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?

I think statistics show that the poorest are now substantially better off than they were 10 years ago. This is mainly due to increases in the minimum wage comined with benefits. Poorer households who have secure social housing particularly benefit.

The very rich have also got much richer.

Those in the middle who are making enough to exclude them from state support but not enough to live well ( particularly those in the SE ) are really feeling the pinch. Some of those will be subsidised by family members. Others will have substantial debt.

Those living within their means without family support are the worst impacted. And you sometimes wonder whether you are stupid when you see the amount you will have to shell out in care fees compared with the poor/ indebted.

Yes in some cases that’s clearly the case but I am quite frugal by most peoples standards and our earnings never seem to have had a massive impact. They’ve gone up significantly over the years as we’ve progressed through our careers but we seem to be affording less than we did back then, not sure how we would even be affording even the basics now if they hadn’t. Even trying to earn more doesn’t have a huge impact, DH works hard to earn overtime but then half of it is lost in tax (including CBHIC) and even that extra 5k doesn’t go very far these days.
Yes if we didn’t have our mortgage etc then that would make a huge difference but then I know people who are paying more than us. Don’t get me wrong, I am incredibly grateful for the life we have, more just curiosity, I can think of examples (same family size/age of kids etc) where it’s clear how people are affording these things but they either have a much lower mortgage than us or were gifted money by the bank of mum and dad. A few I know even on higher earnings then us but same mortgage/no bank of mum and dad or side hustles seem similar to us

My exhusband was an accountant. He worked for people with flashy cars , homes in the Cotswolds, children at expensive private schools etc etc. The wives had expensive hair and expensive gym memberships and a wardrobe full of designer gear to waft and swish about in. He used to laugh and say that they were literally one missed payment from disaster. One of them owned a huge car dealership. If he didn't make a set amount each month the whole deck of cards would have collapsed around his ears. It all looked beautiful. He was unbelievably stressed.Be careful what you wish fir. A lot of it is smoke and mirrors

Compared with before 2019ish I have cut back loads.

I loved going to the pub, having a few pints, eating a massive roast dinner then rolling home. Now we only go out on special occasions or when my boomer parents are paying (£££).

Got rid of sky telly. Got rid of the TV licence (I don't watch live TV, prefer streamed). I switched supermarkets. The length of my hair tells you how long it's been seen I last saw a stylist, but I hate the hairdressers anyway so not much of a loss. DD likes buying second hand clothes. I haven't bought new in ages. I've been wearing the same trainers for three years. We make our cat her toys! We buy cat food in bulk online. I'm lucky in that I don't need a car so don't run one, and I get free bus and tube fares from work. I also use my bike for small to medium shops. I find cycling is quicker than the bus is most cases.

There's plenty of free museums near me, and we have ArtFund membership so we get into exhibitions free or half price, plus we get money off in the caff!

I earn well but I'm on my own, and I fund an 18 year old at sixth form, and she has a healthy appetite, plus she has her books, her equipment for A levels, everything to pay for. (She is looking for a job) My city is expensive so I'm looking to move back to my home town where it's much cheaper to live.

We're reasonably well off, we still do those things, just less frequently and save slightly less now. Someone on the outside wouldn't notice the difference probably.
DSIL had a large inheritance, so they have a tiny mortgage. Other friends have never paid a penny for childcare. Others might have mountains of debt, or significant savings, or earn more than you think. You never know the ins and outs of other people's finances, which is why it's impossible to compare. What people say isn't always true.

If your DH is getting hit by CBHIC for doing a bit of overtime then he earns significantly more than "just above average"...

I think there are a lot of people who earn a lot of money tbh. I'm in my 40s and the majority of my friends are in professional jobs earning very good salaries.

Over the past few years, I've personally made tactical moves with my career to increase my salary (mainly moving sector) Work is now more pressured but I have a lot more disposable income. Easier said than done, but you can't afford to stand still and expect not to struggle with cost of living increases.

@Pennypark44 have your earnings gone up with inflation though? We have had wage stagnation in the UK for years.

60k today is the equivalent to 48k in 2020 & 32k in 2000.

We are certainly feeling the impact but parents do help eg pay for school trips, towards a holiday, etc.

Dh and I have worked hard to keep our expenses low so that we can live off one salary (his circa £38k) - mine is for savings (currently depleted from up sizing the house and may leave) fun, holidays (£48k). We've had no help from families. We obviously have older cars, older phones on sim only, shop in lidl and stick to a budget. But it's worth it for the security and enjoyment.

@TheEllisGreyMethod How will you fund childcare?

I don’t think it would be something that would of been sustainable for the people I know of over so many years, it eventually catches up on most people

We pay £800 in mortgage interest alone

We use my husbands Blue Light Card to get tickets for events such as panto, Theater, football games etc so it only costs a fiver and you can get up to four tickets so it’s almost free!

(Step) kids wear clothes from the charity shop or get clothes for birthday and Christmas. Us adults rarely buy clothes but if we do it’s second hand as well mainly. Wear shoes until they fall apart.

We have a big mortgage but are frugal and also cook from
scratch, take Picknicks, don’t buy food out or give in to kids pestering for stuff on days out.

Alright, OP.
My husband is a boomer, as they like to refer to that particular generation, very fortunate family anyway, no kids, no mortgage.
If something went belly up, I have my own assets in another country.
I see the struggle some people have to go through, he doesn't seem to.

The last time I’ve seen a plane that wasn’t full to the brim, including business class, was pre pandemic. And I’m flying monthly. Doesn’t matter if it’s school holidays or not, Europe or transatlantic, everything is just packed - despite the fact it got significantly more expensive. No sign of “crisis” there.

Yes maybe it’s just where we live, mainly public sector professionals so we’re all on similarish salaries, but up north, less transient population than down south and more (even our age) bought years ago when we were still renting down south (and their parents long paid off mortgages where as my parents always rented. Sounds like your social circle more like us

Our friendship group are at similar earning levels to us. Some may see us as having a slightly less financially stressful life than they do.

We are able to afford most outings whereas they often suggest cheaper options or not going to the big ticket activities.

The difference is that we are older and started adult life earlier so have built up financial security. Our many years of having to find childcare costs are over. We don't drink. We save and buy cars outright. We buy reconditioned iPhone 12 rather than a new 15 on contract. DC get cinema subscriptions from grandparents for Christmas. We are lightheartedly mocked for not having amazon prime.

It can be the little things that make a difference.

That's not say it's plain sailing for us. Nor are we unaware that we are fortunate to be comfortable. And very conscious that things can change unexpectedly.

There won’t be many people paying that much mortgage interest.

There’s some pretty huge day to day spending power available to someone paying half the mortgage interest you are.

No criticism of your position, but it’s an excellent illustration of how things can vary hugely depending on relatively small differences.

You also see differences in life today that’s a reflection of behaviour 10-15 years ago. My husband and I both worked crazy amounts in our 20s and lived in very cheap places. Which then meant got deposits and mortgages sooner than many, and have been paying off mortgage ever since. Which means that have comparatively low mortgage compared to someone else my age in the same house type in the same development.

Also got nice looking cars, but one of them is 10 yrs old. It was bought outright at 3 yrs old off a company car scheme, so never paid any finance on it. The insurance is half what a newer cars is. But it’s a modern body shape, is a classic dark grey and so doesn’t look like a 10yr old car.

Between the mortgage position and that car, we’ve probably got an extra £600 a month to spend on other stuff compared to someone in same job, same house, same estate and a 2yr old car on pcp.

Small differences add up to big variations in spending power.

It costs over £200,000 to raise a person till 18 (not including the £10,000s that parents have to contribute to university costs)
That's from the bigger car, car seat, child care, loss of earnings, extra heating, extra electricity, petrol for trips you wouldn't be doing if you didn't have the kid, hobbies, shoes, gifts, food, etc.
I'm childfree and don't have many outgoings at all, so I choose to work part time and don't need to watch the pennies. No debt or loans except the mortgage.

Undoubtedly there is a lot more debt about that you'd think. There is apparently a big waiting list here for appointments with CAP/Stepchange etc.

And you never really know that goes on behind closed doors - inheritances, canny property manouvres, side hustles.

We have several epic holidays a year because DH is really, really good at credit card rewards. We get the bonuses, switch cards, use them for everything and pay in full every month. We even pay our council tax by credit card for the points. The aim is to only have credit card payments on our bank statements. But we don't bring this up with people in person because it would be a bit weird. Only if if comes up in conversation or someone asks.

We paid off our mortgage a few years ago by borrowing the minimum to buy a wreck, improving the house ourselves, selling up and buying another wreck, improving it ourselves and then moving to a much cheaper part of the country. We never increased our borrowing from that initial amount, despite buying larger houses each time. Inflation made that consistent mortgage payment ever smaller until we could easily overpay and get rid of it. Neither of us are tradespeople, we had to learn to be "handy". Youtube and the library were great resources. But we had the mindset that we might as well try it ourselves, as if it went wrong we would pay for a tradesperson anyway - might as well try it ourselves first. Only outsourced gas boiler and an electrical certificate before we sold.

We "did the maths" and I stayed home with the kids instead of paying for childcare. This also gave us more time to spend less and I started a succesful hobby business that grew until it is our only family income. Maybe people thought we were well off because I was SAHM, but actually it was being a SAHM that made us well off.

We reduce where possible and earn more where possible. That roughly evens it out

It's about choice. I have noticed those who seem to be struggling most have mortgages of £1200pcm or more and have overstretched but won't compromise on lifestyle.

@Heretodaystillheretomorrow 1200 for a mortgage in most areas wouldn’t get you much of a house if any. If you are under 35 you don’t have much choice

I mean that's the going rate for a two bed terraced house to rent round here, similar if you got a mortgage today.
No this isn't London or close to London or any area known for being particularly expensive.

I mean they could always move to a studio apartment which are about 800 a month but that would be a bit shit if they have a couple kids