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.

so many people are now on fixed rates for 5 years that the impact of the increase in interest rates has not affected them yet. This is one of the reasons the increase in rates is not bringing inflation down quickly enough.

you can't make such a blanket statements about a whole region!! Lots of extensions and home improvements happening where we live, and we're having to wait for people to do things on our house because they are so busy.

Why can’t you afford these things if you’re a
high earner?we aren’t high earners but still go out regularly for meals, coffee etc. We don’t have a big house, fixed mortgage and energy, no childcare as our kids are teens. I expect you must be spending your money on other stuff. Plenty of us still have a good amount of disposable income because we never stretched ourselves.

I can’t comprehend how this is even a question. And it’s a regular one too.

they have more disposable income than you op. Either lower outgoings, higher income or both.

Even that doesn’t work because the higher rate tax band kicks in at £43k in Scotland.

@JL642 if you and your husband are both high earners and have very little disposable income then you are spending somewhere.

Perhaps, You have bought a house that was above what was sensible on your earnings. You have more kids than you can afford. Or decided to put kids in private school. You are saving or investing a large portion, may too large as its making life unhappy for you. Your cars are on finance and, again, more than you should have taken on.

Not saying any of these definitely apply. These are examples. Could be one or non of these reasons or a mix of a few.

I'm just into the high earner category based on the tax definition. I eat out, go for coffees and will shortly be having a nice holiday. This is because my mortgage is peanuts and we don't have childcare costs. If we were stuck private renting right now, and/or had nursery fees to worry about, we'd be struggling. I also suspect a lot of people just downgrade a step, so for example rather than 2 holidays abroad they have one plus a weekend away in the UK with a nice restaurant meal.

It's worth noting, as I do think there's a possibility this thread could be a CCHQ attempt to convince us things aren't so bad, that we all tend to move in bubbles. I don't know anyone socially who is doing ski trips or botox because I don't move those circles. Similarly I'm reasonably sure no one I know socially is struggling to buy food. But I do know the latter group through work and the COL crisis means there are more of them than there have been for a very long time. The people who a year ago were just keeping their heads above water with nothing left over have not had pay rises anywhere near inflation and so are now at a point where they've got nothing left to cut back on. If you're doing ok there's a good chance you don't know a lot of them but they definitely exist - obviously you don't see them in Costa because they aren't there (except behind the counter).

I just make bad choices.

I'm fully aware I could be using my money elsewhere, like in my house and adding to savings. I am autistic and have ADHD and I really struggle with finances. I understand the theory but it doesn't quite translate to the real world.

So yeah I have coffee regularly, eat take aways, buy things i don't need and go away on city breaks a few times a year.

My bank is empty give or take £500 right now but you can guarantee next time my money goes in I will be spending it.

Bad choices. I'm completely ok with it though.

Social media isn't real life. Having said that, I was in Greenwich on Saturday and it was bustling. Different priorities I suppose. I'm self-employed there are times I work hard but I relax and treat myself too. If I had to dither about a coffee, nice days out, leisure etc I'd chuck work in and live frugally I mean, what's the point working otherwise? 2 high earners who can't afford treats sounds mean tbh & as if you don't think you're worth treating yourself at times. Contrary to popular belief in MN we don't all put everything on credit cards. I don't need to, I work for my lifestyle and can afford it if/when I have to cut corners then I do.

More like £3.95-4.95 round here.

I go most Fridays because I take a (affluent, retired) friend shopping (she can't drive), and she insists on treating me to coffee in lieu of fuel.

I know what you mean OP. Expensive holidays are the main thing that I’d love to know the secret to affording.

There is no secret. You either earn more, habe lower outgoings or both. There is no secret at all.

Honestly don’t look at social media - most of what’s on it is not a representation of real life it’s a snap shot to make people look good

Most of my pay rise which puts me in the higher tax bracket has absorbed the cost of living! So as a unit Dh and I are still maintaining what we would consider an ok lifestyle 🤷‍♀️

Depressing as it is

I’ve never had a “take out” coffee in my life and don’t go out for coffee and cake. In fact, these days I don’t go out to eat much at all, perhaps lunch with a friend every 3- 4 months. It’s seems such a waste of money as I have very little disposable income. On the other hand, my 3 ds’ all live at home. Ds1 and ds2 give me money towards food and utilities and everything else they earn is disposable income so they often go for coffee together or with friends. Ds3 (16), at school, works 18 hours a week @£11.50 an hour and does a lot of “studying” in Costa, on his own or with friends. So some people can easily afford it.

I also suspect a lot of people just downgrade a step, so for example rather than 2 holidays abroad they have one plus a weekend away in the UK with a nice restaurant meal.

Definitely. This is what I meant earlier when I posted about how some spending that you'll see is actually evidence of reduced income, because it isn't a zero sum game. Very few of us would be paying enough attention to other people's social media to notice whether a particular activity represents a downgrade or not.

@Beezknees put the excess of £6000 into your pension, unaffected by UC. I put everything i earn over minimum wage into mine.

@00100001 ·
You're high earners but can't afford £2.75 for a coffee??

What are you spending your money on??

Well how I understood it, they were asking how other people afforded it. Not them. Perhaps they never buy coffee outside anyway!

I assume that you live in a wealthy area of the country OP. I do too. The 'cost of living crisis' is invisible around here. Everyone is carrying on as normal - holidays, beauty treatments, meals out, days out, nice food, etc. You're a high earner yourself, so you know that you can still afford those things - well so can lots of other people. I don't see anyone around where I live going without, but in the rural area where my parents live apparently it's very different.

NO the reason increasing rates isn''t working and bringing down inflation quick enough is due to the fact that the two were never linked.

Higher interest rates wont bring down inflation so long as we have super high expensive energy.
ECB rates are lower as is inflation across the Eurozone.

Business has to pass those costs on & the UK has the most expensive electricity in the world atm, no one seems to care, so i suspect people have a lot more money to spend than we might have thought.

Out of interest OP why are you wondering about this?

That’s completely different to coffee and cake and I would imagine it’s due to the way people were raised and what they’re use to. Rich kids who go on ski holidays w their mummy and daddy are going to want to continue to that as they get older. I don’t know anyone who goes on ski trips.

But it's it the same people doing everything?

We might take all the kids for coffee and cake but our holiday is a cheap one to Wales. I save the fre drinks for alone time. I've used my Tesco points to book bowling and a meal at the pub. I'm having Maccies bfast RIGHT NOW but mainly on the points collected from the odd trips with the kids. I don't wear make up. I don't smoke. I don't drink regularly. I don't have expensive hair cuts or nails etc. I do love the theatre so thsts my indulgence

I live in a nice area of London. There seems to be no difference in people's behaviour here. Restaurants booked for weeks ahead, theatres full and shops rammed with people. I'm sure it is very different across the country but here people have the spare income to absorb the increasing cost of living and are just saving less I guess.

The mortgage increase part is a good point though. It's only a minority of the population who are currently affected by that. People who own outright, those in SH and those paying mortgages that were obtained before mid 2022 and have a while left to go just aren't affected at this stage.