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.

WTF? No, of course not. We earn well below 100k, have no credit no inheritance no rich parents, and we aren't criminals.

I think @taxguru was being ironic!

I'd like to think so, but there is no indication of it and its the kind of thing people say fully meaning it on here....

Why on earth do people assume because they can afford holidays and days out they must be a high earner.

2 people on 33K with 1000 housing and 1000 bills and food would still have
1.5-2K disposable income.

And by the way I am pharma: starting wage is 20K
I am 33K with 27 years experience
It is not a high income job

The definition of high earner is a strange one. After tax and bills + inflation backdrop you really need to be earning 50-70k minimum to have a comfortable life in London. And makes it easier if you have a combined household income of 100k+

I didn’t assume that.

I was making a separate point about how so many MNetters seem to struggle with the concept of high earners when there are literally millions of them in this country, plenty of whom are women.

To your point about holidays and days out, I completely agree. I managed to do a hell of a lot of travelling in my early twenties when I was being paid a pittance as a trainee. It’s all about what one prioritises.

There's huge income in pharmaceutical companies for a lot of people though. My husband works for a big pharmaceutical company and all his close colleagues are on very high wages.

I think some people struggle with the idea that their experience is not everyone's experience.

Salaries are huge in the right roles and they pay for external consultancy at rates of up to £350/h

I would just like to point out that student loans are apparently counted into that debt statistics.... So it can be no surprise how massively it's gone up in last years ...

The problem is the whole prevalence of doom and gloom. Cost of living, fuel prices, Brexit, businesses closing, high streets failing, lack of houses. Clearly it’s a catastrophic collapse

Anyone who says different and that’s it’s just what economy does; shit bits and ok bits is a complete bastard.
And yet… we all see that the roads are busy, people are still going on holiday, buying clothes and having coffee and cake when in town.

We had the 80’s with huge unemployment, 90’s with sky high interest rates, a massive economic crash in 2008.

perhaps people just cannot accept they are poor?
https://www.bbc.co.uk/news/business-65308769

Like many others have said, you can't assume that people have money from what they spend. I am a decent earner and my partner average and we're on a combined income of about 75k. We are saving a deposit to buy a house so scrimping a lot, no real holidays, rarely get haircuts, no beauty, no new clothes etc. My friend is single and flatshares although her rent is more than ours. She earns a lowish wage but goes to the gym, buys new clothes, goes to concerts. On the outset she looks like she has money but she's in a huge amount of debt instead. Looks can be deceiving.

Huge debts aren’t a problem if people or countries are paying it back though. It becomes a problem when they can’t. When property is worth less or defaults happen. If there’s jobs going spare and markets move it’s just money changing hands.

A 2022 Credit Suisse report found 5.4% of UK adults are millionaires - that’s nearly 3 million people, or about one in 20 households.

So yes, a lot of wealth, and many of these families have received a lot of support from families to get where they are (eg getting on housing ladder).

Where I work I see people on the same salary, with exactly the same career trajectory, who have massive differences in lifestyle that are explained only when you get a sense of the family wealth they have or don’t have.

The UK is very unequal!

For the last few years, I’ve had to give up work to retrain as I have fibro & it limits how much I can do. Basically working & completing my MSc & work placement was going to be too much, so I gave up work.

Despite the fact that I’ve not worked for a few years, we’ve still been able to book a holiday. We’re going during one of the cheapest times of the year, so we’ve paid £1100 for a 7 night cruise with all food & upgraded drinks package. It’s in Northern Europe, so we don’t intend on spending a lot on trips.

I used to be a teacher & we could very rarely afford to go on holiday, despite me earning a decent wage.
You could ask how are we affording to do it now?

I have a side hustle selling skincare online. I don’t make loads, basically enough to give me day to day spending money & to save enough each month towards a holiday. We decided to use my student loan to pay our mortgage whilst I’m not working & put my tuition fees on a 0% credit card & only make the minimum payment. When I’m earning again, the tuition fee debt will get added to the mortgage.

However, we have made other sacrifices as we don’t very often go for days out & we normally would’ve upgraded hubbies car.
Our only debt is the mortgage & my tuition fees. We’ve never bought things like furniture on credit. If we don’t have the cash, we don’t buy it until we do.

We also live in Stoke-On-Trent which is a really cheap area to live in & our mortgage is really cheap (interest rate is 1.98% for a 5 year fix) as our LTV is less than 60%.

We’ve also decided that for us, my tuition fees going on the mortgage is justified. Some people would disagree with that decision.

Travel is really important to us. We haven’t travelled since 2019 & so we decided that spending £1100 on a holiday was a good use of ‘spare’ money (that we didn’t think we’d have when I stopped working) because of the positive mental health benefits.

Just looking at wages isn’t enough.

Where I work I see people on the same salary, with exactly the same career trajectory, who have massive differences in lifestyle that are explained only when you get a sense of the family wealth they have or don’t have.

We have similar differences at work. Eg me and colleague who is actually on 2k more.

I own house (mortgage tho), go on 3 foreign holiday/trips on budget, uk city trips +1 foreign family visit every 2 years. Not really branded stuff. Very into vinted🙈 Going out for dinner or drinks few times a month is no issue, plus have savings.
Her, 1 foreign holiday, own house (mortgage), branded clothes, doesn't go out for drinks but happy to join for dinner, some shopping trips within uk.
Yet she keeps doing that wide eyed "omg how can you afford all that going abroad😱 is it loans or something? I am too skint for that!" Tbf I wonder the same about her shoe collection when she says this😂 Then i remember that it's simply priorities.
Branded clothes vs travel, 100k house vs 400k house, drinks vs eating out.
It is often simple as that.

Last sentence missing.
People who live ok don't have to come from wealth. I am on below average salary! No family wealth here

@moogle87 Out of interest why are you paying back student debt if you don’t earn enough to meet the threshold? It’s only ever a percentage of earnings rather than interest accrued so it doesn’t work like a credit card or loan.

I always think of my parents vs my in laws. Very similar public sector jobs and salaries. My parents very rarely spent money on eating out, expensive holidays, new things for the house, we didn't get many regular treats or presents when it wasn't birthday or Xmas. We had music lessons and other activities though, they bought a holiday cottage and contributed to all three of us buying our first homes.

From what I understand in laws have always been spenders: lots of meals out, presents for DS weekly, new clothes every time we see them, can't pass a shop without going in and buying something etc. They had the flashier lifestyle, but in retirement they have a small pot to live on, the value of their house as their only asset and no investments.

I'm simplifying, but a lot comes down to what you choose to spend it on.

You're looking at tiny snapshots of people's lives. Maybe the people on the ski holiday budgeted strictly for a year to save money. Maybe the people who eat out every week have paid off their mortgage or are in terrible debt. You need to look at the big picture but of course no one is ever going to give you a detailed breakdown of the salaries and monthly outgoings.

I also think it depends on if you have stayed in a long term relationship. Divorce is a killer financially. Having to start again later on in life can mean people cannot afford to buy a house. Lack of financial support from the NRP and/or lack of physical support in terms of not stepping up to look after the children can cripple a lot of people.

Very true.

There are still lots of people that are doing completely fine despite the ‘cost of living crisis’. I’ve not actually noticed anyone I know having to make any changes. Ski holidays to Canada still booked, house extensions going ahead (I know of 7 currently!), pay rises, private schools etc.
Expensive cocktail bars still packed, Botox and expensive hair appointments. NHS dentists closing and people just paying for private because they can.
It does surprise me to be honest.