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?

Technology, flights etc are all far cheaper than in the past, so I don't think you can compare the past with now

But, I think in the past, there was more focus on living within your means and many people lived quite modest lives

Cheap credit encouraged some people to live beyond their means. And for them, chickens are coming home to roost

It'll go full circle soon enough and saving / living carefully will become the norm again

@JustMarriedBecca

Wealthy people are often wealthy because they are TIGHT.

Agree. The wealthy people I know hate spending a dime. They prefer money in the bank to “stuff”

I live within my means- sort of! I do have a mortgage that will be paid by the time I’m 60 but otherwise no debt and I have some savings. My husband would happily spend all our savings on holidays etc but I say we need to keep money back for things like needing a new car, house repairs etc. we have hit a happy balance now I think. He really really wanted an abroad holiday last year and I relented and paid for one out of the savings. Seeing the kids have the time of their lives and having quality family time together made me realise that we do need to live our lives and enjoy ourselves while they are young. Having £££ to holiday together when we are older isn’t better than doing some of it now.

We live way below our means. But because we do, we have alot saved and have a very happy and contented life.

The way I see it....I don't care what others are up to or what they have. But my kid isn't going to care about the fancy house or car.....but he will thank me for all the places we've travelled and all the days out and tike spent together making brilliant memories. Plus I'm sure he'll be thankful for the opportunities we've got lined up for him when older because we saved.

I've never understood why people want to copy/be better than other people 🤷‍♀️

I couldn't care less what car you drive, how big your house is, what clothes you're wearing etc - I'd rather be happy, which most of those types of people aren't.

That's the mistake most people make - not being happy with themselves.

I really noticed this about the U.K. when I moved to Spain. The majority of people I know in the U.K., me included when I lived there, have overdrafts, credit cards, loans (not necessarily all three), whereas here in Spain, very few people use that type of credit, at least not in the way people do in the U.K. for holidays and that sort of thing. People save up for things and live according to their means. The amount of money many people on fairly average salaries spend on holidays and going out in the U.K. doesn’t make sense with what they earn. Also expensive home renovations, furniture, Christmas spending etc. not to mention the money people seem to expect their friends to shell out on hen do’s, baby showers, birthdays etc. You just don’t see that here. Then those same people are complaining about the cost of living, can’t afford to heat their houses etc. It might be more bearable if they cut back on their spending in other areas.

I find some of the stuff posted on here a bit bewildering. The people buying the High end things, houses, cars, clothes, tech, are not the poor. It’s the wealthy, clearly the wealthy like stuff as much as the next person.

and no one gets wealthy as they were tight, you need the initial income to save, if you don’t have it coming in, you can’t save it.

As an appreciating asset, mortgages are different to other debt. You can end up better off by borrowing and repaying. It's not like debt for a depreciating asset such as a car.

Most people I know live nice lifestyles have newish cars, go on holidays, out for dinner , to concerts and shows etc but I've no idea whether this is above their means or not. They or their DH generally have very well paid jobs.

The only people who I know what their mortgage status is are my family. (And I live in a fairly expensive area so even modest houses are expensive compared to other areas)

How do you know everyone else financial situation? They might not share everything with you. They may have smaller mortage payments, inheritence, better paid jobs etc.

I think people underestimate how much other people earn. Someone who works in IT could earn very different amounts of money.

I think people are friends with people like them. If that's how you live, there's a good chance that's how your friends live, but in my circle I really don't think it's the case.

Most people I know have no debt apart from a mortgage and maybe car finance. Obviously I don't know the ins and outs of everyone's finances, but I don't think I know anyone who feels pressure to "keep up with the Jones"

I think that it will depend how you grew up/who you are friends with/who is in your circle.
My family have always lived within our means, helped each other out if needed, never bought a car on finance, only debt was previously a mortgage (but chose a house with a smaller mortgage) and we've always talked openly about finances. We have 12 months+ worth of outgoings saved so if we both lost our jobs, all our bills would be covered for a year and in the mean time it's making some interest- nice if you can afford to do so... but we haven't taken a holiday abroad for longer than 2 weeks a year, by choice, and make other decisions to make sure we have financial security as it is important to us. It also doesn't mean we are scrimping all the time- we make informed choices based on our finances, family and schedules.
I have some friends who maxed out to the highest mortgage they could and lived on soup and toast for months, going out for meals together it was obvious they were choosing the cheapest things and I felt we could've done different activities if that was an issue for them if they'd preferred.
I have some friends in debt for far more than they earn and are really struggling- but they still insist on living in a property they can't really afford to, in an area they can't afford to and in a job that is not earning them enough money but in the sector they want to be in.
Some friends have several properties but I don't even know if our other friends realise because they are fairly frugal generally and don't talk about it.
Some friends finances I know nothing about.
I wish people could /would chose to live within their means because you never know what might happen and that stress can certainly cause a lot of issues. But, like a lot of things, different people have different priorities and make choices accordingly.

We used to live above our means but then covid happened and I lost my events business almost overnight.

We downsized our house (actually prefer it - so much easier to clean and cheaper to run). Got rid of our car finances and went down to 1 older car (never thought we’d manage and it’s been fine.) We save more but prioritise travel (just more self catering). And rather than have multiple subscriptions like Netflix we rotate one every few months. (Never bored of things to watch!)

we put away 1.5k savings a month now, I never want to put myself in the position again where I’m just in a state of panic that I’ll lose my house.

Most people are only living above their means as British wages are low and the cost of living is high.

Lots of people who have nothing and are reliant on benefits are still poor.

Lot of people who work are still poor.

Most of the people I know who are from poorer backgrounds live below their means and those who grew up richer live at or above their means. My own parents were always savers and worried about having a nest egg and saving for the future and I'm exactly the same so always lived well below my means.

Interesting question, it’s made me realise that I don’t actually know that much about friends financial situation, I’m also not overly open about ours. I don’t know what their particular salaries are, whether they had any family help for things like weddings or house deposits, what their mortgage rate is or how much debt they’re in.

It's biological - if you're seen as a weaker element of the pack, you're most vulnerable to being offed by predators or the rest of the pack. It's tied to survival.

In humans it translates as social standing.

I guess so, ironic that they're actually the weaker ones though 🤣

I know what you mean and I see it a lot too. I've got it in my head now that I need to save loads per month to get out of this never ending rental cycle but yet the pull of a holiday is so strong! My son is only going to be this age once what if he doesn't want to go on holiday when I have a more stable home for us? I'm not going though! I refuse to spend 2k on a holiday again until I sort our living situation out. It just all feels so far away sometimes that it seems pointless to even try as a single parent.

This makes no sense.

It isn’t the poor who are buying Bentleys and diamond necklaces. There’s no reason to believe that wealthy people like stuff less than poor people like stuff or vice versa.

Personally I don't get the need to stretch yourself for material stuff, or go it debt to "prove" anything. People who absolutely have to have the newest, best, most expensive versions of everything baffle me. What's the point?

We currently live at our means but once childcare is out of the way (come on school!!) we'll be below them. I hate not having a cushion and there's very little I actually WANT enough to go into massive debt for.

Our mortgage is more than I'd have ideally liked but that is something I was happy to "max out" on to get into the location we wanted. But, it's a modest house and we're doing it up bit by bit as we can.

Haven't been abroad in 7 years. Perfectly happy with a cottage by the coast walking the dog. My car is 15, DH has a company car so that one is reasonably new. Don't care about designer labels. Both DH and I are happy with simple stuff.

We didn't get engaged til we could afford a wedding, and paid for it ourselves over the course of the couple of years planning. My BIL & SIL wanted the "wedding of the year". They were still paying off the loan they took 6 years later. It was a good day but not worth 6 years of big loan payments.

I suppose its horses for courses, but it's one of those things I can't get my head around. A flashy dress that costs 500 quid but you'll wear it twice, or 10x 50 quid experiences making memories?I know what I'd pick.

My husband & I have a lovely 2 bed (which we converted to a 3 bed) red brick Victorian terrace. We love it & will be mortgage free in 2.5 years (we’re currently 41 going on 43 so mortgage free at 45). I’m severely disabled but earn about £10k a year part time self employed, I used to be the main breadwinner before my disability worsened 10 years ago & was earning £75k then so a big drop. My husband is also self employed in property maintenance but has a bad back/hips himself so won’t be able to do this type of work until retirement. Our youngest son is severely autistic, in a special needs school & has significant needs too which means he’ll likely need long term care & will probably continue to be dependent on us.

We get looked down on for staying in a ‘starter house’ almost mortgage free than to be living in a bigger house with another 20 year mortgage. I don’t want to put a 20 year mortgage on my husband as I have no idea how long I’ll be able to manage part time. You’d think his family especially would be happy I’m not pushing him to stretch himself for a bigger mortgage given my situation (& his), ideally he will semi retire early given mine & our sons disabilities which wouldn’t happen if we got the bigger house that others feel we should have but that we don’t want or need. We love our home & are very happy here but it doesn’t meet others expectation apparently, but who gives a shit what they think when they’re working all hours to keep up with the Joneses. We also have a beautiful beachside caravan, our ‘garden’ is part of the private beach & we go there every other weekend & school holidays so our quality of life is incredible. We just don’t have (or want or need) the big house…

It does kind of make sense though. They can afford the Bentley because they haven't wasted their cash on loads of "tat" (can't think of a better word).

I remember once sitting chatting with a fellow car person on our lunch break. Another colleague came in and was complaining about their car (fairly new Ford Focus on finance) and saying how they'd like a "nice car" like mine (10 year old Audi at that time but I owned it outright). Then in the next breath they took the mick out of my little sandwich box with my sandwiches from home made of left overs, while they unpacked around £12 of Costa Coffee lunch, which they went for most days. The guy I was chatting to previously said "this is why she has the nice car and you can't afford what you're happy with".

I've never forgotten that. Hadn't really thought about it before but it's true. A lot of my "stuff" would be considered nice, my uncle calls it fancy. But I only buy what I actually WANT and I'll save for it first. I don't spend money on things that aren't important to me, like lunch from the coffee shop when I can make a sandwich, or a designer handbag when my £30 one does the same job.