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?

@the80sweregreat

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!

No you're right, it's about bashing younger people and moaning about how profligate and wasteful they are.

I have no debts (other than mortgage) but no savings.

Every single time I get a bit of a rainy day fund built up, something like COVID (most recent example) intervenes and wipes the fucker out.
I don't spend big on hoildays and drive a 15 year old car.

Or necessary...

Well. I think there's an obvious difference between, say, needing to take out a loan/whip out a credit card for a new boiler, v routinely using Klarna to buy clothes or signing up to a £3/400 / month car leasing scheme.

Obviously there are plenty of people who sadly rely on debt to get to the end of the month, but the OP refers to people "that lead seemingly extremely expensive lifestyles and don't save a penny, or even go into debt to afford extravagant holidays or cars" - seems a different thing.

Yes me included. I'm starting from the 1st of May thankfully I'm not in debt but I've feck all savings and will never have any at this rate my spending on crap is out of control.
I need a new hobby.
Watching with interest for tips.

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!

@EssentialHummus

Or necessary...

Well. I think there's an obvious difference between, say, needing to take out a loan/whip out a credit card for a new boiler, v routinely using Klarna to buy clothes or signing up to a £3/400 / month car leasing scheme.

Obviously there are plenty of people who sadly rely on debt to get to the end of the month, but the OP refers to people "that lead seemingly extremely expensive lifestyles and don't save a penny, or even go into debt to afford extravagant holidays or cars" - seems a different thing.

Which do you think is more common and which do you think results in higher debt?

Foxy "The standard of ,icing is higher too"

Is it? I always love icing

Yes, I think it's a norm OP. Years ago, a (former) friend said he was shocked at the lack of shiny new stuff in my home, which I bought and furnished with second hand stuff including a sofa and coffee table I took from my folks, who were buying new after about 20 years.

That stuff is still here. Good thing he isn't!

Well everything is expensive so people do have to stretch & then credit is available very cheaply plus no interest on savings.

I don't really understand third party stuff like Klarna, is that a bubble that will burst?

Consumer goods are relatively cheap. Wages have fallen in real terms and most bills and housing costs have gone up exponentially. It doesn't matter much whether someone buys the odd avocado toast or a good phone once in a while, the stuff that really matters costs much more and salaries are taking the piss which is why a lot of people struggle.

Also credit is pushed on people from a young age. Students are expected to go into huge amounts of debt. It sets a precedent.

I don’t think ‘things ‘ are more expensive. It’s just that everyone wants things and feel that they have the right to have all these things. The number of 1-2 year old sofas on Facebook for sale because ‘ a new one is being delivered next week always surprises me. Apparently you need to change your sofa now if you repaint your living room. People are incredibly wasteful.

Absolutely. Most people I know spend every penny, no matter how much they earn. I think 1 in 5 of the people I know have any kind of savings or just don't feel the need to spend every penny.

It's like when I was a kid, my dad would give us 2 quid to get sweets before the cinema, you can bet I spent every single penny of that 2 quid, counting up what was left and seeing what I could get for 17p. People seem to do that with their wages.

@ConsuelaHammock

I don’t think ‘things ‘ are more expensive. It’s just that everyone wants things and feel that they have the right to have all these things. The number of 1-2 year old sofas on Facebook for sale because ‘ a new one is being delivered next week always surprises me. Apparently you need to change your sofa now if you repaint your living room. People are incredibly wasteful.

What you think doesn't matter, it's a matter of demonstrable fact that the cost of living has outstripped wage growth and wages have fallen in real terms over the last decades. Items cost more proportionately to wages than they used to.

The fact that some people are wasteful does not disprove macroeconomic trends.

And travelling. There is a huge amount of money spent on ‘travelling ‘ and then complaining about raising a house deposit whilst driving a brand new financed car.

The fact that some people are wasteful does not disprove macroeconomic trends.

True dat but people will ignore it

Some items do but they tend to be the ones you can live without. Food is cheaper in real terms as are clothes.

Honestly, I find people who are obsessed with not having debt to be the crazy ones. Especially when they look at debt as a moral failing.
I bought a dining table the other month for £1200. Will pay it back at 0 per cent interest free for £30 a month for the next few years. Same with the sofa, 40 pounds a month for the next three years. I got exactly what I wanted, brand new, for 70 pounds a month and as we make £85,000 a year between us, we'll barely notice it. We would have had to take a good chunk out of our savings to buy both outright and frankly I'd rather keep the money in the bank.
Car finance...meh. Even a reliable second hand car will cost thousands so sometimes a lease car makes perfect sense. I don't have a car on finance at the moment but ours is 10 years old so if it blows up, we'd have to.
I've put holidays on credit cards loads of times and paid them back over several months. All this saving for a rainy day seems crazy to me. We took the kids on the most wonderful holiday to Greece in 2919...5 star resort, all inclusive, it took us a good few months to pay it off, but imagine if we'd booked it for 2020 and saved?
Seize the day, use credit wisely, live life to the full! I find it so sad when people are refusing to treat themselves so they can keep thousands in the bank...that's what seems wasteful to me. Money should be a tool for improving your life, not a security blanket.

driving a brand new financed car.

I don't understand the hate for the above, we have a 2nd hand car bought outright, it's expensive & when we need a new one will probably get it on finance.

@ConsuelaHammock

And travelling. There is a huge amount of money spent on ‘travelling ‘ and then complaining about raising a house deposit whilst driving a brand new financed car.

I don't own a car and I don't often take holidays. I earn a good wage. I'm 31 and living in a houseshare like a student to save money.

It will still take me several years to raise a sufficient deposit to buy a house.

I don’t think living “beyond your means” is advisable, but there’s very little motivation for anyone to save money considering interest rates are so low. If people can buy things instantly on 0% credit rather than saving for years I don’t blame them, I’ve done it before for large purchases and had no issues, in fact it helped boost my credit score so I could get a great mortgage.

I'd say it's the opposite - the winners from lockdown have been saving, but maybe once everything reopens they'll go on a spending spree that goes beyond spending what they've saved.

However, I think too many people live on credit to keep up with the Jones. All I can think is that they have no imagination and can't conceive of losing their jobs and being in the mire with loads of debt.

I know some people have to borrow just to survive. I am not talking about those people.

@ConsuelaHammock

Some items do but they tend to be the ones you can live without. Food is cheaper in real terms as are clothes.

You mean like houses and public transport and utilities and council tax and rent?

Those little tiny inessential things?

Seize the day, use credit wisely

Fair enough if you can do that but many people don't use credit wisely.

I've always been a saver & live within my means

I regularly check my savings & move to better investments

Savings interest rates are currently very low, the Government wants people to spend to kick start the economy after the covid lockdown. I will continue to support local businesses

However, there has to be a balance between saving & spending. No point in extreme saving, if there is nothing to enjoy or look forward to

"Things" haven't got dearer. In real terms most things are cheaper than they were in 1988 and a lot cheaper than they were in 1968. The % of household income spent on food now, for example, is miniscule compared to a generation or two ago, but expectations have changed massively. The amount of things people "need" has grown very rapidly.

Two cars in a family was unheard of when I was a child and foreign holidays were for the wealthy. We ate in a restaurant twice during my childhood, once to celebrate a promotion of my father's and once when my mother was successful at interview to return to work when DSIS started school. (Unusual in itself in those days).

In my parent's childhood you had two sets of (very expensive, relatively) clothes and never went on holiday as a working class person.

The changes aren't a bad thing but expectations have definitely changed and have to be paid for somewhere.