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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To think living within your means has become the exception?

594 replies

SmokeyApo · 06/04/2021 09:27

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?

OP posts:
TristantheTyrannosaurus · 07/04/2021 17:47

I don't give a toss how other people live their lives, much less judge them for not doing things My Way. YABVU.

Alsohuman · 07/04/2021 17:51

@terribleg

I have colleagues who in the 90s earning 20k borrowed 5.5 times their salary for a 95% interest only mortgage with some of the deposit coming from a credit card. Crazy! but they are the ones in million pound houses.
They didn’t. You could only get 2.5 times income and you couldn’t get interest only mortgages in the 90s, they didn’t exist without an endowment policy which cost the same as the repayment element of the mortgage. If they told you that they have very poor memories.
terribleg · 07/04/2021 17:54

I'm sure they are lying, my parents got an interest only mortgage in the 90s too for a 60k house. Now they sell for 2m.
Another lie Im sure!

TulisaIsBrill · 07/04/2021 17:54

We should go back to those sensible lending policies (2.5x, not endowment) of the 90s then and see what happens to prices.

Alsohuman · 07/04/2021 17:56

@TulisaIsBrill

We should go back to those sensible lending policies (2.5x, not endowment) of the 90s then and see what happens to prices.
I agree. I didn’t say they were lying but they must have also had an endowment policy to get an interest only mortgage.
Galdos · 07/04/2021 17:57

I had the great good fortune to be completely skint at the start of my working life (this was pre-minimum wage, and incomes for youngsters could be very low), and drifted into debt because my income couldn't quite cover rent and food and other stuff ... had my bank account frozen for a couple of years while I crawled out of debt.

Apart from the mortgage (paid off asap) I haven't been in debt since, and have always had spare cash. I am forever grateful for that start in life.

Alsohuman · 07/04/2021 17:58

I’d also like to know where the £60k to £2 million house is because the one I paid £70k for in 1991 is worth just over £300k now.

terribleg · 07/04/2021 18:00

SW London, pretty common.

terribleg · 07/04/2021 18:02

My own home has doubled in value & I was in school in the 90s so I'm not sure how you did so badly in London?

Alsohuman · 07/04/2021 18:06

@terribleg

My own home has doubled in value & I was in school in the 90s so I'm not sure how you did so badly in London?
Did I mention London? Expensive part of Berkshire. I have a sense of deja vu, have you namechanged recently?
Formulation123 · 07/04/2021 18:11

I hope the interest rates never go as high as they did in the 90s i think more people would lose their houses due to the increase house prices and borrowing more.

My 230k mortgage at 2% is about £800 a month at 15% we are talking £3000 a month.

I always get fixed mortgages for this reason but probably payed more over the years because of it.

terribleg · 07/04/2021 18:18

I've nc but not being on this thread. I nc constantly though.

Did I mention London? Expensive part of Berkshire. I have a sense of deja vu, have you namechanged recently?

No but you replied I’d also like to know where the £60k to £2 million house is because the one I paid £70k for in 1991 is worth just over £300k now.

Most people are aware that nationally house price growth is very different. Why would you extrapolate your example to others? If your not in London it's irrelevant

Theoldwrinkley · 07/04/2021 18:30

I think there is a muddle in most minds between ‘need’ and ‘want’.
It’s not all generational, but a lot is. I’m very proud of both my son’s who equipped their houses entirelyfrom ‘freecycle’, except for a washing machine each. Then as they recover from the expense of buying a house, they can replace if/when they choose. The only furniture I had when buying my first house were 2 deck chairs and a folding table and bed.
Also far to much influence of advertisers and ‘influencers’....what an idictment of society! Avoid fashion, make your own style.

Alsohuman · 07/04/2021 18:32

Because you didn’t mention London? 🤷‍♀️

terribleg · 07/04/2021 18:34

I didn't know I had too 🤷🏻‍♀️

terribleg · 07/04/2021 18:36

It's really common to see that price growth in London tbh.

terribleg · 07/04/2021 18:37

If you bought early enough that is. I would say it's quite unusual to see such low growth as you have in the SE,

terribleg · 07/04/2021 18:41

So on a net income of 10k p/m, I live on about 2.5k.

Thank you for the explanation, does the 1k rent come out of that? If so you are doing well. How come you put so much into your pension as opposed to other vehicles if you don't mind me asking?

LaurieFairyCake · 07/04/2021 18:43

I borrowed 5 times our joint salary in the 90's

Yes you had to have an endowment - but you could cancel them like any other savings vehicle and people did Confused

We didn't cancel ours but we got all our payments back plus a penalty of £2k from the provider in the endowment scandal...

Alsohuman · 07/04/2021 18:43

@terribleg

If you bought early enough that is. I would say it's quite unusual to see such low growth as you have in the SE,
No, it’s pretty normal. It’s over 400% in 30 years. As your example showed most house price inflation has been in the last 20 years, our current house is now worth 350% the amount we paid for it 22 years ago. House prices were pretty stable through the 90s.
LaurieFairyCake · 07/04/2021 18:44

AND we had a 100% mortgage Grin

It was so much easier back then to borrow - which is why it went so fucking tits up when so many went into negative equity

terribleg · 07/04/2021 18:46

As your example showed most house price inflation has been in the last 20 years,

Has it? zoopla only goes back so far. I think the home i'm in cost about 1-2k in the 40s, according to an elderly neighbour. Worth about 900k now.

Alsohuman · 07/04/2021 18:48

@terribleg

As your example showed most house price inflation has been in the last 20 years,

Has it? zoopla only goes back so far. I think the home i'm in cost about 1-2k in the 40s, according to an elderly neighbour. Worth about 900k now.

Ffs - we’re going back 80 years now?!
terribleg · 07/04/2021 18:49

Well I asked because you said it was only in the last 20 yrs, you really don't like a differing of opinion do you 🤣🤣

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