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?

People can keep saying 'it all adds up' on savings, but most people on here are middle aged, probably got a 100% mortgage or close to it on a very cheap house that gained value very quickly.

How about we scrap everything you currently have, your house, your savings etc, start from scratch. Buy a house from your wage currently while renting as quickly as you can, don't forget all bills etc. How long will it take you? Figure that one out.

It's way more difficult now than it ever was. The older generation have forgotten how easy it was for them.

@shrodingersbiscuit

I get that the OP meant people on high wages who don't save, but within a few posts this conversation degraded to discussing the 'feckless poor' - a Dickensian fallacy. It's more that I was addressing via the comment that people should just move somewhere cheaper.

Poor people aren't feckless. They are poor because of capitalism, and privilege. People are poor because they don't have enough money to make choices like the rich can - choices are what allows people to drag themselves out of poverty.

People aren't poor because they spend all their money trying to emulate The Kardashians (who, although morally corrupt, are savvy businesswomen). No one has to have their kids on FSM because they spent all their money on weight loss lollipops and handbags to look like Kim K. Seriously, just think about it! It's a lie told to us by rich people to stop us questioning why 1% of the population is hoarding 99% of global wealth. And to stop us realising that until we address that - we aren't doing anything but prop that system up.

People coming on here saying well I bought a cheap house in the 80s, you should rent somewhere cheaper to save money and I know people who didn't buy lunches so they could save up are just missing the point. Inflation renders comparison to previous generations useless. You can't always move somewhere cheaper. Saving 3 quid a day on a meal deal isn't going to pay for your kids to go to University because by 2028 uni tuition is projected to be 30k a year, or buy a house when they're rising 10k a year. If the interest on savings doesn't match inflation it seems pointless - money you could spend on your life now, it's not going to be worth enough in the future. It isn't going to give you choices.

It's really fucking depressing.

Well quite.

It's much easier to disconnect yourself from people who have low incomes and say it's their own fault, that they brought it on themselves, than realise that you're part of a society that actively encourages low incomes for some jobs, because then it keeps the cost of those services low, services that society relies on to function, and then within a short while actually resent those people for the support they need due to that low wage, like in work benefits, social housing and free nhs care across the board.

Supporting people on low incomes by providing support through benefits and other support through taxation, is probably cheaper than increasing prices in these sectors to cover a wage that you can actually live on, and not just live, but have a life, because why on earth should someone work 40 hours a week, and have nothing but the basic standard of living? I'm not talking about trips to Barbados twice a year, I mean enough to cover essential expenses like a roof over your head and fuel to heat it, clothes to wear and food to eat, and a little more besides for something to make it all worth while, or what's the point? There's not much point being alive to just improve other people's bank accounts while you have nothing at all enjoyable for yourself. And then you're told you should be grateful for it to boot.

It's cognitive dissonance, because admitting the above means admitting you're a part of it, admitting you use and rely on those services, admitting that you have a hand in it, and then that may create feelings of guilt, of fairness, which would have a negative impact. Far easier to think that it's down to lack of inspiration, lack of hard work and greed on behalf of the people living thst way and absolve yourself of any part in it at all.
Not that those people can change it by themselves, As the poorer people can't either, but collectively it could happen, though that would mean higher prices, higher wages and people having a more equal share of money, and that means less disposable income for some, so there's very little incentive for it to even be a thought.

I save. My parents saved. We've been a single income family for 3 years as I've been a sahm. We could get by on that. We don't have expensive holidays, cars. We were lucky to be gifted with a deposit for the house though.

Add a £2 coffee to that and it's £1825

It's still 30 years of that to save for a house deposit.

@ClarkeGriffin

People can keep saying 'it all adds up' on savings, but most people on here are middle aged, probably got a 100% mortgage or close to it on a very cheap house that gained value very quickly.

How about we scrap everything you currently have, your house, your savings etc, start from scratch. Buy a house from your wage currently while renting as quickly as you can, don't forget all bills etc. How long will it take you? Figure that one out.

It's way more difficult now than it ever was. The older generation have forgotten how easy it was for them.

I'm early 30's, I don't think you can exactly call me the older generation. I did exactly that in my 20's, rented and saved up for a house deposit. It took a while, but I cut out a lot and it did add up. I went without holidays abroad, PCP cars, takeaways. I didn't have netflix or other subscriptions, no phone contracts and made my lunches. I saved everything I could. Over 6 years it added up enough to give me a decent house deposit. Now, 5 years later, I can afford all those things and have decent savings.

@Graciebobcat

Add a £2 coffee to that and it's £1825

It's still 30 years of that to save for a house deposit.

I wasn't suggesting a whole house deposit could be saved just by cutting out lunch and coffee. But if it was cut out for 5 years it would be over £9000 which would be a big chunk of one. Add to that savings from cutting out other non essential things such as holidays, Netflix, phone contracts etc as well as general savings and there's your house deposit.

I'm early 30's, I don't think you can exactly call me the older generation. I did exactly that in my 20's, rented and saved up for a house deposit. It took a while, but I cut out a lot and it did add up. I went without holidays abroad, PCP cars, takeaways. I didn't have netflix or other subscriptions, no phone contracts and made my lunches. I saved everything I could. Over 6 years it added up enough to give me a decent house deposit. Now, 5 years later, I can afford all those things and have decent savings.

Add in children, childcare etc could you have done it then? Dunno what your house prices were like back then either, but in this area house prices are just mad. My house has gone up £13,000 in a year and its nothing special. 10 years ago when I was in my 30s it was 50k less than it was now roughly. So by the time I'd have saved a deposit, it would have been useless as the price increased too quickly.

Arguably, the 'saving' three quid a day in case something breaks down or for new kids shoes isn't really saving as such - it's budgeting. It's knowing that while I have an extra 50 quid this month I might need it next month. That's not really 'saving' I think.

You know, you’re absolutely right @shrodingersbiscuit. That’s what I was trying to say with actually realising it.

I also agree that the landscape has changed completely. I’m getting close to 50 and back in the 90s I practically lived in cafés as a student. It wasn’t that expensive. It is now!

@ClarkeGriffin

I'm early 30's, I don't think you can exactly call me the older generation. I did exactly that in my 20's, rented and saved up for a house deposit. It took a while, but I cut out a lot and it did add up. I went without holidays abroad, PCP cars, takeaways. I didn't have netflix or other subscriptions, no phone contracts and made my lunches. I saved everything I could. Over 6 years it added up enough to give me a decent house deposit. Now, 5 years later, I can afford all those things and have decent savings.

Add in children, childcare etc could you have done it then? Dunno what your house prices were like back then either, but in this area house prices are just mad. My house has gone up £13,000 in a year and its nothing special. 10 years ago when I was in my 30s it was 50k less than it was now roughly. So by the time I'd have saved a deposit, it would have been useless as the price increased too quickly.

No, I purposefully waited until after I had bought a house to have children. I'm in the south east, house prices are high here and have been for a while. I bought my first house at a high, they actually haven't gone up much since then. As I said it was only 5 years ago since I first bought so I was in the same position first time buyers are in now. It's possible.

I agree OP.
It’s not about weather you have a small/large salary either. You cut your cloth accordingly...

I’m all for spending and a treat but I wouldn’t spend £500 on a handbag if that was the only £500 in my savings account. It makes no sense at all.

I agree with social media plays a big part it’s like we need to live with the Jones!

As a lot of posters have said, this isn't really about morals (or a lack of them), and turning it into a moral issue is a bit silly. People are people (across generations) and respond to the circumstances and incentives around them.

So many issues are at play, but housing is a particular problem in the UK. We simply need much more housing stock. This would normally be solved by a free market with ease (house prices go up, profits for builders go up, new entrants come into the market and build more houses, seeking those profits, more supply, house prices go down).

But we artificially constrain the supply with our very tight regulations on where we can build and how we can build.

It is really as simple as that. We prevent the market from building the supply that would meet the demand, instead we subsidise the demand in various ways (loose credit conditions, help to buy schemes).Then we pile immigration and more single-adult households on top.

Of course house prices are fucked.

We ought to be screaming for building regulations to be loosened. But no one wants that either. Everyone wants a rabbit-from-a-hat solution or a pretend one like rent controls.

I save every month and definitely consider myself fortunate to have 'spare' once bills,
Mortgage and food has come in.

One of the ways I personally find this easy is that I haven't necessarily changed my lifestyle much since my first job. So I like to have a takeaway once a fortnight, a week in Europe once a year is a treat and my clothes are high street (or second hand as I'm trying to be more eco) My car is old and my social life consists of a few wines in the local pub when I can score a baby sitter.

So every time I've stepped up in my career the excess money I've made that I wasn't relying on before has found its way into savings most months.

[quote shrodingersbiscuit]**@Overthebow* Me too, but we are privileged to be able to do that. I could cut subscriptions, I had other entertainment. I could rent in cheap as possible places, because I was single and didn't have kids. I had a phone (a phone is a necessity not a luxury) which I owned so I had a cheap subscription. I still make my packed lunch every day! But we must recognise that we are privileged* to have been able to do this and not judge those who are not as just useless or stupid. I'm not saying it's not still an achievement on our part but it's not 100% grit from me and I doubt it is from many.

Even if you saved 20k over 5 years it's barely a deposit on an average house PLUS houses rise in price over that time, possibly by as much as 50k in some places. So the hard saving for 5 years has got you nowhere and you've had a miserable fucking time AND you're being told it's your fault for not being disciplined enough.

It's grim. Grim grim grim.[/quote]
I'm comparing to normal average people similar to me though. I do know that some is down to privilege, and I was lucky to get a decent job early on which helped. I don't agree though that everything you said above is down to that. It's the choices we make, I chose not to have children until my 30's so that I could be financially stable and own a house first. That's a choice (yes obviously there are some horrible situations where it isn't a choice but again I'm comparing to the average person). I made my own entertainment as well as watching terrestrial TV rather than getting subscriptions. I got a cheap second hand phone rather than an expensive contract. None of those things are privilege.

[quote shrodingersbiscuit]@JoysexrenovationFingerFumble When you say that about cafes in the 90s - my niece was watching friends the other day and said 'Jesus, how do they afford coffees all the time, must be costing them a fortune' haha! Had to explain that a cuppa in the 90s wasn't 4 quid!![/quote]
But people didn't earn the same either then. It would still have been expensive relative to incomes.

In the 1990s I earned something like £7k pa working full time. Even someone earning NMW these days is on £17k pa.

I can't remember how much a coffee was then, but it would probably have been a quid or two and if people were having them every day, it would have added up to a lot.

@BarbaraofSeville I didn’t grow up in the UK; it really wasn’t expensive relative to my student income. Sounds like things were different in the UK!

And now we're in a society who thinks it's normal to press a button on your smartphone and have coffee, McDonalds, Nandos etc brought round in a taxi. How much must that cost?

I'm of the age where taxis are a luxury that you use rarely, but there's people out there who pay for their lunch to ride in one .

I’ve got £800k of value in assets saved up at the moment. Expect that to go up a lot in £ terms as sterling continues to be trash. I still live like a grad student despite being on 150k per year. Works for me.

It’s not about weather you have a small/large salary either. You cut your cloth accordingly...

And if your cloth isn't big enough to start with? Or what you need to cut to give to other people to have essentials like a home, or paying council tax so you don't end up in court, leaves you with a tiny amount?

It's not always a case of cutting back on things to free up money, chances are someone on a low income has always done that through necessity, there comes a point where you're unable to cut anything else back because either it's non negotiable, like council tax, or it's already the lowest available like social housing rent.
When your income is taken by essential costs like a roof over your head and council tax, etc, and there's very little left anyway, it surely is a choice whether to spend that very little immediately on a takeaway coffee or meal as a treat or to have nothing enjoyable on a day to day basis and save longer term for something bigger to enjoy, like a holiday, when you could save that little bit for the rest of your life, being miserable doing so, and still have no hope of owning anything of value anyway.

@Overthebow Someone paid for your education, so you could get that decent job. Someone raised you in a house that enabled you to study. Someone made sure you knew you had reproductive agency. I never said you (or I) didn't work for it but all of our choices are enabled by our privileges.

As I said I'm talking about the average person. In the UK education is free to all. I didn't go to private school and I paid my way through uni with jobs and student loans. I lived in an average house but didn't have a good childhood so wasn't always able to study. I think I had less than average privilege here. Reproductive agency, I guess I'd like to think everyone knows they have a choice over this, but maybe I am wrong there. Although I still think the average person does know this.