Achieving a better standard of living that your income suggests

[ChocolateWombat]

I notice that people who have similar household incomes, family size and house size in the same area often seem to have very different standards of living.
My question is how do those who seem to have the higher standard of living achieve it? I'd like to know their secrets which allow them to have this.

Just as an example I'm thinking of a family which have an income of around £60,000 in Surrey and who manage have holidays and privately educate their child. How do they achieve that when lots of people with much more seem to have neither?

I don't think that is tact kalidasa, I think it is obscuring the facts. Of course nobody has to volunteer personal financial info, but some people who are struggling and see others doing okay, don't realise it is not because of them, but because others get given money by relatives.

IMO most people who get given money in this way downplay the importance it plays. When actually it can make a massive difference

Hmm, that's interesting grennie, I hadn't thought about it that way but perhaps you are right. I am always open that we have had help, just not the extent of it - I suppose partly because as the money came from DH's family, I feel it is more up to him than me how we talk about it or how open we are. He grew up as one of the least well-off families (relatively speaking) in a very wealthy area and really hates people being ostentatious about money. Still, if I was speaking to a close friend about the nitty-gritty of how you afford childcare, maternity leave, going back to work etc I would be honest about it if I thought it would be clearer or more helpful.

The issue of talking to others is interesting. If you are seemingly doing better than friends on a similar income, saying you overpaid the mortgage for years and that you don't have SKY etc, can sound as if you are being critical of their decisions which have been different. Like Kalidasa I might be a bit vague with all but very close friends who are genuinely I the rested in different ways to handle their finance, rather than those just chatting or being nosy. Of course, I also know that no one has all the answers. Very important not to sound like a know all.

3 semi detached houses in a row. Very similar ours bought in 2005 £400k, one neighbour bought 1995 £150k and new neighbours bought last year £740k.

Agreed Dedum. What I see all the time though is:

1 friend where they live in a largish terraced house. Suddenly they move house and buy a 4 bedroom detached and she goes part time.

Another friend, one of them hates her job and doesn't have great health. She suddenly decides to "retire" at 51 and her DP goes part time.

Another friend who does a low paying manual job and never has enough money, suddenly starts going lots of foreign holidays and going out a lot for meals, etc and then buys a detached house to do up.

etc, etc

I was really puzzled by this until I realised they had all been given/inherited substantial amounts of money. I think most people underestimate the amount of people who benefit from this, and the difference it makes.

Grennie I have seen similar things. My in laws inherited money and suddenly started going on 2 or 3 extremely expensive holidays a year.

If I inherited a load, I'm not sure I'd move to a big house, although perhaps that is the best way to invest the money. I do feel genuinely satisfied with the 3 bed semi I have. I'm also genuinely happy with the oldish cars we have. I feel fortunate to have the things we do and not to have big money worries. I think I'm probably not very materialistic, but others might view me differently. Perhaps if I did suddenly have a lot more money I would change my lifestyle....hard to know.

Anyone here who did get a lump sum, did you use it to visibly improve your standard of living ....or for something else?

I buy bargain foods when possible, the freezer is full of perfectly edible but officially "out of date" stuff. Very rarely buy branded products.
DS2 has constant hand me downs from DS1 from school uniform to football boots. Not averse to buying (decent) stuff off ebay too. Always shop in the sales for myself.
Money also made in selling - old clothes, toys, home furnishings etc. I have sold used bath taps, light fittings etc etc. Never ever give to charity shops or school collections.
Always hunt for vouchers for days out/meals.

DH is a actually quite well paid and I earn a p/t nurses wage but we have had no handouts/inheritance and have spent over £60k on childcare so far...

I have one friend who has inherited £500k + from two relatives from the sale of pretty ordinary houses in the South East.

We are lucky my parents have helped us out with a bit of extra cash when we have moved up the property ladder.

Also, I think it's easy to look at a range of friends, and the luxuries they appear able to afford and then lump them all together. Friend A - big house, friend B posh car and holidays, friend C private schooling, and end up thinking: how come I can't afford holidays and big houses and private schools - they're on the same income as me. When no one actually has all of that.

We've had help from family with school fees and initial deposits for homes, and we also got very lucky with timing of buying and selling properties.

But we also don't do debt. I think CC debt and monthly overdrafts just sap a lot of people's disposable income. I worked like a carthorse to get out of debt in my twenties and apart from a couple of tiny hiccups (usually when freelance contractors forgot to pay me on time!) I've never gone overdrawn or had a loan (except mortgage) since. The amount of disposable income this frees up is pretty notable.

Though I also know people who admit to being up to their neck in CC debt because they want to live a certain lifestyle, whether they can afford to or not.

We don't have much disposable income but what we do have goes on pretty noticeable luxuries like theatre and holidays. I have a terribel book buying habit and DH and DC are just as bad with CDs. But that's it. That's what we choose to spend on.

If we don't love stuff, we don't ever spend on it. We never eat takeaways. The DC are in their teens and have only once had a takeout (actually a supermarket ready meal!) in their lives. We run one old car. We never take taxis. We meal plan. We get three haircuts a year and that's it. We buy good clothes and shoes but only when we need them. I think we just never spend money on ephemeral tat.

I think it's impossible to judge someone's financial situation from appearances. I know someone who on the face of it looks well off, nice house, fancy £40k cars etc but who is saddled with debt and is receiving handouts from parents.

On the other hand, DH and I have well paid jobs and a comparatively frugal lifestyle, however we have no debts other than a small mortgage which should be cleared in next few months.

as others have noted appearances can be deceptive .
My aunt and uncle have been all over the world since (early) retiring- usa, Australia, carribean, Canada, cruises etc. they often go for at least two months a year. they're military about when they book, wait ages for the right price and always get a bargain .

They both had ordinary factory jobs.
Their house is smallish but well looked after, they replaced their kitchen just before xmas and the last one had been in since 1970s, aunt makes her own curtains, cushions etc. they shop at aldi etc.
My aunt always looks immaculate.
And they have never had a penny given them, no help or inheritance. They have worked hard and saved hard.

My rich relative , who had fab highly paid job, never goes away except to local but nice hotel, lives in small apartment and clothes are plain. Never really wants anything apart from a nice cake or bottle of wine. On paper they are ££££££ apart, but as long as they are all happy that's the main thing.

I agree that appearances can be deceptive.

I have two friends that I initially thought were both extremely well off, but as I've got to know them more, I've found out the following:

Friend one has three children at private school, always looks beautifully dressed, at least one foreign holiday per year plus lots of mini breaks both in the UK and abroad, and a massive, well decorated and furnished house.

It turns out that her grandparents pay the school fees for her eldest child, her parents pay the school fees for her middle child, and her in-laws pay school fees for the youngest! They bought their massive house relatively cheaply, and have a low mortgage as grandparents gave them money when they bought their first home. The house is furnished with good quality secondhand furniture, Ebay buys and items from outlet stores. My friend buys all her clothes on Ebay and sells things on there too. Foreign holidays are usually booked last minute through budget websites, and they shop around for deals for other mini breaks. Oh and they always, always shop at Aldi, never any of the pricier supermarkets. My friend also always has beautiful nail extensions, and it turns out that a mobile therapist visits her house once a fortnight and only charges her a tenner each time!

Friend two has four children and she and her DH do jobs that pay average wages (he works in a call centre, she works in a shop), a massive 6 bedroomed house, they have nice holidays, nice clothes, and seem to eat out a lot.

She's told me that the reason they have a big house is because they inherited money from her parents, therefore have no mortgage. They also 'stagger' their working hours, hence they have no childcare costs. She works mornings and her DH always does the 2pm-10pm shift at work. She is also an Ebay fan, and kits the children out from there or in the Next sale, and sells loads on there too. As soon as the kids have grown out of anything she lists the clothes on Ebay straight away.

Different priorities - we've spend modestly compared to our level of income because we are aiming to pay off the mortgage in time for assisting the DC through uni and if funds allow, the choice to work because we want to rather than because we need to pay the bills.

We bought at the right time even a year later we'd have paid at least 1/3 more, a house over the road went for 2/3 more two years later.

We see lots of people over stretching themselves,big house/right postcode = big mortgage, several dc close together = high childcare cost, then they struggle even with a good income.

Very interesting thread.

I think, as others have pointed out, that it's easy to see the things that people are buying and focus on those, and of course we don't know what things people skimp on.

I know a couple who earn well, have not moved house for many years so probably have a small mortgage, and spend their money on dining and drinking and foreign holidays.

one of them was out of work for a while and I said something about living on savings; they have no savings, and have a policy of not paying anything into a pension.

I think a lot is about the habit of frittering. DH is a good example of this - he can easily get through £50 on a Saturday pootling around town with some odds and ends we don't really need to show for it.

I don't do this and live on very little (childhood of being very broke) but I do fuck up in big ways instead. Like setting up a business that failed, not knowing how to do benefits etc.

Choc Wombat are you in Australia (username hint)? I've found there's a lot of conspicuous consumption in Aus which can be difficult to deal with.

Aroom I've noticed that too. All my friends at home have nice, big houses, two cars etc, as it seems to be the done thing....DH and I on the other hand have a smallish house, no car (live in London so no real need) and are actually saving here so we can afford to move home!

PossumPoo that's my situ too! Trying to save up here to go home - although I am actually dreading it in some ways as all the women I know simply don't work, but go to lunch/gym and live in very nice, big houses. That definitely won't be me!

Do you have a time frame aroom to move home? I got a little excited tonight as I think we are nearly there savings wise, then remembered I have to stay for another two years anyway!

I am a bit nervous of going home as we have a nice enough comfortable life here (we aren't materialistic though so havent ever felt out done by the Jones' type thing which is just as well in London where there seems to be loads of money!). Life there now seems so different to when I first left.

preciousbane fancy cars are definitely at the bottom of our list, we both have just never been bothered about makes/ones with bells and whistles on/flash cars and all. as long as it gets A to B , is comfortable and is economical etc.
so we buy a smallish one every 3 years from new, then trade it in after 3 years for another similar one, no hassles, so far.
:) @ brolly story.