To wonder how do people afford everything?

[JL642]

Just that. How does everyone afford everything?

Coffee shops etc packed here. Social media full of people doing expensive things.

DH and I ate high earners so I don’t get it.

There is never really a 'right' time to have bought a home. Except to have bought it in the past.

On the whole, over time, house prices rise. But so do incomes. Buy a house now, pay for it over 25 years. Over time, with pay increases and career progression, the mortgage will become a smaller proportion of take home pay.

We bought our first home in 1991. At the time the mortgage payments were about 1/3 of our take home pay. Now we are in the last few years of our mortgage and our payments are less than 1/5 of our take home pay.

Of course we are better off than we were when we started out. But there is no magic to it, just the passing of time.

There is never really a 'right' time to have bought a home. Except to have bought it in the past.

Even that isn't guaranteed - if there is a massive slump in prices you can be left with negative equity.

Or a lot of people use credit cards

We bought our first house at a peak and were then in negative equity for about six or seven years.

We bought the house we are in now at a peak. House prices dropped after we bought. We weren't in negative equity as our deposit was a lot larger but again it was a number of years before house prices recovered to the level they were when we bought.

Home buying is a properly long game. I don't believe in the concept of 'forever homes' but people do need to go into home buying thinking about whether what they are buying will work for them for the next 10 years.

I know there are individual reasons why people may need to move quickly but home buyers need to think it through. What happens if my job and so my commute changes? What happens if we start a family or my mother needs to come and live with us?

Most people are logical but I have also known people who don't think further forward than tomorrow and have found themselves lumbered with a property which is neither use nor ornament. They bought something which suited only their lifestyle in the moment.

Mumsnetters have a very hard time accepting that some people earn a lot.

Look at the way people react to any mention of a six figure salary, like that’s somehow so unbelievably exceptional that anyone claiming to earn that much must be a “fantasist”.

It’s utterly bizarre, especially given that virtually all major professions pay well into those figures after a certain amount of experience, especially in the South East (Finance, Law, Tech, Insurance, IT, Marketing, Dentistry, Medicine, Advertising, Pharma, Headteachers etc.), not to mention business owners/self-employed.

I’ve spotted this, I find it quite weird. It’s always anyone on a high salary is lying, and anyone who can afford stuff is in debt, or has parental help or inheritance. With regular threads on how do people afford stuff. It’s really unusual

I agree, I’m in a very similar situation but my parents were very elderly. I have a life-limiting illnes so probably won’t get anywhere near as old as them.
I will make the best of what I have 😊

Mumsnetters have a very hard time accepting that some people earn a lot.

I don't think this is the problem. They can't get their heads around people having different outgoings and think how much you earn drives your disposable income when there are two parts to the equation.

I have plenty of money but am no where near a 6-figure salary. If you are a normal above-average earner you can be perfectly well off, if you bought a house early, if you don't feel the need to be upgrading your life with bigger houses, luxury brand cars, designer clobber just because you can.

A lot of people live not just within their means but under their means. This means that they have money to spend regardless of whether mumsnet consider their income 'high'. We barely 'scrape' 6 figures between us poor impoverished lambs that we are according to some on mumsnet, and have money to do whatever we want. I don't know what I'd do with 2-300K a year tbh. People probably look at my average house, second hand car, primark T shirts and think I'm not that well off otoh. But I also imagine that I have a lot more money than the majority of the population.

I’ve spotted this, I find it quite weird. It’s always anyone on a high salary is lying, and anyone who can afford stuff is in debt, or has parental help or inheritance. With regular threads on how do people afford stuff. It’s really unusual

So true. The perception that high paying jobs are stressful and involve long hours so these people wouldn't be on MN is always rolled out as well. Utter rubbish.

@Teateaandmoretea

I am often puzzled by what people do though tbh - the constantly upgrading stuff that’s fine as it is.

This puzzles me too, not only the financial "cost", but also the environment costs of waste disposal, recycling, use of finite resources, transport, etc.

We drive two cars, mine is 15 years old, OH's is 8 years old, no plans to change either as they're both fine and current average lifespan of an average car is 13 years. So why do people need to change ever 3 years? It must be costing them a fortune unnecessarily.

Same with mobile phones. OH's is around 10 years old, mine is around 6 years old and even DS (who's into "tech") is 3 years old and he has no plans to change. We're all on cheap monthly "all inclusive" packages costing £10-£15 a month for enough internet, unlimited texts and calls, etc. I cringe when I see clients paying over a hundred per month for their phone contract - just why?

As for laptops, I run my business on reconditioned laptops - currently running several Lenovos which are around 10 years old and bought for a couple of hundred pounds each from Amazon. Perfectly adequate for what we do, they "do the job", fast enough, enough features, etc. When he was younger, son wanted a gaming laptop, we checked exactly what he needed for the games he played in terms of memory, speed, graphics card, etc., and easily found a reconditioned laptop on Amazon that would do that - around £250 as opposed to new gaming laptops he was looking at that were around £1,500 and far too good for what he actually needed!

I find it weird when people get antsy when a poster says that lot of people are living beyond their means. If it doesn’t apply to you then why get so antsy? Yes, lots of people earn a decent six figure salary but the fact is that there also a lot of people living in hock.

There's a whole mix of people out there!

Nobody is ansty. It's the fact that when anyone asks how people can afford XY or Z the response is always "credit cards, inheritance, rich parents" etc. And thats just not the case for the majority.

@Teateaandmoretea

A lot of people live not just within their means but under their means. This means that they have money to spend regardless of whether mumsnet consider their income 'high'. We barely 'scrape' 6 figures between us poor impoverished lambs that we are according to some on mumsnet, and have money to do whatever we want. I don't know what I'd do with 2-300K a year tbh. People probably look at my average house, second hand car, primark T shirts and think I'm not that well off otoh. But I also imagine that I have a lot more money than the majority of the population.

I agree, I'm one of them and so is OH. To the outsider, we would look "poor", old cars, old basic clothes, old phones, simple/short holidays, basic personal grooming (no botox, fillers, highlights, nails etc, etc., especially since I'm partly retired and OH no longer works due to health issues. But in reality, our relatively low income (under average earnings), is still higher than our living costs, so we are a net monthly saver. We could easily spend more, but we just can't see the benefit. But when we want to spend on something worthwhile, we don't hold back, if it's worth it to us, we're happy to spend! It just doesn't happen very often!

That comes with us both having no money for the early years. We both had very low paid jobs at first, and so have always been careful with money, never going into debt (except mortgage), not even HP for cars or furniture. Following the mantra of save and buy rather than buy on credit. That alone must have saved us tens of thousands over our lifetimes in interest, plus shopping around for everything, waiting for inevitable sales/discounts, etc.

But when such a tiny proportion earn over £100k, (i.e. the top 3%) the reason MUST be credit, inheritance, rich parents, etc., mustn't it? The only other explanation being proceeds of crime!

No. The response from some people is "credit cards, inheritance, rich parents" etc.'

I agree that this is a major factor. Huge difference in discretionary income between people who bought a house over 7 years ago and people who bought in the last few years.

Do you think it's only people earning over 100k that can afford nice holidays and meals out? Plenty people on average wages can afford these things depending on their individual circumstances and priorities.

No of course not, as you can see, I was responding to someone talking about those earning over £100K, hence my reply was about those earning over £100k!

@Teateaandmoretea exactly. There are two sides to the equation.

Very recently my income went up significantly (finally got my backside in gear). But we probably look like we are struggling because we got rid of one of our cars and we don't wear smart clothes, get hair/nails done.

We haven't 'upgraded' our lifestyle to match our new income. Instead we are enjoying ourselves helping out our adult DCs and going to antique centres and splurging £20 on a load of secondhand vases for the flowers we grow on our allotment.

Yes, same here. We have a neighbour always playing the "hard up" tail who spends around £100 per year on a couple of hanging baskets each side of her front door.

We make our own, re-using the baskets themselves which we bought probably 20 years ago, we use moss we've raked from scarifying our lawns (neighbour pays for a lawn maintenance firm to spread pellets over hers!), and grow our own plants from seeds in trays (again we've had 20+ years), or cuttings from our garden, so basically, the "cost" of our hanging baskets is pretty much zero, maybe a few pounds on a a couple of packets of seeds if we want a change from the seeds we've collected from last year's flowers!

Neighbour works less than us so it's not a matter of time or being busy, etc. She's just in the habit of spending and too lazy to do things herself and being totally disorganised and chaotic meaning she'd never actually plan ahead long enough to actually grow her own plants from seed! Of course, she just disposes of the hanging baskets each Autumn, so new chains/baskets every year, not helping environmental issues at all!

And in 7 years time those people buying now will likely have had some sort of wage increase so their discretionary spend will increase. Living costs will go up but if interest rates don't change then the proportion of income going on mortgage goes down.

Throw in a bit of career progression and a person buying now will feel poor now but in a few years time will start to feel more comfortable.

It’s a really common belief on MN though.

It’s like people can’t imagine a woman (usually - I know there are men on MN too) earning hundreds of thousands of pounds, but plenty of women do. There are whole professions which are now dominated by women at entry and middle levels (Medicine, Law, Dentistry) which pay really really well.

Perhaps many MNetters are stuck in the past and can only imagine a working woman as a nurse, childminder or secretary?

In any case, it is utterly baffling.

I don't have a huge income far from it, but I can afford to go to coffee shops when I want to.
You say you are a high earner so I assume you have a lot of outgoings?
I don't spend money on alcohol, nights out, expensive holidays, petrol, make up, clothes etc and I no longer have a mortgage. But I don't deny myself things if I want them and I spend a lot of money on family.

Even that isn't guaranteed - if there is a massive slump in prices you can be left with negative equity.

Only if you plan to sell in the near future. Eventually house prices inevitably go up.
If you plan to stay where you are for a long time house prices are meaning less.

@GOW56 exactly. We have been in negative equity or living in a house worth significantly less than we paid for it for about 10 of our 30+ years of home ownership.

It wasn't comfortable in the sense that we were 'stuck' but since we didn't have need to move it was fine.

This is why it is so important to buy with head rather than heart.

Dont buy a renovation project unless you know what is needed to be done and how you are going to pay for it.

Don't pay extra for a view which may one day be hidden by future development.

Don't buy remotely if in a few years time you will need access to schools/hospital/corner shop. Especially don't buy remotely if you don't drive (a MN bugbear of mine).

Lots of people do the above and are then surprised when they have run out of money, the property value has shrunk or they are trapped on a smallholding with no access to anything. Some people even manage all of them!