To be shocked by how many people with expensive lifestyles have no savings?

[SnugBird]

Quite a few people I know have what looks like a very expensive lifestyle - nice cars, business class flights, 5* holidays, but at the same time have little to no savings. I think I’ve always assumed that higher spending like that would go hand in hand with having a financial cushion, so it’s been surprising to realise that’s not always the case.

AIBU?

not everyone on here is based in the uk…investing options are not the same everywhere. We have our saving split between accounts that give the best rates possible.

I live for now. I’ve sadly lost too many people close to me at a young age, and am firmly of the belief that life is for living. We still have high outgoings - mortgage, child to put through uni etc. I put a lot in my pension, don’t rack up debt, have a job with a year’s notice and have excellent income protection with my job, so have decent cover in the event of redundancy or illness. But I don’t have savings as such, beyond pots for holidays/work on the house etc. Time will tell if I’m doing the right thing, but in the meantime I will go on as many holidays as I can afford.

Same. I was a spender (zero / low savings) for the first 10-15 years of my working life and strongly regret it. Wish I had found more balance.

I was the opposite though - I pretended I had savings.

I did not.

That’s why I edited it.

How high is her expenditure that £55k would only last a couple of months?!

Cross posted 👍

Quite, that’s for a couple of months so she spends 270k plus a year, wowsers!

Why would you assume this??

Read fiction from any period - there are characters who spend all their money, or more.

We've been self-employed/SME for so many years that not spending everything became a habit. Always put money aside for the tax bills, and to have a cushion for the months when the payroll needed meeting, even when we didn't draw any income.

Pension is in a SIPP, which owns a (modest) commercial building on which the mortgage is paid off.

Now we can afford to live nicely, help the DC etc. and go on holiday.

Let’s assume you are correct. It may be that it is for a range of reasons.
Image. We have become a very visual society and image conscious. So people are desperate to look as if they are doing well or have the latest item.
It is all a bit shallow.
Debt has become respectable. It used to be frowned upon.
The best credit card is actually money in your bank account or similar. Not debt on a credit card.
Debt has become easy.
People have stopped thinking of credit as debt.
People have a lack of self control. And don’t expect to save for anything but want it instantly.

I find it surprising too OP. Different priorities I suppose.

I remember a friend of mine - she and her husband and kids lived in a massive house, lovely holidays, both had big new cars every couple of years, new clothes etc. Both worked in well-paid jobs and were generally pretty affluent. Then she was made redundant, and I remember her telling me that she had to get a new job asap, because otherwise within 6 months they'd lose their house! I couldn't live like that.

A lot of the image can be debt. Not really owned.
The car is not owned but monthly paid, the phones paid for monthly, the clothe may be the same paid over a few months. Holidays paid for over instalments, even the furniture. Buy now interest free for four years etc. None of it is owned. Yet.

I agree about saving up for items you want to buy, except for the car. There’s no point in buying a car outright, even secondhand, when you can lease and not have the responsibility for reselling and renewing a depreciating asset.

.

I'm not shocked at all.

A lot of people have no planning horizon, and that includes financial planning.

Agreed. Ants subsidising the grasshoppers.

Every time I see an expensive car I assume it’s on finance.
My son worked in a prestige car showroom in Chelsea and 95% of cars were sold on finance.

I know a fair few people who live this lifestyle and have no savings, usually more the opposite and have debt.

Each to their own.

No idea about others but I have a handful of friends in my age range (mid 30s to 40) who have absolutely no pension, no savings, no regular work (they ping between low paid jobs) or proper qualifications despite being very capable.

What on earth is going to happen to them in their old age I have no idea.

Actually I do - they’ll get all the means tested stuff while those who have been sensible are left to struggle with a small workplace pension. They’ll be absolutely fine.

Work doesn’t pay.

It’s not an ‘each to their own’ matter as no doubt when all goes tits up they’ll want to state to step in and pick up the bill.

A lot of people are in this situation thought due to the cost of housing.

Between us we earn £250k/ year pre tax but have a big mortgage on our 3 bed terrace and high childcare costs (London living). We save all we can but still only have £120k saved which won’t last at all long if someone was made redundant. Mortgage and nursery = £6.4k a month.

If we were able to easily downsize and be able to commute to work and see the kids in the evening I would be a bit less stressed, but that’s tricky.

This was DH and I until our early 50’s, we had a lovely house, 3 DC, multiple foreign holidays to a year to places like South Africa, South America etc , ate out most of the weekend and always were on big days out but we had absolutely no savings.
We did always pay a lot into pensions though.

@Flossette but your house is surely expensive despite its size so you could move to a cheaper part of London if one of you hadn’t found a similar job before your savings had run out.

Most of the people who I know live like this will inherit a significant amount. Maybe that’s why they do it.

My dsis is a bit like this. I didn't know until quite recently that she has zero savings. She earns a lot (doctor) and lives alone in a flat she rents for not too much money, so I just don't think she's motivated to save. She just buys what she wants or puts it on a credit card and pays it off when she gets paid