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 can see that it’s frustrating to feel like you’re doing everything right, working hard, planning ahead, living frugally, yet still finding it difficult to afford the basics or enjoy small luxuries. But well done you for your resilience and perspective that you can still recognise how fortunate you are overall. The fact that your kids are happy speaks volumes about the love and effort you’ve put into creating a good life for them, even in challenging times. It’s okay to feel both gratitude and frustration at the same time, they’re both valid emotions.

I think you have to face the fact that you won't have money until the kids are gone as in a relationship with someone else, not at university. We're still propping up our youngest who doesn't live at home but with a working girlfriend,, but is doing his masters. So we're paying half the flat bills.

We always assumed that people earning the kind of money we do, would be holidaying on Aruba twice a year in 5* hotels but the truth is we worry about paying our mortgage, panic if one of the cars needs work and live in fear of one of the white goods dying.

We're not scrimping for every penny, I can put my heating on if I want and get the kids new shoes but the big spends are a worry. I also live in permanent fear of being made redundant. It almost happened last year, DH is pretty job secure as he is police but even at his rank we couldn't afford to live just in his salary alone.

I wish food prices would come down, it's by far our biggest expense after our mortgage.

Our council tax has gone up 10% a year for the last three years. 2 bed small bungalow this year £3.5k. our water rates are going up 40% over the next five years. Gawd knows how much car tax will go up in the next few years. Food costs, well it's anyone's guess.

We're all being squeezed.

In my friendship group we all have a similar household income but two of my closest friends have a huge amount of financial support from their parents (both sides) and always have
Free childcare for all children, huge house deposits, driving lessons and first cars. My one friends father gives her £5k in Drcember every year to cover Xmas!
Their parents pay for swimming lessons for children, dance, football etc
They have savings accounts set up for the grandchildren and another huge difference is that they both know that they will eventually inherit a lot of money (even if care is needed) so they don't need to worry about savings. My other friends mortgage is on interest only and she only pays £200 a month and knows she will repay it using inheritance (we get a lot from both sides)
Neither of us will inherit so we are careful and save as much as we can to cover future house deposits, cars etc

I think you hit the nail on the head OP.

It’s interest rates/ fixes and small/ big decisions compounding.

Right now I’m sitting in 1000ft of architectural wonder at a 4m long table eating homemade tomato soup made with Mutti tomatoes and fresh bakery bread in a brand new all wood joinered kitchen. That’s just my kitchen. We have 2000ft of other house and we are only early 30s. No help from parents. Never earned much beyond minimum wage plus side hustles - which are now becoming successful businesses but we only draw director wages close to minimum wage.

It’s very confusing. DP and I feel like we are living the life of Riley. Yet we can’t work out whether we are the richest or poorest people we know.

People walk through the door and go wow! Think we earn mega bucks. What they don’t know is our whole mortgage is only £700. We are on a less than 1% fix until 2026. We have near 50% equity from previous scrimping and saving in our 20s whilst everyone else was travelling and partying. The house will be worth double by the time we finished.

The kitchen Im now sitting in used to be a large garage. We slept in here for a year and a half with a newborn and no toilet or kitchen while the main house was soaking wet because of the leaks in the roof. Half the blinds are still paper Ikea blinds, or I sewed my own using Ikea £10 voiles to turn them into fancy custom pinch pleated. The brand new kitchen is lovely but cost less than 10k (which took us two years to pay in small bits) as I used half price sales, and some tricks when buying (1m wide drawers cost same as 60cm drawers), and painted/ fitted ourselves . The appliances are smeg range cookers and fancy fridges but refurbished second hand so 30% the cost. The kitchen would have been about 25- 30k.

We missed the opportunity to get a good fix on utilities. Heating and drying the house cost 8k a year during 2021/ 2022. So that probably evened out the interest but then you could ignore the utilities and pay when you want as opposed mortgage payments. Flexibility is important too. We never have to pay to borrow money. We are offered 0% loans all the time. Plus can borrow from business and pay back.

In 2026 our fix will end and all chaos could ensue. I’m hoping by then that we would have had a chance to continue growing the business and have good retained earnings we can use for an offset mortgage. And fingers crossed interest rates fall.

But I agree it is confusing. Some people love to say how rich they are. Others how impoverished. And really they could be in the exact or opposite situations. Like for example we have no UC despite minimum wage (because with the business it’s too complicated to claim). So most of our peers get 90% childcare paid. Which is a HUGE cost. So maybe we are the poorest? It is so confusing.

It must be very hard 😓 especially so at a time when you’re probably feeling you need to wind down more than ever. I suppose that’s where we’ve been lucky in that our careers have progressed and salaries risen significantly just at the time prices have risen so much, so although we struggle to afford what we thought we would have on our income, it would have been much harder otherwise

We didn't do many holidays and those we did were cheap eg camping, we buy quality (and save for it not credit), do a lot of 'make do & mend' - we've not ripped out the original kitchen units (but did replace and extend worktop) or bathroom, we repair everything and maintain everything ourselves only spending on stuff that's certifiable eg boiler service or electrician where it needs signing off (DH is qualified but for commercial not domestic), we prioritised cutting future costs so double glazing, insulation & thick thermal curtains, solar power, more economical heating, where appliances need replacing we go for longevity, quality and low maintenance and running costs eg our Miele dishwasher and washing machine are both 25 years old never serviced as such (DH capable of running repairs but not needed) so the annual cost has been totally minimal vs a friend who must be on 6th washing machine or more in that time (I've lost count), our cars are low mileage recent but we drive conservatively and keep for years.

Keep costs down, and you eventually run a surplus eg our electricity bill is low as less 'stuff' is turned on, less washing, less tvs computers etc, also now the kids drive themselves our cars are v low mileage = min maintenance between MOTs and we spend next to nothing on fuel.

@justasking111
Partner is full time on a very good income - unable to work 'more'
Fantastic pension so def be able to retire at 60

I'll hold my hands up as one of the so called 'boomers' that everybody seems to hate and presume we don't know what it is like to live with a high mortgage and expensive outgoings but I, and many others, lived through the mortgage rates going up to 17% and negative equity. I lost my house at that time, had to downsize to a tiny, totally inadequate space house with three kids as the only way to get out of debt due to it. I was always frugal from necessity, and still am now even though I no longer have a mortgage but on a very low income i can still heat my home adequately and have some savings for emergencies.

What jumps out at me is all the expenses that surround children's extra curricular activities which seems to be the norm now which would have been totally impossible for my 3, it is possible to cut down there without any detriment to the children. For example i took mine swimming myself which is much cheaper than lessons. They played football for free in the park with a bit of organisation from a couple of parents. We went out to pizza hut sometimes to eat but I would give the kds the choice of desserts or getting sweets and a film on the way home (25p penny mixtures which they always chose😂 ) they saw that as an extra treat when it was actually me cutting down the cost!

@Mossstitch I get where you're coming from but not all of that is necessarily cheaper now - DS swimming lessons are less than I'd pay to take him myself as the cost of swimming seems to be astronomical. Extra curriculars are used heavily in our school as childcare to enable parents working - so although DS does a lot of classes, in reality if he didn't I wouldn't be able to work, and the cost of the classes is on par with what I would pay for a childminder (not that there are any without a waiting list) or after school club. It's a necessary expense for me (and for most parents I know) - not an optional 'fun' one.

Thank you ☺️ I think it helps in a way that I’ve had to live frugally most of my life and have been much worse off so know the phenomenal difference there is between not being able to afford enough food, heating, a car, mod cons and the insecurity of renting etc and having the modest but comfortable life we have now. We’re lucky, we can afford everything I think the kids need, no trip to Lapland or even the pantomime like some of their friends but similar joys to what I had as a child e.g an advent calender, buying a decorating the Christmas tree, a few presents and crackers at the table. Not to mention a good school, living in a friendly area etc

I'm on a limited budget but my food is largely supplemented by Olio. The food is at sell by date or best before. You can download the app, sign up free, and you're good to go. It may not suit everyone's ideal, but it's good food. The sell by date is simply a stock management system, and if you freeze the food, the sell by date is irrelevant. I've been using this for 2 years and my large freezer (bought with some of the money saved on food) is always full of free food everything that comes from a supermarket with a sell by, use by or best before date. It's a lucky dip every day, but the basics are always there. Bread, fruit, meat, vegetables, ready meals, snacks, puddings and cakes,etc. All you have to do is collect it from a volunteer like me in your neighborhood, you don't have to qualify in any way. Some people who collect from me also collect different food available from others in my neighbourhood until they have everything they need.

Or if you're single you're just living off min wage and no benefits
People seem to assume everyone in min wage is topped up when they're not

I can see how people end up like that if they’ve been particularly astute like you, my nephew worked his socks off from 16, bought a house at 21 etc. I have another friend who bought early then got lodgers in and has almost paid off her mortgage to a house now worth a fortune

Yes I do agree people have a very rose tinted view of the lives boomers lived, my parents were boomers and had far more difficult lives than even those on UC have today. They were in semi skilled work, not well enough off to buy but privately rented so never benefited from right to buy either and don’t have so much as a pension let alone a generous gold plated one. We didn’t have a car a children even though my dad could drive, none of the women in the family of that generation or before ever learned to drive.
I agree as well re: the huge unnecessary expenses that seem to surround children these day and we do try and reduce costs by e.g. hardly ever buying drinks or food out etc. We spend less on all their extra curricular than any one of our utilities or council tax. As for swimming lessons, we found as one of the other posters also did, swimming lessons for 2 children now cost less than a short family swim session at our local (contracted out) council pool (now £26 for 2 adults and 2 children!). Similarly when we’ve compared the costs of extra curricular run by the school then they’re approximately half the hourly rate of all the local childminders.

And fingers crossed interest rates fall.

To what? At best hope for 4% in the next 5 yrs or so. They aren’t going back to below 2% & I think it’s unlikely even 3% for a long time.

Utilities and food prices won’t go down either

Very true, the other group who tends to be woefully worse off are non resident parents without equity on average salaries (who are still very much involved in their children’s lives) we know someone who has recently separated who is paying maintenance, travel costs plus the rent and expenses of a 2 bedroom house and all the costs of having his children 1/3 of the time but none of the access to any of the benefits they would receive if they were the resident parent

Tbh I wouldn’t call it astute. DP and I used to be heavy drug addicts in early 20s. I had a psychotic breakdown and we both stopped the drug use. That meant we had a lot of spare money suddenly even on minimum wages and were used to slumming it. We pumped that all into saving, mortgages and house renovations while living in building sites. And had no choice really but to leave the party scene. It’s also when I started our businesses as I had lost my job. One now employs my DP and I full time and the other business is a slush account really.

So there’s a silver lining to everything I suppose and it still amazes me every day where we are compared to 10 years ago.

You do sound like you’ve done amazing to get to where you are now, no doubt you had a lot of bad luck that landed you with MH issues and both as drug addicts so is nice that the sun is shining on you at last and you no doubt appreciate it all the more given where you’ve come from

We pay £80pm in mortgage interest, this is due to luck in getting a mortgage rate under 1% when the world was falling apart and previous overpayments resulting in bigger equity and requiring lower mortgage.

We have been frugal for the last 15yrs since DH lost his job. We are now earning more than ever but continue to grow our savings instead of spending it. Thankfully we are past the childcare years. They were brutal on our finances.

We don't spend on mobile phones. I get top of the range ones from work every 2yrs, I look after them well and hand them down to DH and DC. They are on £10pm giffgaff rolling contracts.

We don't go to the cinema, we have a lot of the streaming services and I will sign up to Now Cinema for a month or rent it from Amazon so we can watch a new movie in the comfort of our home with our own snacks.

We rarely eat out, if hungry whilst out for a whole day we'd rather have a Greggs or something than a big meal in a restaurant. I like cooking, I'd rather go to the butcher for a decent steak than go to a steakhouse. I have friends that eat out and have takeaway a few times a week, my budget would be seriously blown if we did that.

We don't have a cleaner, decorator or gardener like some of my friends and family.

We paid cash for DHs car and mine is a company car so not ongoing payments for those.

We shop exclusively at Lidl, Aldi and B&M. I have never subscribed to the idea that branded stuff is better quality, only that they may have had the original idea or have been most successful with marketing. If I'm buying anything, I'm shopping around for the best price/ discount/ reviews and then buying via a cashback credit card (paid off in full the next month).

Our cheap life today is to finance our future goals. Be mortgage free before 50 and retire early.

As children grow they also become more expensive with hobbies, entertainment.

Even if that's true (is it true? childcare can be £500 a week), those things are optional and can be cut if necessary. I'm not saying you'd want to do that, but if money was tight, cutting a club, or doing less expensive entertainment stuff is there as an option.

If you want/need to work, childcare isn't an option.

Wait till they start university 🙈

The bank of Mum and Dad