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?

A couple of years ago a woman I worked with admitted she had to ask her Mum for some money to buy a new boiler as their's was beyond repair. Both her and her DH were middle management on very good wages but they had just done their fortnightly shopping and had no money until payday! Every month they spent everything they had. No savings whatsoever.

During lockdown she had a sort out and has 35 bags of clothes to take tthe charity shop, many with the labels still on.

I just don't understand it.

I find the snobbery about leased cars weird. We lease a car. Insurance is covered is part of the lease, and when it needs servicing or repairs they pick it up and drop it back. It makes life so much easier than owning a car (I have owned cars in the past and it has generally been a ballache). How is it any different to renting a house? I need a car to drive so I pay a monthly fee to drive one, with everything included. We have three small kids and two full time jobs so anything to reduce admin is appreciated.

@TheOneWithTheBigNose

I find the snobbery about leased cars weird. We lease a car. Insurance is covered is part of the lease, and when it needs servicing or repairs they pick it up and drop it back. It makes life so much easier than owning a car (I have owned cars in the past and it has generally been a ballache). How is it any different to renting a house? I need a car to drive so I pay a monthly fee to drive one, with everything included. We have three small kids and two full time jobs so anything to reduce admin is appreciated.

I doubt understand it either. But I wouldnt do it as I like to pay for my car over a few years then know its mine at the end to do with whatever I want..

For the first time ever i have bought myself an "expensive" car (to me, I'm sure someone here would consider it middle road) and I LOVE it. It's a fairly big pymt for us each month but I adore it & a year on I still get a buzz when I drive it

DH and I often wonder where people get their money as most of our friends have good jobs but not good enough to cover their lifestyle. Holidays/big houses/fancy cars. Latest Dyson hairdryer, phone, latest Mac etc....

I also see a trend of people buying a house and needing to absolutely everything to it immediately. New kitchens/bathrooms/extensions/attic conversions even when they don't necessarily need the space and what was there would have been fine at least in the short/long term. A friend bought a fabulous house in London for 800k and is not completely redoing it to the tune of 200k for extra space but for the moment it's just the two of them they are both middle management so don't even know how they could afford the house to begin with? (Secret lotto win?!)

We have done all improvements to our house in time as we've needed them and when we had money. So am always surprised when people buy a house with just the two of them and need these things immediately.

Conclusion we've come to is that they are more open to being in debt. Whereas we just want a comfortable life and not having to be stressed about repaying bills in to our 60's. So they will be in the rat race forever more basically.

You're didn't. I know people who earn well. More than I do, yet have nothing at the end of the month. WherAs I save every spare penny

I also know people who are really poor, single parents in rented house. Yet has a brand new car on finance. That costs hundreds every month. Don't get it

On the flip side, I know people who have lived in same teeny house with 2 kids for 20 years. Must have paid that mortgage off by now.

@TheOneWithTheBigNose

I find the snobbery about leased cars weird. We lease a car. Insurance is covered is part of the lease, and when it needs servicing or repairs they pick it up and drop it back. It makes life so much easier than owning a car (I have owned cars in the past and it has generally been a ballache). How is it any different to renting a house? I need a car to drive so I pay a monthly fee to drive one, with everything included. We have three small kids and two full time jobs so anything to reduce admin is appreciated.

Plenty of people are snobby about renting a home as well.

Well done all you who save and are sitting on your judgie thrones judging what others spend their money on and assuming that they must be in shed loads of debt because you’re a bit jealous that you think they might be living a more luxurious life than you. Guess what... it’s none of your business

Hollie
Personal debt levels affect the whole economy. It’s something of a double edged sword on one level the government needs people to spend but on the other it’s putting people at risk of personal catastrophe.

No jealousy from me because my priorities are different. Having said that I fully agree with the comment above that living within your means is easier when you have sufficient means to live within. We are comfortably off so do have the “luxury” of choice. It often comes up on school threads that private schools have thriving second hand uniform shops because buying new doesn’t prove anything when you can already afford the fees.

The OP was talking about highly paid people who blow their income. I work in Financial Services and the number of people who spend large salaries and bonuses might surprise you. Like the person I worked with who at one point was paying over £100k pa in school fees out of taxed income.

I realised psychologically I couldn’t keep that many plates spinning just to have stuff that didn’t matter that much to me. The peace of mind was more luxurious than a new car. So I choose to focus on the things that mattered to me and not on other expenditure.

And when you are made redundant? What covers the rent/mortgage, bills, food, etc? No salary, no bank loan... Can't happen to you. It can and it might. There are no jobs for life. I think everyone working has to think "how do I live if I am made redundant 3 months time?" Too late when it happens and a you have are debts. Being made bankrupt is not a great place to be for you or your family. And it is happening more and more.

I'm a saver. If I want something I'll buy it but I guess I don't really want much iyswim, after bills whatever is left is usually saved.

I do find it quite insulting though when young people are deemed frivolous with money and will never afford a property. I bought my house when I was 20 with no family help. I was with my ex DP so two salaries but we were both on less than £20k each. I didn't go to uni so no student debt, went straight into work and just saved because there was nothing I really wanted to buy. I was living with my parents at the time so had no rent to pay either. This was only 5 years ago btw. It's a pretty decent house too; three beds, corner plot so a massive garden (people often tell me I should build another house on the garden because there's room for it!) a garage and a driveway. When my ex moved out I remortgaged, my salary had gone up to just under £25k and I was able to buy him out.

I do appreciate everyone's circumstances are different and also that house prices are different all over the country, I get it won't be easy for everyone. But I do get a bit irked at this generalisation that it's apparently impossible. Also this expectation that everyone's child will go to uni. I think if they have a specific career in mind that they need a degree for then fine, but I know so many people who go to uni 'just because', and they end up in debt only to get the same job that someone else their age has already been doing for three years and saved up.

Hollie, saving is sensible. I don't think anyone on here is judging anyone, though it does p* me right off when people who do have extravagant lifestyles, then expect other people (sometimes who have less money than them) to bail them out. If I could persuade you of anything Hollie, it would be to save a little money for inevitable emergencies. After this Pandemic, it will need to be paid for. Food has already increased in price. I paid £57 for a couple of bags of food yesterday and although it was not a dear supermarket, I didn't think I got alot for the money I spent. If you lost your job or got sick, what would you do?

OP this variant of rampant capitalism that our society is currently afflicted with relies on huge numbers of people being in debt to generate profit and increase capital.

Once upon a time the loans of banks were backed by gold. Now they’re backed by debt.

I agree OP, it seems that the majority do. It seems far too easy to get everything on credit now, when in the past we had to save or buy second hand etc. It seems to be all about 'lifestyle' and I think social media has a big part to play in it.

@TheOneWithTheBigNose

I find the snobbery about leased cars weird. We lease a car. Insurance is covered is part of the lease, and when it needs servicing or repairs they pick it up and drop it back. It makes life so much easier than owning a car (I have owned cars in the past and it has generally been a ballache). How is it any different to renting a house? I need a car to drive so I pay a monthly fee to drive one, with everything included. We have three small kids and two full time jobs so anything to reduce admin is appreciated.

I don't own a car but given they depreciate in value so quickly, it seems to me that it makes a lot of sense to lease them and be able to lease a newer one to drive when you need to, rather than buy one outright then you sell for scrap when it dies.

Living in the graveyard where leased cars are sent to be resold for the top price (Cornwall) I promise you that pre-leased cars come here to be sold for way more than you'd get in a town where leasing is routine. Then we drive them for 10 years, and after that, they are handed down to 17 year olds to learn on and knock about for a few years. This is where your cars come to retire. It's been the same since the 1960s to be fair. Not many people in Cornwall buy brand new cars.

Why would anyone buy a car from a showroom? It's just a rollercoaster to shed money out of your pocket. I have never understood. But I am not very interested in cars.

@Gothichouse40. Thanks for the advice, but I do have savings, so if anything awful happened we would have enough to live on until we can sell and buy a small flat outright. But, I can acknowledge we are very lucky to have been able to save that money. An awful lot of the posts here seem to sound very smug and also a bit jealous someone else’s lifestyle seems more expensive: but they might just have different priorities on what they spend on: you don’t know from the outside.

Im glad to hear this Hollywood.