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?

It’s an interesting question but one that I cannot answer as I do not have a clue how much my friends/family earn and whether they live within their means.

No-one in my family lives beyond their means but we grew up with parents who juggled credit cards (it was shit, the stress and the fights were shit) massive amounts of debt is stress inducing for all of us. I just couldn’t do it to myself, there nothing I want so badly that would be worth it to me.

I think tbf it’s easier as well on a higher income when you can comfortably cover your bills and enough disposable income to do what you want. We have money left over because we just don’t use it and I’m extremely grateful thats the case because it definitely isn’t how I grew up.

But maybe their partners earn more? Or their mortgage/ outgoings are less?

I hate this kind of judgement.

After finishing university I had a job with a very low wage, but I had plenty of disposable income due to low outgoings.

A friend of mine (27) has just bought a £650k house on two mortgages and is working every hour under the sun in overtime to afford it. It's just the two of them and they don't want kids so I'm confused as to why they need the 5 bedrooms 🤔 one is a "makeup" room, one is theirs, one guest room and they don't know what they're going to do with the other two. They have a separate office downstairs.

I can't wrap my head around why they're paying a massive mortgage on rooms they don't need...

Noticing something isn’t the same as judging. What am I meant to do? Shut my eyes and stick my fingers in my ears. I don’t care what they do.

I'm certainly amazed at what appears to be affordable on the average wage. The contract hire cars in particular. That's £600 a month. We designed our lives and our mortgage around it being affordable with one income, but with cost of living it's increasingly hard even on a food income. So we're...upsizing 🤷

Ditto here where I'm from in Wales, well in my small circle it is anyway!

I'm on a very low income - benefits with no extra income from DS father who I haven't been with since he was a toddler. I buy yellow stickered items from the shop, don't drive, never been abroad and mostly buy clothes from charity shops. Weirdly people seem to think my life must be miserable but whilst extra money would be nice I don't know what I'd spend it on to be honest. We have enough to get by and I know that whilst we have food in our belly, clean water, a roof over our head and clothes on our back and are able to pay the bills that means we're living some peoples dream life which is strange to think about but keeps me grateful.

There are a few people I know who live beyond their means, all with way higher disposal income than me, and it honestly baffles me when they moan about being skint all the time when they're buying brand new clothes all the time, holidays, out every weekend etc yet spend most of their time complaining they have no money. 🙄

I live above my means because I want to have nice experiences to look forward to as a pay off for working full time. I am very easily tempted into buying things and going places. And I hate cooking so I buy way too many takeaways. I do feel guilty though at the same time. But that little voice is always saying ‘f*ck it” “life’s short” “you only live once” etc etc etc

I honestly would have no idea whether people around me are living above their means, and they wouldn't know whether we are either. Generally the people I know have good professional London salaries but it would be hard to guess their salary based on job title. Nobody talks about struggling financially and most send their dcs to private school.

I dislike the assumption that people will spend up to their means and that people on high incomes will have the same small amount left over as people on lower wages. We have a high income and have always saved a substantial amount, and ignore a lot of spending trends and make large mortgage overpayments and extra payments into pension. But we don't really talk about those aspects of personal finance with anyone, not even family.

To look at us on face value, it looks as if we're in tons of debt. We've just moved to a big house and spent ~£50k on it doing it up. We have a brand new Tesla on the driveway, are around during the day to run errands / attend school stuff (it looks like we don't work). We don't earn more than £40k, like most of our friends and have been to Disneyworld twice in the last 10yrs. I also have around £8.5k owing on credit cards at the moment.

However, I have a flexible, not very busy wfh job, he works shifts. The car is my company car and costs us £0, he can charge it for free at work too. Our mortgage is £500pm fixed for another 3yrs. We are frugal day to day (that isn't seen by most people) and keep fixed outgoings to a minimum, no travel costs, no childcare costs, don't eat out, clean our own house and car, shop at Primark, B&M, Aldi etc and have done for the last 15yrs. This has given us the freedom to overpay mortgages so we could move houses with a lot of equity and to save up to pay for our reno with cash and pay for Disneyworld (we don't plan to go back though, it was for the kids while they were young). I'm stoozing the credit card debt it's all on 0%, I have the cash sitting in a 5.2% account earning interest for the next 6 months. I earn cashback/ rewards or interest for every penny I spend, our monthly direct debits earn me £9pm, I earn £15pm from one bank in rewards by moving money into our savings. I'll open a new savings account if a better interest % appears. We do the bank switch offers and have earned over £1000 between us in the last 5yrs.

I'm fascinated by how others spend their money. I suspect that most people couldnt be arsed with all the bank admin or shopping around I do for the rewards.

Complete opposite. We live in a very modest home, nothing fancy. No mortgage. Have one basic family vehicle, again, nothing flashy. Everyone eats well. No expensive holidays, gadgets etc. I read books from my local library. We don't buy designer clothing.

I don't use nail bars, beauty therapists, I don't dye my grey hair, rarely buy makeup. I visit the hairdresser three times a year.
I make up packed lunches when doing day trips, not eating out.

No smokers in the house, although we do occasionally buy alcohol from time to time. How extravagant 😱🤣

Yep most I know do. There's been a LOT of stress lately as people struggle with mortgage increases.

I think most think DH and I are not that well off. In reality we earn a shit load and have 200k in savings and investments and will be mortgage free before DH is 40.

I don't actually believe most of the posters on this thread know the first thing about their neighbours' and acquaintances' finances or would be in a position to know what their means are. I know roughly which of my friends earn loads vs not loads but I couldn't guess a particular figure (nor am I especially interested). I also don't keep track of what they (seem to) spend money on, and I think it's very creepy if you do. And obviously from side hustles to inheritances there are many ways in which someone might seem to be spending more than they earn, but are actually well within their means.

So I judge everyone who thinks they know (and indeed everyone who cares) about their friends' finances much more than I judge anyone for spending money.

Personally I live below my means. I had a bad credit card experience when I was at uni and once that was paid off swore I'd never use one again (which nearly came back to bite me when it came to buying a house, but that's by the by). Then I was just very poorly paid when starting my career so I had to learn to live frugally - which gave me a lot of healthy money-saving habits that I've deliberately not broken even as I've earned more.

When I was broke in my 20s I had a lot of luxury experiences so people who looked at my social media might have thought I was living beyond my means. It was all free.

I don't think I'm naturally good at budgeting or shopping around for the best interest rates etc but I don't really enjoy spending money at all. I don't get the whole "you must consume, consume, consume shiny new things in order to make the grind of life worthwhile" perspective at all. I have one or two luxuries that I genuinely love, and now I have money I'll indulge them (eg fancy restaurants), but stuff like flash cars, constant home renovations or even the whole concept of shopping as leisure/therapy... nah. The nature of capitalism is to create false demand and I'm not having it. For the most part the things that bring me happiness don't actually cost much (another lesson learned from my years of being broke, when I couldn't buy shit but still managed to be pretty joyful).

Do people really have a "keeping up with the Joneses" mindset? I don't think I know anyone who does, at least they haven't said it out loud to me. I would think anyone who did have it was fairly idiotic.

" We work all the hours we can to get extra money to buy more and more things to impress people we don't even like".

I don't. Couldn't give a fig about having "stuff". I live in a 2 bedroom flat, no car. Don't want a big house or nice car or private school fees.

I like going on holidays, that's my biggest luxury.

Absolutely don't doubt those people exist, but I can only speak from experience, and I don't know anyone who would be making decisions just to get one up, or to look good.

Certainly I know some folk who care about how they come across on social media, but they don't make financial decisions on that basis. For example, one is very, very keen to look good on Insta, but they have a small (one-bed) house which they've nearly paid off.

When I think of all the people I've worked with, and our social circle, I honestly can't think of anyone who would make major financial decisions for some kind of bragging rights. I think those people are the exception rather than the rule and the majority of people who overspend just get carried away with the exciting stuff they see available to buy!

That’s simply not true, and shows a lack of understanding of finances.

for example we have taken interest free credit to pay for a sofa in the past. It was 5k. Genuinely we could easily afford to pay for it. But interest free meant the money could stay in our account, earning high interest. Thus reducing overall cost. We did the same with the boiler.

debt can often be a prudent financial decision if interest free.

if you incur the debt as you can’t afford the lump sum it’s different, but again, that depends, if for example it’s interest free, and payments of 50 quid a month you can easily afford, it’s not above the persons means.

so it is not as simple if you borrow, you are living above your means, that’s when you borrow and can’t pay back.

We are busy doing the complete opposite. Selling the big house, getting rid of the mortgage and going for a more modest home meaning more to spend on quality family time.

I think there is a shift towards putting more value on experiences than possessions but sadly social media is constantly pushing us to feel like we 'need' a new gadget etc.

We get judged by quite a few people - we've had actual comments made to us - because based on our jobs, people can make educated guesses about how much we earn but our home does not reflect the salaries against what a lot of peoples expectations are. We would like a larger home, but we are more comfortable knowing that we currently have a very easily manageable mortgage and if anything was to happen to one of us, the other would still be able to cover all the costs.

I used to be in debt when I was younger so I understand the reasons people live beyond their means. I just try to avoid judging them now as I can see how easily it happens, even if it seems like they're just making hideous decisions.

I live below my means in order to save, having savings also reduces my stress levels as it’s one less issue to worry about and I know I would be fine if I lost my job etc
If you live above your means you can’t possibly be saving much and are more than likely going to get into financial difficulty eventually

Very few people that I know live above their means, I think sensible people who are secure in themselves rarely do and aren’t concerned with keeping up with the Jones’s …….The Jones’s can spend their money how they please, ifs no concern of mine

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.
Well if you start earning more you may have to get things you couldn’t before- health insurance, having your kids do activities, you get a car or upgrade (because your car was always breaking down) you insulate your house or invest in heating. You might move somewhere you’re not terrified of your kids walking through in the evening. So a lot of the time necessary to afford yourself something everyone should have access to!

I also think people make a lot of assumptions about other people and their finances.

I know people (neighbours, colleagues, friends/acquaintances and family) have made a lot of assumptions about ours over the years, leaked in a variety of ways, that are incorrect. I don't correct them because it is none of their business, tempting as it is at times. One family member told us we live 'hand to mouth'.

I agree with the poster about interest free loans too. We've usually got at least one on the go, despite having easily available money to pay for these moderate (3-10k) purchases with 'cash'. We've got a new car too with some finance on it, again we could've bought it outright, it just made more financial sense to do it this way. Between us we've got nearly £2M in pensions (at 50), haven't had a mortgage for well over a decade - I think that would shock a lot of people we know, the ones who have made the 'comments' over the years at least.

I have always lived within my means

I have always been a saver

However, in life there needs to be a balance between saving & spending

No debts, have savings

Honestly? I think it is less "Keeping up" with anyone and just trying to find SOME joy in how shit and miserable everything is now.

At the end of the day your debt doesn't follow you beyond death, so might as well actually have some happiness despite the governments determination to make life shit for everyone but themselves and the 1%.

People aspire to the wrong things nowadays. I don’t and never have understood the whole competitive splash the cash mentally. A cosy home, nice food, and UK getaways. I don’t need, or want a bigger house. I don’t want more stuff - what would I do with it anyway? Kids are happy as long as they’re active and mucking about with their mates outside. You don’t need to spend spend spend all the time.

And why the obsession with rushing off to far-flung shores and shelling out ££££’s for the short-lived privilege? I personally think the UK is just as, if not more beautiful than a sun-soaked, tourist-ridden rock in the middle of the Med.

Not saying these places don’t have their appeal but people do expect too much these days - and it comes at a cost. People purchasing their holidays on a credit card - just why? I’m pretty old school about personal finances and honestly, if you can’t afford it you can’t afford it. Get rid of the credit cards. Have people lost the art of actually saving for things? Spending ruthlessly does not make you any happier.

While I’m on my soapbox I will also add that I don’t think children are taught enough about money management, including sound financial practices and how they can make their money work best for them. It seems to me such a fundamental life skill - good financial judgement, good awareness, good practice and yet there’s a massive gap in education here.