know personally apart from a few family members and me live this way.

I am constantly shocked that my friends on massive salaries have to spread the payments of a new boiler or buy 'middle of the road' cars on finance rather than buying them outright or even 2nd hand. Many of my friends are building extensions and renovating already lovely bathrooms with remortgages when they can barely afford to buy new clothes for their kids!

I think everyone should live how they want and I don't judge but I would feel constantly miserable living month to month with big repayments every month.

Maybe having been very poor in the past and getting into financial difficulty my view is different but now I save, I buy everything outright - never on credit, and my spare cash goes in overpaying the mortgage. It reduces my anxiety about what to do if I lose my job/income. I also have much nicer things than many of my friends because I don't have to make huge debt repayments every month. Most of my income is disposable.

@ConsuelaHammock

I think very few people realise the importance of a rainy day fund. Even a previous poster mentions not saving because they have equity in their house. How will that help them in the short term? You’ll still need somewhere to live. I’m very conscious of having savings to cover most eventualities. I don’t feel the need to keep up with the Jones. Lots of people do. Which is good for the economy.

I see this all the time in my job. people tie up all their money in second homes to rent out then they get ill, can't work, can't get benefits as they have too much capital but all tied up in property and find themselves in a very difficult situation.

Unfortunately that is the way the UK economy is geared these days. Debt and credit. Some people are able to distinguish between getting credit and spending it wisely (paying off cards in full at the end of the month) others are not.
In addition, there are virtually no attractive savings vehicles as interest rates are so low making it easier to "sell" credit.
Furthermore there is the culture of "instant gratification" rife amongst various sectors of the population, which does not encourage saving for anything. People seem to want it all, now and don't appear to address the fact that money borrowed will, at some point, need to be repaid.

I couldn't sleep at night if I was in debt or up to my neck in credit. My father was dreadful
with money. So the stress and worry as a child forced me to avoid any iota of being like him. I wouldn't say I am wealthy. Definitely not. But I manage on my income, and save as well.

YANBU. Debt is crazy these days. Car leases, gym memberships, food deliveries, big holidays, crazy mortgages.

Instant gratification is a major problem these days. As is being seen to have money, even when you dont. I blame the likes of TOWIE etc. It's a bad example on young people.

We've got considerable savings. Because I buy secondhand. We have small (but enjoyable) holidays and only buy things when we have the money in the bank. We have never had debt even though we are on modest incomes.

The amount of debt people have these days is unsustainable.

I admit that buying a place was easier for us, we only had two normal wages coming in back then and had to move away from our parents etc, but we just about managed it!
My sons can't afford to buy anything :( not where we live anyway.
Things such as home buying hasn't changed for the better at all . It was still a struggle for us but we could do it on a budget. Today's young have it much harder still :(
I know this thread isn't about this btw!

I think people are one thing or the other, there's not much middle ground. I've never borrowed for anything except a small mortgage that was repaid early.

I'm financially secure and I'm not bothered about foreign holidays and fancy cars but maybe I've missed out.

I agree OP, I’m always shocked by how little some have in savings as it’s not seen as priority, the amount of credit people have or the top ups from the state that allow people to make choices outside their means.

@BooomShakeTheRoom

YANBU. Debt is crazy these days. Car leases, gym memberships, food deliveries, big holidays, crazy mortgages.

Instant gratification is a major problem these days. As is being seen to have money, even when you dont. I blame the likes of TOWIE etc. It's a bad example on young people.

We've got considerable savings. Because I buy secondhand. We have small (but enjoyable) holidays and only buy things when we have the money in the bank. We have never had debt even though we are on modest incomes.

The amount of debt people have these days is unsustainable.

Is it a function of greed and recklessness or is it a function of the fact that wages have stagnated whilst the costs of houses, public transport, utilities, cars etc have risen at rates orders of magnitude faster?

I think it depends on The person I'm in my late 30's and I have never had a debt or a credit card. We save for everything and we lived abroad for years and bought our first (very small house) outright and then worked our way up from there. I understand I'm very lucky, but I am of the kind that if I can't afford it, it doesn't happen. I have ALWAYS had an emergency fund too....I think that is THE most important thing to have as it stops you from relying on credit/debt