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?

@SpidersAreShitheads oh some people do want to keep up with the jones or even BE the jones. I suppose it’s away of stopping people from sneering at them, and showing that they are just as good as the Jones’s. A combination of insecurity and indirect bullying maybe.

I think different people have different priorities tbh.
We're quite frugal in some ways so we don't have to be in others.

Other than my work colleagues and DH there is nobody else who has a clue how much I earn. Most other people living in road and locally probably earn about 1/5th of my salary yet many of them spend far more than I do on holidays, cars etc.

I never understand these posts. My neighbours have no idea of what I earn but I know what they earn!

I think most people I know live within their means. A lot of my circle aren't British and have very different attitudes to debt.
Then there's so people who can't live within their means, and have spiraling debt on basic necessities like car repairs or new washing machines.
We have a fairly large amount of debt, but even more in savings. DH got a promotion recently which we've been saving the difference, but that's about to disappear on the mortgage increase.
I do notice though, among my peers (young millennials) lots of us struggle to come to terms with the fact that we can't afford the same lifestyle our parents had!

This "doing well with house price growth" is a chimera. It's the same house with the same or increased running costs, just a fancier price tag. Until the mortgage is paid off that makes little difference. I would like to reply to all the "ooh, you house owner are all so well off" with "yes, I'm sure I will be able to pay my heating bill with a few bricks or roof tiles, what with all the wealth my house price increase has brought"

Thsts rubbish. My in-laws house which cost about 40k in the 80s & sold for 1.6m some years ago definitely bought them & DH & myself wealth (helped us on the ladder).

I know what jobs they do because they’ve told me. They have no idea what job I do.

I know what jobs they do because they’ve told me. They have no idea what job I do.

They could be misleading about their jobs, DB does that & a friend says she’s a solicitor which she is. However she’s a MC partner on 7 figs.

Plus how do you know where their money actually comes from in terms of spending? My in-laws gave us their “old” car recently. some of my neighbours are probably assuming our 25k car is on finance.

I live within my means and try and save a little each month (and it is a little), but my circumstances changed quite dramatically and I'm also a single income household now so I have no choice. I actually prefer it in some ways. No debts (apart from mortgage) and I love searching for a bargain. My whole mindset has changed to how it used to be. It's much healthier. I also like the sense of achievement if I've managed to save for something. I need to be able to sleep at night.

No, it isn't rubbish. You didn't read my post properly in your haste. Until you sell it's not a liquid asset and can't be guaranteed - increases are highly locality dependent. Your anecdote is just that.

Yes, I think it depends what circles you move in.

I move in the circles of, people dont properly know each other's incomes.
Lots are self empolyed, so difficult to tell.
I suspect they have good years and bad years.

This is not the case in my circle.
But the increase on costs in everything is making much more difficult to save for emergencies, let alone holidays and treats!

I agree with that. Many if not most people just think why am I slogging away 40 hours a week if I can’t have a couple of holidays of year and a car/house etc I really want?

And in the past 15 years with wage suppression, out of control house prices and rent and increasing students loans & transport costs have left many people under 40 in a difficult position unless they have inheritance or in a particularly high earning career like banking.

So they go after the lifestyle they want even if their salary doesn’t afford for it as they don’t see things getting any better. And with the world looking increasingly dismal you can see why people do go after these big or little pleasures.

I didn't have financial education in school either, but I do remember this from Mr Micawber in David Copperfield: 'Annual income 20 pounds, annual expenditure 19 [pounds] 19 [shillings] and six [pence], result happiness. Annual income 20 pounds, annual expenditure 20 pounds ought and six, result misery'

We have always lived below our means. The main thing is we remained in a 3 bed semi, by the accident of our birth years we bought at an ok time. This means we had a lot of disposable income to save and invest and to also enjoy ourselves. Those investments did really well over time. We have definitely done far better than would be expected on our wages. Right time right place investment wise. We will both be retired by 59 and our income at current projections if investments remained doing so well but who knows let’s be honest will be really very decent.

@daffodilandtulip of our friends most upgraded to much bigger houses. The running costs over 25 years alone saved are pretty huge.

I have literally no idea what my friend’s means are.

I can only speak for ourselves and we definitely live within our own means.

I don't think so as over time this would lead to a debt spiral.
I must be living within my means as I have very little debt, some credit cards but I pay these off and run them up again (irregular income) so over time I'm living within my means.

Most people aren't getting into increasing debt via lifestyle choices bar a few. Probably some are due to unforeseen COL crisis circumstances but that's a different question.

I’m not sure it’s always ‘competitive’ or ‘keeping up with the Joneses’ as being frequently suggested. Can’t some people just like having nice stuff because they like it?

Outwardly it probably looks to others like we do.

I work part time and DH doesn't earn tons.

In reality we have a very small mortgage compared to our house value and as such our payments are very affordable.

DC at private school but on bursary/scholarship.

I only have my mum. She was left a lot of money when my dad died and sees spending that on her grandkids as the best use of it. So we have a lot of very nice holidays and theatre visits etc. I'm hardly going to advertise on social media that I'm in my 40s and my mum pays for my holidays.

So don't ever believe stuff you see online. Although better mum than me shoving it on a credit card which I know plenty of folk do.

We save monthly (not a load but enough) but I'm sure others must think we're burning through cash.

I'm early 40s but financial literacy comes from your family. Mine (DPs) were comfortable but there was a very strong ethos of cutting your cloth, saving and not buying things just because they were the latest thing in. My grandparents gave me weekly 'pay' (£5) up until they died when I was in my 20s, which was supposed to be saved. Debt would have been considered shameful.
My siblings are early to mid 30s and whilst they have no debt other than a mortgage, they live to the max. They all have expensive cars on lease/hire, go on multiple holidays per year, lots of stag/hen dos, and bought houses at the absolute maximum mortgage amounts they could afford. None of them are happy, despite having everything.

Well...a lot more people are "living beyond their means" because the typical "means" of a person who works their arse off is shrinking to the point that people can't feed themselves adequately, let alone support a family. I don't see how pointing the finger and judging people really helps, tbh.

Lots have gone from living slightly below their means, to living beyond them. Thanks to the COL crisis and stagnated wages. There are so many varying factors that puts people into this bracket and it's not because they've made a choice to live extravagantly, so it's not always obvious to outsiders. People have gone from being 'comfortable' to watching every penny. Debts are high and savings are low. It's a symtom of the economy.

No, it isn't rubbish. You didn't read my post properly in your haste. Until you sell it's not a liquid asset and can't be guaranteed - increases are highly locality dependent. Your anecdote is just that.

@Justifiedcheese I did read your post properly. I disagree with *Until the mortgage is paid off that makes little difference & that housing doesn’t bring you wealth. *

My anecdotal evidence can be applied to most of London & the SE for people who bought yrs ago. And anecdotally or not it is wealth.

@Sdpbody where do you live? Obviously not UK or you wouldn’t have the same outgoings as you had in 2016!!!

I would love it if my utilities, food, petrol, car insurance was the same as 2016. And as for those who rent!!!!!!??????

Original poster clearly doesn't live up north then?!
It's a crime not to be frugal where we live, we keep up with the Jones' by bragging over bargains we've found.😄

i would just put it on my credit card.

The idea that this happens more typically in the UK is peak MN.

Well it would seem so actually. In my EU country you cannot pay with a credit card in the supermarket. People use them to book/hold a hotel room abroad for instance.