How are so many sailing through sky rocketing prices?

[Pennypark44]

DH and I on just above average salaries, very grateful for what we have, kids, own home which we can afford to keep warm, enough food etc, swimming lessons for kids, toys etc and I know we are extremely fortunate … however when it comes to house maintenance, furniture, cars, and even just the extras like occasional trips to the cinema/pantomine, meals out, local events, birthday parties etc, the prices are getting more and more extortionate despite using every voucher scheme going etc. Most people we know seem to be still affording all this despite being on the same salaries or less and with less debt. Just wondering how, I know of people who seem to get regular large cash gifts off wealthier relatives or had inheritances in the past which meant they have a lower mortgage, is this how people seems to be affording it or are we just missing something?

How do you know they’re not in debt? It’s not something I broadcast…

They earn more than you

Or

They have lower outgoings than you

Or

They are going into debt to maintain their lifestyle

Or

They are cutting back in other ways

Op, average is the mean, which means most people either earn more or less than you. They also may have different outgoings.

They have more income, lower outgoings, prioritise different things (ie the family always at the cinema might do that over swimming etc), they are in debt but don't talk about it - the list goes on.

I fee the same OP. The squeezed middle. Everyone around me seems to have a better quality of life. A bigger house, a better car, holidays etc.
We have very little debt.. mortgage and two overdrafts of £200 that sometimes get dipped in to by the end of the month. One credit card with around £200 on it maximum (which gets paid off monthly)..
I think some people just have different priorities. You don't know peoples personal circumstances I guess.

There’s a huge difference in how people choose to spend their money / cost of similar life styles.

One example:
Swimming lessons - waterbabies 30 mins drive away. £18/lesson plus about £8 of fuel. Cost £26 a week.
Council lesson at the local pool - £6.05/lesson, walking distance so no fuel. Month of lessons cost less than one waterbabies. And the council ones never try and sell me extra stuff.

Cinema trip on 2-4-1 and friend doing babysitting swap. Sweets in handbag. Less than £15. Cinema trip at peak with full price tickets, paid babysitter, and ‘grabbing food beforehand’ with drinks and popcorn in the cinema. £120 night out.

Dinner leftovers for lunch £2. Popping out to the sandwich shop each day. £8.

Lots of people on pretty high incomes. Lots of people on low incomes who get benefits so don't have to pay a hefty mortgage. Lots of people earning "on the side" without paying tax. The "middlers" are the ones who are being screwed at the moment. Earning too much for benefits, but not enough to actually have any spare cash.

Older people don't have student loan repayments to make, the probably bought their homes when house prices were less, so either paid off their mortgage or have a relatively low mortgage compared to their home.

House prices/mortgages/rent are what is crippling people.

You are making assumptions. Presumably most people have cut back, but just in ways you can't see. We still have those things. We earn ok, not massive, I work part time. Our mortgage is near finishing and it isn't huge. We aren't in debt, we use a credit card for big purchases and pay it off monthly by dd. We have always done house repairs ourselves and our house currently needs nothing. Dh has just reinsulated the loft and taken off all the radiators and cleaned them. We have a big holiday planned for June 25 when ds2 finishes his GCSE's. We upgrade both our cars every 2-3 years, sell, add say £5K and buy a newer 2nd hand hybrid car. None of this just happens though, we plan.
What are you spending all your money on? How are you planning on funding all the things you need?

Maybe they have smaller mortgage payments either because of higher deposits, or fixing at the right time. I fixed our mortgage the day after Truss's mini budget, before all the mortgage offers were pulled and reintroduced at much higher rates. We pay several hundred pounds less a month than if we'd had to fix at some of the higher rates that have been around since then.

Maybe they're in debt and you don't know - why would you know this?

Maybe they spend less on things like groceries.

Maybe their salaries are higher than you think. Or they get bonuses.

Maybe you have some unavoidable costs that they don't eg is your commute more expensive, or you need more childcare then they do etc.

Maybe they've had inheritances or help from family.

Maybe they just prioritise different things. That's not me being snide and saying "you just need to prioritise OP" I just mean maybe you have a mindset of putting any leftover cash, if you have it, into savings whereas they spend it, for example. Or you put more of your salary into a pension, leaving you less money in your pay.

We're savvy shoppers.

We're in Next, M&S, Levi's, white stuff, JoJo, Joules, Frugi clothes etc but we get them for 50p-£3 from charity shops and jumble sales.

Books come from charity shops, book swaps and the library

Toys are from clearance sales, same for party presents. By £15-20 gifts for £2-5 and have them for parties.

Food, we eat less meat - use eggs,.cheese, lentils etc do thing's like egg fried rice with frozen veggies. Still get protein, carbs and veggies in, and a lot cheaper than something like sausages, mash, carrots and peas.

Walk and cycle places instead of driving 2 miles and then do free or very cheap activities.

Cinema, we found a local/small cinema brand, where tickets are £4 or £5, we can all go to the cinema for less than one person at Odeon/ Vue.

I don't think people are really sharing salary bumps/promotions because it seems in poor taste right now.
I'm a higher earner and definitely don't broadcast my role/earnings so unless you did a lot of digging into my LinkedIn/company etc you'd probably assume based on the vague details I give out that I earn about half of what I do.

Also agree its priorities. We only see where people splurge, not where they cut back. So someone mentions the cinema/dinner out, but they won't say they've cut back on grocery costs for example - but they probably, along with most of the country, are cutting back somewhere.

For us, we are on a really good fixed mortgage rate, which ends in a few weeks. 😭.

In my social circle I see that people now rarely have meals out and are cutting back on holidays and days out.

In my industry people are doing freelance work on the side of their main job.

Some friends in other lines of work also have the option of being contracted out through private agencies so they've moved more of their work to that, or doing work for private clients.

It's much more efficient to earn more money than to try and save £1 off a pizza and end up spending an extra £2 elsewhere anyway. You can earn more in the time it takes to be messing around comparing deals and driving to 3 different supermarkets to do the shop.

We’re in a similar position, OP. Thankfully DP is in a job where he is still getting regular payrises in line with inflation plus various promotions over the past five years, but that’s keeping us afloat rather than putting us ahead: the mortgage keeps jumping up (it’s in several parts as we ported twice), gas/electricity has gone up, food – the fucking food! So his salary just gets absorbed.

We can afford to run our (crap) three-door car but not upgrade to a five-door. Bare minimum of house maintenance but not improvements, even DIY: like, we could afford to buy a light fitting but not an electrician to fit it and we don’t have the time/energy/competence. Our hallway has four different types of carpet (historically it was flats) that ruck up and trip us up and it’s embarrassing with visitors but we can’t stretch to tool hire to sand the floors or a new carpet. Or we could, but we’d have to sacrifice swimming lessons or something. I’d love a garden shed but I’ve got a garden tarpaulin…

We did briefly have a cleaner but had to give it up. Most people we know are in the same position! The ones who aren’t: children out of nursery so more spare cash. Bought their houses pre-Covid so smaller mortgages to start with. Mostly though people I know are giving up extras like cleaners or lessons or holidays. Not everything but some things.

But people might look at us and wonder how I’m working part-time self-employed (not by choice, got made redundant on maternity) and we still have this big house, outings most weekends etc. Behind the scenes our mortgage is smaller than someone else’s might be because we had a huge deposit (inheritance), and at Christmas and birthdays we ask for national trust membership, English heritage, farms, etc. So we do lots of nice day trips and have a nice life but it’s not entirely paid for by us!

I also hate clutter and I use eBay and Vinted like it’s my job, and use the earnings from that for cafe meals or treats like cinema or ice creams on the beach.

A very close friend of mine looks like she has it all, and I’m sure many of her friends think that. Not that she is trying to portray that but they have a beautiful house and always seem to have glamorous holidays. But I know they struggle. That the size of their Mortgage sends her into a tail spin, and that they’re always on the lookout for the nicest but cheapest holiday possible. They do household maintenance themselves-the husband is very handy.

Remember, comparison is the thief of joy

Because despite all the misery on the forums and press, many people are actually doing okay. It’s a combination of better income, different spending habits, or debt. Some of it you can control, some of it you can’t.

However, you need to look after your own salary. Staying in the same job for years is generally a fast track to declining quality of life, as pay rises aren’t keeping up with inflation.

I think soaring house prices have a lot to play in this.

Lifestyle is becoming increasingly uncoupled from earnings. It's far more related to how much help you had to get on the housing ladder /from inheritances or wealthy parents who rode the housing boom and bought buy to let's etc.

I think it is going to have a disastrous effect on the economy. Either people are demotivated because earning more won't really improve their lifestyle, or their demotivated because they have inherited/will inherit enough to make anything they could earn pretty irrelevant

People on benefits can have a mortgage. We do. Don't get any help for it either.

They own their home outright so have no rent or mortgage to pay. Or they have family who babysit their kids for free so don't have to pay for childcare.

Husband and I go out on a 'date' once a week but its brunch for £25.00 rather than dinner with wine for £80.00. We wear nice clothes and expensive shoes but we've had the shoes for 20 years. They get reheeled and soled as necessary ( I know that puts us at a huge advantage over people who have to buy many pairs of cheap shoes because the expensive ones are completely out of reach in the first place). I shop for good quality items in dress exchange shops and charity shops. We meal plan and only buy exactly what we are going to use. The ideal is that by Sunday night we have a bit of milk, some cheese and the odd bit of salad left before food shopping on the Monday. We batch cook with meat from the local deli. It's more expensive but not a scrap is wasted and a kilo makes 6 cottage pie middles so that's 6 weeks of one day's meal option sorted.We look after our grandchildren a lot but all the toys here are passed on from other grandparents or from charity shops. All our furniture is second hand apart from the sofas and mattresses.If I see a look I like in a high end magazine I recreate it with secondhand things. That applies to my outfits, my house and things in the garden. Car boots are a favourite. I was a single parent for many years before I met my second husband. I had an awful lot of practice at making things/ my life look a lot shinier than it really was. You can't polish a turd , as they say. But you can roll it in glitter.

I have no debt at all all my bills are up to date i owe nothing to no one.
I dont drve so no expense there.
Im H/A so my rent is dirt cheap.
I work and pull in a wage that makes life comfortable without working to death.
Plus i live alone just me so no responsibility other than my self.
So i can spend out if i want too.

Yup rent/mortgage will be the main one. Someone who's paid off their mortgage or has a really low interest rate will be way better off than someone paying off a mortgage they got recently.

And I know people living in council houses and their rent is less than half of what private renters pay sometimes even a third of what they pay!

So someone's rent/mortgage situation will be the main reason they have or don't have extra money

I think soaring house prices have a lot to play in this.
Lifestyle is becoming increasingly uncoupled from earnings. It's far more related to how much help you had to get on the housing ladder /from inheritances or wealthy parents who rode the housing boom and bought buy to let's etc.

Agree, I’m in London so some people just a few yrs older than me can be an expensive house that they paid very little in real terms for. And my younger high earning neighbours are paying more in rent then I am for my mortgage.

I think it is going to have a disastrous effect on the economy. Either people are demotivated because earning more won't really improve their lifestyle, or their demotivated because they have inherited/will inherit enough to make anything they could earn pretty irrelevant

Its already is, wage stagnation, low birth rates, ageing population, low productivity, little growth.

I used to think the same as you @Pennypark44

The reality is whilst some are gliding like swans they're paddling like mad underneath just to keep going.

I used to work in a corporate environment. People on very high salaries.

One guy used to boast he was worth £30M and that he had a large property portfolio. He had 4 kids and a stay at home wife who used to post all the time on Facebook about how great their life was. He was a real poser type. I always used to think why are you working here if you have all that money?

Anyway, when cost of living crisis hit and interest rates started climbing so did all his bills. He came to me once in tears saying his £250k salary wasn't enough to cover his outgoings. He was up to his eyeballs in debt and if his wife found out she'd divorce him. He was asking for a pay rise!

Despite all the tears and drama he still kept going on holidays and living the high life. I didn't feel sorry for him but was amazed how precariously balanced his life was and how his wife had no clue.

Another friend of mine was telling me about someone she knew who had an income of £20k per month but outgoings of £21k. He was asking to borrow money off her to buy another property he couldn't afford.

So you see the old saying all that glitters isn't gold, is so true. Some are living on borrowed time, some really don't sleep at night. Some are trapped in a debt cycle their unlikely to ever escape.