To think most people I know live anove their means?

[PrincessBananaH]

I just came across a statement that really got me thinking which is that, essentially, you should always live below your means in order to be financially secure. It’s a pretty simple statement but I don’t think many of us follow this in life. Most people I know are trying to keep up with the Jones, stretching their mortgages to almost unafforable amounts to buy bigger houses instead of being happy in a modest home, going on lots of holidays and dinners out etc.
I am trying hard to save currently and with lots of family expenses and childcare I often think we’d be better off living below our means in the future years to keep building more financial stability, however I find it hard when everyone around us is trying to “have it all”.
AIBU to think most people don’t want to live below their means?

I don’t think anyone here can make an assessment of the people you know, who they presumably don’t.

Most of the people I know, do. But most of the people I know are also of high means, which makes it a lot easier to live within them than if your means are a lot lower.

Most people in my circle live very slightly below their means I'm guessing.

Theres definately been a reduction in holidays and socialising in my group.

You can only live above your means for so long, it's not sustainable long term.

If you look at the profile of debt and savings in the UK then yes most people are living at or above their means.

Nearly everyone I know does and I used to, a male colleague of mine just committed suicide because the debt got so bad. He was 52.
I used to be in awful debt but I sorted myself out. i have paid it all off. Binned my credit cards. I own my own modest home and I'm saving around £700 a month for my future.
If I want something I save up for it. I'm 100 times happier and have time and energy to indulge in all my hobbies now.

I don't think I know anyone who does (but I am surrounded by accountants so there is an emphasis on being careful with money!)

I think most people I know live above their means. I live below mine, as do a few people, but everyone else I know seems to love spending. I even know some really high earners but they still spend everything they earn and then some.

We live below our means so we can save. No debt except mortgage. Thankfully we are both of the mindset that living beyond your means brings unnecessary stress and worry, so we’re comfortable.

I can’t think of anyone I know who lives above their means. Apart from mortgages they don’t have any debt (cars either company or bought outright) and budget according to their income.

It's strange isn't it, that we're all so obsessed with spending and buying unnecessary stuff here in the UK? It's like a kind of addiction. There was many times when I was younger when if I wanted something i couldn't afford i would just put it on my credit card.

I do think today though, people are a bit more careful.

In my circle most live at or below their means, only one couple lived above, and they’ve sorted that now childcare is out of the equation.

debt profile doesn’t really give an indication, debt can be perfectly within your means, particularly with interest free credit meaning it’s often more prudent to use that and keep the money earning interest in your own account.

Times have certainly changed, that's for sure. When my parents were young (40s and 50s) it was pretty uncommon to have foreign holidays. It was the kind of thing rich people did. My mum was poor and had bread and butter for dinner every night. All her clothes were taken from bins (her dad was a dustman). Very few people had cars or televisions. My dad's family were the only people to have a TV in their street. It was a new technology and seen as a real luxury.
When I was growing up in the 80s people were starting to have package holidays in Spain etc but still most people I knew were going on UK holidays. A lot of us wore clothes from jumble sales and it seemed to be a struggle to make ends meet.
These days it seems many more people are jetting off to Disneyland, Florida, everyone has several huge TVs in their houses, everyone has i-phones, branded gear etc. On the surface it looks like people have a lot more money than they used to.
But then at the same time people are struggling. The cost of living is beyond the means of many, people like teachers and doctors are going to food banks! I'd never even heard of food banks when I was growing up.

I can't either. The few friends I know well enough to know their financial situation are all VERY strict about debt vs. income, as are we.

Interesting to see the differences depending on social circles.
In my circle (mainly colleagues I have to say, friends seem to be more mindful of their spending), going on fancy holidays x3-4 times a year, owning a big house (we are in London where property is incredibly expensive), having designer bags etc is almost seen as the norm. The other day one of them was saying how broke they are after overstretching to buy the biggest house they could afford and fancy furniture, yet they wanted to buy a car asap and her DP was only going to be happy with an SUV from a luxury brand (he wants nothing less than Audio, Mercedes etc). I think it's nuts!

@Gettingbysomehow so sorry to hear about your colleague💕

It's funny, I definitely notice more of a 'competitive thrift' culture among my circles in the UK compared to friends back home (California, US). Most people I know here are still stretched, but in a temporary way due to life circs (London professionals with young children so childcare and housing costs at maximum), rather than the luxury splurging you're describing.

DH and I are both natural savers and would be miserable living above our means. Honestly I would get no pleasure from an expensive holiday or designer item if I knew I had gone into debt to pay for it.

The issue with people my age (mid 30s) is that we had absolutely 0 financial education and then graduated into a financial crisis. Pair that with wages going down in real terms while inflation climbs, I think it's going to look to an older generation like we're financially incompetent. But I definitely think there's a sense of living for today rather than saving up for something you'll never afford, ie a house. There is a definite lack of understanding, too, though.
'Afford' is also subjective. I would say I can't afford to go on lavish holidays, which I'd love to but don't prioritise, while some people I know do and ask me why I don't. But then we got the bigger house, which you've cited as being proof of living beyond our means, whereas we did that because when we bought it was a good idea to buy at the top of our price range, we got a 10 year fixed mortgage at a low interest rate, and while friends of ours want to upsize to fit in their growing families, they can't, whereas we don't need to.

However, I will never understand the friends or people in general who get themselves a very fancy new car with a huge monthly repayment. That to me seems bonkers but again, priorities.

Technically, anyone who has a mortgage is living above their means, as they have to use someone else's money to buy their property. If you have a loan for anything, you're living above your means. It's very common of course, but not so bad if it's manageable.

We are retired, but we always made sure we had six months money in the bank, we cleared the mortgage ten years early, still had our wine and beer, (don’t smoke) lunch out twice a month and a holiday once a year where all bets were off, i.e we did not scrimp on anything.

We retired with no debt and no mortgage and we didn’t suffer in the interim. So I am guessing it is horses for courses.

It’s whatever makes you content though, isn’t it? We lived for a few years in absolutely ridiculous places to save money then ended up poor poor anyway and I absolutely regret us being in a tiny draughty damp shit hole . Sometimes it has to be a case of fuck it, let’s get into manageable debt and feel a bit better about the everyday because otherwise why are we going though the grind, running everywhere, being stressed and tired.

I live below my means. I downsized so am mortgage free, don't have a car, no credit cards, student loan paid off. No debt to my name. It wasn't always like that though, it's just that I have managed to reach an age where I have had time to acumulate enough to live this way. I couldn't possibly have done that in my 20s or early 30s. It's a priviledged position to be in and only possible if you have at some point made enough to be able to invest wisely and paid off debt.

You only have to look at some of the"income" threads on here.
People saying: "Your outgoings increase to march your income"
Only if you let them.

You say most people you know live beyond their means, and nobody here can say if that’s true or not as we don’t know them!

I don’t, and neither do my friends (Gen X) My Gen Z adult DC don’t even have credit cards, and just live on soup if they run out of money before payday.

I think for Millennials it’s hard because they’re at the stage where your expenses are high and you have access to credit which must be tempting.

I'm in my 60s, and and have never lived above my means. I never had a car or a foreign holiday till I was in well into my 30s and lived modestly. When I bought my first one bedroom flat I furnished it with secondhand stuff other people gave me. I preferred that to being stressed and in debt and I was very happy.

Now I have a decent pension and a paid off mortgage on a nice house. Deferred pleasure suited me but I know it's not for everyone and many prefer a 'Live now, pay later' attitude. Trouble is, it has to be paid for, and with interest.

I suppose it depends on the kind of circles you run in.

I mostly know people who live at/below their means. I know a few wealthy people who save and still have nice things because they have and make a lot of money and are careful with it.

The other people I know live to their means because they don't have money. So buy the essentials, no holidays, save up for a day out, christmas/birthdays or new peice of furniture but no actual savings due to not having money to save after the essentials have been paid for each month.

I only know one person who lives above their means, I have no idea how they do it (honestly could be some sort of illegal goings on) they're often on holidays and buysing new clothes, new toys for the kids stacked to the rafters. Only one of the couple work and they're self employed and have mentioned a lack of clients.

Through the grapevine I've heard that they haven't been able to pay their rent but the same time I heard that one of the couple was talking about the holiday they just booked and splashing the cash on new stuff. Their lifestyle makes me very anxious so I try to keep out it. God knows what will happen when it all comes crashing down.