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?

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@PrincessBananaH

I think the problem is that human nature is to want stuff - we are socialised like this by mass media and advertising. There is a lot of social status associated with items - from designer clothes to the car you drive.

Wherever you are in society economically, you will be associating with peope in a similar band to you and you will be in contact with people a little bit ahead.

So if you can afford a small private jet, you will be associating with people who have a big one. If you have a big private jet, you will be associating with people who have a super yacht and so on.

This propels people to try to 'keep up' in order to fit in I think - hence pushing the boundaries of living beyond their means.

It would be interesting to know whether if you took a person with a comfortable middle class income and put them to live in a poverty stricken council estate forcing them to only socialise with those there, what would happen to their spending. I bet it would drop because they wouldn't want to stand out and not fit it.

@InstaRam I have seen this and also felt it a bit. It can feel a little like having someone running along next to you saying 'keep up, keep up' all the time.

Doing something different, not buying particular brands, not going on particular types of holiday or even simply not buying a coffee when everyone else is, can mark you out as not being quite part of the group.

Some people might perceive this as criticism of the group. In some circumstances that may be fine, make different friends. But if these are work colleagues, this can mean not being seen as a 'team player'. Which is bad for work prospects.

Obviously we have a different idea of financial daftness.

My last paragraph was quite clear that if you have the money and can put it to work for you during the interest free period of your phone/car contract, then go for it.

Lots of people can't afford a £700 phone outright and get it on credit. They manage to make to monthly payments so feel they can afford it, even though they are living above their means. Countless instances where people then lose jobs/ have an expensive emergency come up and can no longer make the payments. They accrue interest, tank their credit scores, etc

50k car on credit? That's a depreciating asset, ie bad debt. So you buy a car you can't afford in order to look good, then spend more than you can afford each month paying it off. Instead of investing that money in a stocks and shares ISA and building real wealth rather than the illusion of wealth.

Now that's daft. A pretty poor financial mindset. I mean watch any finance guru like Dave Ramsey or Caleb Hammer and they'll tell you that.

Crazy how some people think it's smart to live a debt lifestyle.

@RiderofRohan things like car leases can be very much forced on people. Possibly depends on where you live but where I live a lot of middle management jobs come with car allowance.

Sounds good, yes? Except that the allowance comes with restrictions on age, size, emissions etc. of the car. Of course you could choose not to take the allowance but that will be career limiting as no company cars available and you will still be expected to do the miles.

A friend of mine lives way below his means. He is going to Madeira soon. Has a fair bit of savings so can justify it. However he is planning to take his spending money out of his state pension! Some months he has £300 spare which he saves out of it plus his monthly lock up shop that gives him £100. An example to us all! Fixes his car himself and lives mega frugally.