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?

No debt outside the mortgage and we own everything else we have outright, we’ve both been brought up not to buy on the never never. I don’t even have a credit card.

@terribleg

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 🤣🤣

I was talking in living memory! You don’t like facts much, do you? 🤣🤣🤣

What facts?

I buy what I need not what I want, the rest goes into savings, I couldn't live like that

I have to agree. I come from a family who believe in ‘living in the moment’.
My parents see me as the ‘poor and struggling’ child because I don’t believe in credit. DH and I only buy things we can afford outright which means 2nd hand most often.
My brother is seen as successful and amazing because he drives an expensive car, has an amazingly furnished house and does things like spending £5k on the proposal to his GF (he hired a filming company, an entire cinema... don’t ask)

Anyway point is he is actually £80k in debt, he openly talks about it. Yet my family sees this as a sign of success and this is how my entire family live.

Me? I have very little but I am 100% debt free and love my job and life. ... I am the failure of the family apparently.

My parents don’t have huge debt but my dad was earning crazy money, they blew it all by going on 2 luxury holidays a year costing 10-15k each time. They were complaining that they are struggling to survive since covid yet 3 months ago bought an expensive new car on credit. I have very little sympathy for their current situation and directed them to the local food bank when they complained they couldn’t afford rent this month.

Point is ... I think buying everything on credit and debt are no longer a thing looked down on. Buying on credit is seen as the norm nowadays and no longer a negative thing.

I've got around £3k of debt, accrued from illness because SSP didn't cover my outgoings and the way not being able to afford your bills is dealt with is to financially penalise you, this was compounded with Covid, furlough and redundancy - I couldn't meet the terms I'd already agreed to and been meeting.
Around half that figure is probably fees attached to not being able to afford to pay in the first place. It hasn't really achieved anything, it's not 'taught me a lesson' as such because I can't guarantee I'll never get ill again, and I already know I'll be having SSP, so the fees are basically lining someone else's pocket rather than achieving anything. But the assumption is that I'm just feckless, one person who I spoke to regarding all this told me recently that "Bills still need to be paid, even during covid" I'm not quite sure where she expected me to magic the money from seeing as I had zero income at that point, but expect she did and I now have a financial penalty to add to the debt because of my utter fecklessness of being ill and then working in an industry that covid closed, then went bust because of the closure.
For that reason I don't have credit, I had enough trouble getting WiFi because of my credit rating.

I don't have credit, no mortgage, nothing. Everything in the house is either given, bought second hand, or has been saved for and replaced new, but cheaply.

I've probably got less debt in real terms than 50% of people on this thread, I've also got no assets either.
I don't have the extravagant lifestyle described here and funded by credit cards and tax payers, I never will because even when the debts are paid off and the credit rating goes back up, I don't want to be in this situation ever again.
I work hard, but sometimes, it's just not enough, and I don't care what anyone says, it's not always enough to have a good work ethic and no credit, I know because I'm living it.
I have no thought at all towards those with more than I do, until they start telling me that people like me are in this situation through being lazy and wasting money, that is undoubtedly true for some, but for many it's not.

@Maverickess that’s so shit It is true that we’re all just one or so mortgage payment away from being insolvent, sorry to hear what you are going through.

I agree OP. I’m 25 and was in about 6k debt last year. I’ll openly admit I had a gambling problem(banned myself online and haven’t done in over a year nor do I plan too) it wasn’t the gambling that was the issue, it was being with an abusive wanker who earns triple my wage, yet still made me pay half of everything and then everything else on top. I only ever first got a credit card as he asked me too and I stupidly agreed.

It was spent on holidays to visit his stuck up twat of a mother in a foreign country where she emigrated. Fancy shit he wanted for the house and trading my bought out car in for 4K to put down on a deposit for a 15 plate Audi on finance. Fucking stupidly, only bastard thing I didn’t put my name on. He took it and sold it.

I was left carless, house less and also got made redundant( don’t get me wrong, a year on it’s the best thing that’s ever happened, finally have my own life)

I live above the pub I worked at, recently got myself a new job, paid off over 3k in debt in a year. I’m going to go into a house share at about £400 per month all in and then my bills on top and pay the rest of my debt off. Save for a mortgage deposit which I can achieve in a couple of years. I’ve been driving my dads 17 year old van around to get from a to b and just bought my grandads 04 plate Astra off him.

I don’t have much but my god, I finally feel free and that it’s onwards and upwards for me now. I may never have anything fancy but as long as I’m debt free and I’ve bought it, I’ll never be in a position to come away with nothing after years of giving!

We got married in 1973 immediately my husband finished university. We had no money but were able to get a mortgage on a house the following year because of help from the company he worked for. However, we had no washing machine or TV, a camping table to eat off and a very old sofa and chairs given by my in laws. We didn't go abroad until 1981 when we moved for work. We bought clothes in the sales and never went out because my husband worked during the day and studied every evening for professional qualifications. He qualified in 1977 and we had our first child the following year. Being very careful with money for so many years has meant that even though we are now well off, I still buy nearly all my clothes in sales! It's a mind set. But I'm glad we were so well trained at being careful with money because we have never been in debt (apart from the mortgage) and have had no sleepless nights due to debt. I feel incredibly blessed.

I think you’re right op, that’s what it feels like anyway.... so many of our friends or acquaintances seem to have very expensive houses, cars, holidays, phones, tech, clothes, beauty treatments etc. I would love to know their secret as not all are in very high paying jobs, some of their partners don’t work, or do minimal low paid work and unless they have had inherited from a long lost millionaire relative have no idea how they do It!

We have some of the above, but only buy what we can afford, save for things and pay off our credit card (if we use it) monthly. Being in debt - mortgage aside, would terrify me!

And I'll just add that apart from the old sofa, my in laws gifted us a banger so my husband could get to work (I worked round the corner) but my dad had been out of work so my lovely parents weren't in a position to help us.

@Maverickess

I've got around £3k of debt, accrued from illness because SSP didn't cover my outgoings and the way not being able to afford your bills is dealt with is to financially penalise you, this was compounded with Covid, furlough and redundancy - I couldn't meet the terms I'd already agreed to and been meeting. Around half that figure is probably fees attached to not being able to afford to pay in the first place. It hasn't really achieved anything, it's not 'taught me a lesson' as such because I can't guarantee I'll never get ill again, and I already know I'll be having SSP, so the fees are basically lining someone else's pocket rather than achieving anything. But the assumption is that I'm just feckless, one person who I spoke to regarding all this told me recently that "Bills still need to be paid, even during covid" I'm not quite sure where she expected me to magic the money from seeing as I had zero income at that point, but expect she did and I now have a financial penalty to add to the debt because of my utter fecklessness of being ill and then working in an industry that covid closed, then went bust because of the closure. For that reason I don't have credit, I had enough trouble getting WiFi because of my credit rating.

I don't have credit, no mortgage, nothing. Everything in the house is either given, bought second hand, or has been saved for and replaced new, but cheaply.

I've probably got less debt in real terms than 50% of people on this thread, I've also got no assets either.
I don't have the extravagant lifestyle described here and funded by credit cards and tax payers, I never will because even when the debts are paid off and the credit rating goes back up, I don't want to be in this situation ever again.
I work hard, but sometimes, it's just not enough, and I don't care what anyone says, it's not always enough to have a good work ethic and no credit, I know because I'm living it.
I have no thought at all towards those with more than I do, until they start telling me that people like me are in this situation through being lazy and wasting money, that is undoubtedly true for some, but for many it's not.

That is sad and I hope things get better for you.

People are so quick to judge. We do our very best not to.

@Dissimilitude

My own living-within-my-means is generally driven by an over-active imagination on the sorts of things that could easily go wrong to derail my currently financially sound situation. I consistently think about it.

Mostly I see how people in my current position don't tend to last all that long, so I treat my current earnings as potentially a peak, rather than inevitable continued growth.

Thinking this way changes my priorities considerably. I want to have something to show for my stress levels once I get fired / bail. So overpaying my mortgage and piling money into a pension are way more appealing to me than buying a new car or going on fancy holidays.

That risk aversion is definitely not a universal!

Yes. I constantly worry about whether my current line of work will be relevant 15 years down the line and will I still be able to afford the lifestyle I currently have. This way of thinking makes me save most of my income.

Rent/ mortgage plus childcare bills put paid to any sort of living within my means

@terribleg

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?

@terribleg - yeah, rent comes out of the 2.5k.

I put the max allowed into my pension per year - 40k. I’d put more in if I was allowed but that’s the limit unfortunately. It only costs me about 25k to do it because of the employers contrib and salary sacrifice giving me the Emp NI saving on that too.

Means I’m still in the horrible 100-125k marginal tax zone.

The pension is the best vehicle of all because of the up front relief, and I plan on drawing down barely anything from it later i life because it’s exempt from iht. I’ll hit the lta (lifetime allowance) probably so will start slowing down.

Crypto is the best vehicle of all imho but the bloody fca have stopped us buying etfs for that - idiots.

Clearly both are the best vehicles 😂 well, apart from my Tesla 😁

I think it's because there's more temptation these days and things are more accessible. You can buy almost anything on the internet at the click of a button and it doesn't feel like 'real' money.

And also, more people seem to suffer from depression and mental health issues now, so perhaps it's a case of retail therapy?

Doh, forget you were higher earner so maxing pension makes sense @TulisaIsBrill

@terribleg

Doh, forget you were higher earner so maxing pension makes sense *@TulisaIsBrill*

@terribleg I did it when I was a lower earner too tbh. The tax relief and salary sacrifice benefits are too good to miss.

Personally I’d also do it if I was on tax credits/universal credit , because pension contributions are disregarded. In some ways that makes the most sense of all - 25-27p loss of net income for up to £1.138 in the pension depending on your salary sacrifice arrangement is an absolute no brainer!

Especially as pension savings aren’t means tested like other savings are - and especially given what’s been done with housing in this country where there is no chance for most

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

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

^^doesn't have to be a mortgage. Just some funds behind you to sleep easier at night. Things always break down, jobs change, people can fall ill.

@terribleg

In fact there is almost nowhere on the income spectrum where maxing your pension doesn’t make sense imho.

You’ll either get more tax credits/UC, or you’ll avoid losing child benefit, or you’ll avoid higher rate tax, or you’ll avoid getting your personal allowance tapered away, or you’ll avoid additional rate tax. Especially under salary sacrifice arrangements.

The only place it doesn’t make sense is if you are closing in on the lifetime allowance, imho. Not financial advice but it’s my opinion.

Also EV salary sacrifice and cycle to work are awesome.

I did do cycle to work, hardly ride the bike though! 😆

Im in the LGPS & do pay AVCs.

It's not a young person thing. I know severl young couple working hard to save for a deposit on a small home.

The worst people I know for living beyond their means are people in their late 40s/ early 50s. One couple I know must be taking home well in excess of 80K per year, yet they still have remortgaged their house twice to extend it and fit new bathrooms. They change their cars every year - really expensive huge cars - yet they both live in walking distance of work.

They moan constantly about their jobs - yet both could retire now had they spent within their means and saved. Instead they have a mortgage that they will not pay off until they are in their late 60s. They have daughters who also have very expensive tastes and so they buy now pay later culture continues.

There’s been similar threads done like this... unfortunately it doesn’t attract people to post that they are deeply in debt by chasing dreams/etc , if people were really honest , I think you would see just as many people in debt as there are of people on this thread not in debt.
Reading through most of the posts people claim not to have any debt... it doesn’t take a lot to snowball you into debt though, divorce, job loss, illness.Sometimes it’s not from holidays/cars/furniture.. sadly.