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?

I will say though that when I say I'm one of 'those people' there's lots of things I don't spend money on.

My clothes are second hand from eBay most of the time and I wouldn't dream of replacing a two year old sofa to redecorate. Anything we no longer use gets sold on eBay, never thrown away unless it's really beyond use. Lots of our furniture and decor is second hand or vintage too (mixed with new pieces) because that's the style I prefer and I don't like the idea of getting lots of new things with all the impact that has on the environment.

DH's grandfather lived around the corner in a typical 2 up, 2 down terraced Victorian. There were 10 children, and we are bursting at the seams with 3!

DP and I are opposites in this respect.

He's never had a penny in savings in his life- he's been a NINA (no income no assets) for about a third of his adult life.

When we try to plan a purchase like a car/holiday/Christmas I'll want the cheapest/best value option but he will want the more premium version even though he's never been on an above average wage.

I find it endlessly frustrating and I wouldn't have pursued a relationship with him if I'd known this at first.

I prioritised housebuying in my 20s and am now much better off than my peers who travelled/rented in fancier neighborhoods/ had big weddings etc.

I am the only person at work who owns their car outright.

Saying that I don't have the savings quoted above (6/12 months full pay). That would be astronomical and poor financial management.

I agree OP that a lot of people don't live within their means, and it's because it's so easy to get everything on credit now. A friend of mine has had anxiety since she moved out of her Mums into her own house and one of the reasons she says for it are because she worries about what would happen if something went wrong and how they would pay for it. They've had about four cars in that time as well, and have just bought a new house that cost double their current one and is at the top of their budget. It seems so crazy to me. Me and DH earn a good salary but we look like we're poor compared to everyone we know as we do our best to not buy things on credit.

I’ve been relatively frugal, and have every intention of treating myself a bit in retirement. I’ve got one more house move in me, probably to downsize.

I don’t get the whole thing of having as many ‘experiences’ as possible. Something you particularly want to do or see, yes - but if you can come up with a different one every few months that’s just a passing fancy and it’ll all be the same in 10 years’ time. FOMO can be avoided quite easily by ignoring advertising.

I saved about 13k over the last yr largely to not having a life. Spent half of it on a new garden though.

@Whatisthisfuckery

I always think it’s a bit rich when the older generation berate the younger generation on their spending habits. I’m sure if we could afford a house on one wage we would. Most younger people are paying a large proportion of their income in rent, to members of the older generation, and it would take a lifetime to save up enough money for a deposit. Maybe if the older people weren’t fucking us over in rents we’d have something to save for?

Depends where you live. In most parts of the country it would not "take a lifetime" or even more than a few years. But hey, only the South East exists, right? An EVERYTHING is the fault of older people as a group, whatever most of them actually do. I always think that's a bit rich.

I think it's prudent to have some savings & insurances but I know too many people who died a yr or so into retirement after a frugal life so I think a balance is important.

I look at my biological dad ( he's ok but paid very little maintenance and I wouldn't ring him if I was in crisis) who is still up to his eyeballs in debt in his mid sixties. He rents houses out so gets a really good income from them and had a teaching and state pension. All the rental houses are in negative equity and he has no intention of paying them off, just keeps remortgaging and says we can deal with it when he dies ( not that he has left us anything in his will so he can fuck off with that one as I won't be sorting his shit out).

He has had so much money through his fingers, got a massive life insurance pay out but has never had any financial stability. He inherited 30k recently but instead of sorting out the half built house around him which still looks like a building site years later or pay off the negative equity on his rentals, he fucked off to Australia for months for one of many holidays of a lifetime.

My stepdad on the other hand is not from money at all but worked hard at uni and got an excellent job, well paid. Took me and my brother on as his own, paid school fees, paid house deposits, cars, holidays etc. Wouldn't hear of us taking out credit for anything, insists we borrow from him at no interest then he will tell us to stop paying him after a while. He has investments, always plenty of savings, buys cars worth 60k outright, never any credit. He's never showy about money but my dad you would think he's a millionaire the way he goes on with big financial gestures he can't afford.

I don't earn what he does obviously but I try to follow his example and will be in a position to support my kids if they need it even as adults. There will never be anything they need that I can't help with. They're both learning the value of money and I would hate them to get into debt. I would tell them to look at my dad and how he's ended up. He's stressed to bits because of his choices.

Honestly it's culturally what has been pushed since the 80's.

We're bombarded with advertising day in, day out telling us that we won't be happy if we don't have X, Y or Z.

Now 'keeping up with the Joneses' isn't about the next door neighbour who is in a similar financial position to you, it's about constantly being exposed to lifestyles and potential experiences that encompass pretty much anything and everything you can think of.

Obviously the economy since WWII has relied on this increasing consumer driven spending and so it has been successful promoted by advertisers and Governments.

I personally have changed my mindset about spending in the last year but it's taken a pandemic to get over it and even now I find myself very easily diverted back into old spending habits...

Hmmm there will always be people who live above their means but I don't think people who do are the exception. I dont personally know anyone with credit card debt or loans other than for mortgage and maybe car.

One thing that does always amaze me is how many sensible people with no other debt go and get the absolute maximum mortgage they possibly can. I guess a big house just isn't a priority for me but we could have borrowed 480k if we wanted and instead we bought a small 1940's terraced city house with a 131k debt (we also got lucky buying 5 years ago when prices were cheaper). We prioritise having a good lifestyle outside the house, loads of nights out, fancy dinners, afternoon cocktails, exotic holidays and never worrying too much about money....I know our friends wonder how we can afford our lives but we can because we're spending 800 a month less on mortgage than most people in our city!

@the80sweregreat

I don't think people do anymore. When we were first married end of the 80s we were on the bones of our bums financially with second hand furniture and about 5p left at the end of the month. We had nothing much. When I see newly weds now they seem to have it all straight away! I guess expectations are higher these days and I did get some funny looks about our second hand sofa, but I wasn't prepared for more any debt until I could afford a new one. Already had enough to pay out for! There is a lot more ' keeping up with the Joneses' going on I suppose now?

This is so true. We got married in the early 80's and almost all our furniture was knackered hand-me-downs from family & friends.

We can’t save any money as we use every last penny of wages each month on just living and paying bills.

I would love to be able to save but it’s just not possible.

Saving for the sake of saving when we are going towards negative interest rates make no sense either.

Why do people know so much about their friends and families financial situations?
No one except DH and I know how much we have in savings, how we financed our boiler, how much we put down as a house deposit, how we pay for our car etc. It just isn’t something we talk about. Equally I don’t know the ins and outs of my friends’ finances.

One thing that does always amaze me is how many sensible people with no other debt go and get the absolute maximum mortgage they possibly can. I guess a big house just isn't a priority for me but we could have borrowed 480k if we wanted and instead we bought a small 1940's terraced city house with a 131k debt
Tbf I think most people would rather not borrow so much but are limited in their options. We have a big mortgage but it's manageable.

I've never had one penny in saving for a rainy day (because I'd spend it when it wasn't raining on something I've convinced myself I wanted/needed )

Instead I over pay the mortgage and use my credit cards when it 'rains'

"We prioritise having a good lifestyle outside the house, loads of nights out, fancy dinners, afternoon cocktails, exotic holidays "

How is that going in lockdown?
Honestly, I think that for many people, having as big a mortgage as possible is the ONLY way to buy property as it's so expensive in relation to income.

how many sensible people with no other debt go and get the absolute maximum mortgage they possibly can

gamble that always paid off when the market has risen non stop, and we ended up in the nicer house we could afford.

Forward a few pay rises, it was totally worth it. We would have wasted such an opportunity and would be stuck in a property too small now.

Our friends all had money when we didn't and that was tough ( mixture of inheritance, rich parents etc) our parents didn't own property or even a car! They couldn't understand why we didn't have much to start out with.
Most of these people we once knew are now probably millionaires, a lot of the wealth being generated from houses bought from the council!
( yet another thread!)

I don't know anyone without a big mortgage tbh.

We moved to our house 15 years ago and have almost all the same furniture that we moved with.we bought a few things like a dining table as we had come from a flat and didnt have one, and beds for the kids etc. When my sister moved we gave her a bed (we had bought a child bed and got rid of a double bed) and she had lots of second hand things, including a sofa my parents were getting rid of.i think she said she only bought 1 new item of furniture.
Almost everyone I know who moves house now, buys a house and then orders all new furniture at the same time. I've no idea what the "normal" thing is and never really thought about how they pay for it, more just surprised that you wouldnt keep the furniture you already had.
On our local fb page people seem to sell a sofa that they bought a year ago because it doesnt go with their new colour scheme etc.

The thing I like to ask myself or them is despite all this materialistic world bs are you truly happy?
Cos I'm not being funny as long as I have the bare necessities I would be happy living off grid on a remote island with my family and a few pets.. in regards to an income of be a handy man and lived off the land growing my own fruit and veg, I'd have a guitar to keep the creative juices flowing but yeah I have no need for fast cars and all that jazz

I don't think people do anymore. When we were first married end of the 80s we were on the bones of our bums financially with second hand furniture and about 5p left at the end of the month. We had nothing much
When I see newly weds now they seem to have it all straight away! I guess expectations are higher these days and I did get some funny looks about our second hand sofa, but I wasn't prepared for more any debt until I could afford a new one

This. We ate off of cardboard boxes and slept on the floor 20 years ago whislt eating noodles and beans and bread for weeks 😅

Tbf though everyone I know with big mortgages & 6 figure incomes still buys 2nd hand or has family cast offs & drive cheapish cars.