How do some people achieve a seemingly high standard of living on lowish incomes?

[ChocolateWombat]

I posted this in the Credit Crunch thread too.

I've noticed that people on the same incomes seem to have very different standards of living. I know of people with similar incomes, who live in similar houses with the same number of kids who have very different lifestyles. None of them have run up massive credit card debts, so it must come down to spending patterns.

If you think you manage a better standard of living than people would expect for your income, I'd love to know your secrets on how to achieve it.
Many thanks.

I get where you are coming from morethanpotatoprints, I really do - but you say that But in terms of finance it really was a case of not spending a penny that wasn't necessary - yet so many people do that, don't receive a penny in tax credits because of their income levels, and still get caught in the trap of not having enough. In many areas across the UK, it's very very difficult to afford even the most basic of privately-owned house, childcare costs are crippling (but necessary if you want to work) and travel to work can also be very costly - the job market is such nowadays that you do have to accept that you will travel to work.

Ok, well I buy things from places where they are heavily discounted for a start - often somewhere like TKMaxx.

I don't take holidays, well, we may go camping once a year. That's it.

I don't drink alcohol or smoke.

I don't go out in the evenings or to theatres or concerts or other events.

We have a small TV, our furniture is very rarely new but usually old, second hand and bought from ebay or second hand shops.

I buy clothes new but only when they are in the sales.

I suppose that's how we do it. Just prioritising. As someone said, buying things that are far better quality, but reduced due to being discontinued or ex display or whatever, is quite nice because you end up with a maybe slightly dented or scruffy item that lasts you far longer, works better and doesn't need replacing quickly.

So our old cooker was from Argos and I hated it - maybe £199 or something - and then I got an ex display Smeg one which has lasted about 8 years so far and is still going strong. It's just nicer to use.

Oh should say the cooker was about 500 - I paid it off on finance over 6 months. It was originally around 1,000 I think. It had a couple of chips off the enamel and someone had returned it due to the thermocouples being a bit sluggish. We got over that.

Yes, it's not always about having the newest latest thing. I know people who frequently buy new curtains and furniture. It is because their old ones (which actually were not even very old) were not very good quality and were the latest thing when they were bought, so dated quickly. Hence they 'need' to buy a new set of everything every couple of years. So they are always having new stuff, but none of it is very good. It costs a lot to keep doing this though, so they don't have money for other things.
Buying quality and then keeping it, rather than being persuaded to get a new version because it is more in fashion, gives you better products and more money long term......to spend on whatever you fancy, or save if that is your leaning.

One very thing: before buying anything, ask yourself
Do I really need that?
More often than not the answer is NO.

Then be savvy. Don't buy the first you find but compare prices.
Don't reject some products because they don't gave a brand on them (from supermarket brand to computer etc...)
When you want to buy something, esp on the internet, put it in the basket and them wait a week or so. Ask yoursel in a week if you stil want it.
Use the SALES and so on
Do as many things as possible yourself.
Save ahead for specific occasions. I have a saving account for Christmas, one for b'day, one for hols and one for some specific activities (eg the swimming club needs to be paid all in ine go at the start if the year)
Look at what us important to you. I value good quality food so spend quite a but of money in that. I don't value going out I we rarely go to the restaurant. Same with outings/clothes/cars etc...

The big thing is you can NOT have everything at the same time.

Also be careful with the less than £15 spending. Whilst it might not be a lot all in one goo, the repetition means you end up spending a lot on unnecessary things. Things such as a coffee at Starbucks, having a snack at the vending machine at work etc
Same with the little nip to the shop in the middle if the week.

I think attitudes to material possessions come into it too. Some people do have a pretty high standard of living, but are not satisfied. They moan all the time about what other people have or things they want and can't afford. They then seem to have a lower standard of living. Am I daft saying that?

Other people who have less are often more contented. They are happy and not bothered about stuff they don't have. And their standard of living seems better.
Perhaps I'm muddling contented ness and standard of living. But actually contentedness is probably more important.

I read somewhere once you only see where a person chooses to spend money not where they don't, very true!

Our income went down by over half last year when I stopped work. We had to do a very radical re think of our money.

It was shocking to see where we had wasted money... Agree with posters above that it's the little spends...lunch, coffee, snacks, takeaways that add up to a lot.

Also I was doing a lot of 'emotional' spending... 'Treats' for myself to which I felt 'deserved' because I was doing a job that made me very stressed.

I gave up the job. Now I don't spend anything like as much on myself....I really don't need to, because my treats now are going to the library, or going for a walk

I think you see where people choose not to spend too. The person in the old car, has chosen not to spend on that. It's one of the most visible spending\not spending things. Likewise, you can see if someone has new carpets. Spending on services and leisure activities, like music lessons or days out maybe less visible. And I guess we all have a phone, but its not always obvious who is paying £25 per month for their broadband and who got it for £2.50.

But these are just minor things - although they add up, certainly. The big things are mortgage/rent, travel to and from work, and childcare - and then closely followed by utilities, council tax and food. Cutting back on a coffee once or twice a week will save you a fiver, I agree - but nowhere near enough to make a massive saving.

There are plenty of people on low incomes who don't fritter money away on treats/holidays/new goodies but still don't have the kind of lifestyle that others on similiar incomes have - although that quote upthread you only see where a person chooses to spend money not where they don't is very true!

We used to earn about £4k a month between us after tax and saved absolutely fuck all. We had no mortgage, no rent and no bills to pay so I can say with absolute certainty that we frittered the lot. It makes me feel sick now.

Now I am a SAHM, DH's income after tax is £2k a month, we have a mortgage and bills. Apart from owning fewer clothes I cannot see how our lives are different! That £4k went on nothing. Coffees and glasses of wine. Cinema. What else?! We have no big ticket items left from that period of our lives. We didn't buy a flash car or designer clothes.

What did we do with all that money?!

Anyway, the upshot is now we spend thoughtfully and are very happy, if on a tight budget.

I think if people actually sat down and looked at where their money was going it just might wake people up as to their spending habits. I am always amazed with df's who think nothing of spending around £5 in a coffee shop 3 or 4 times per week.
Had a great meal out on Saturday night for 75p. The rest was paid in Tesco vouchers.

I think it also depends on which part of the country you live in. The rent in London for example is almost 4 times higher than some towns in the north.

Mortgage and childcare costs are a huge factor.

I know people who bought at the right time then cashed in their equity and moved to a cheaper area so smaller mortgage.

Some people paid down mortgages when they were young and child free.

I think it is the minor things that add up, £5 on coffee once per week is £260 per year of taxed income. £10 here and there each week on non essentials adds up to another £520 and this is off taxed income. Add in papers, magazines etc and you are getting towards another £260 and add the tax on and it is probably adding up to somewhere conservately in the region of £1500-£1600 of salary before tax. You do that over 5 years and you are looking at £7500 or around £5000 of taxed salary.

We don't have much money but we all have small appetites and I think that makes a big difference to how much disposable income we have. Also my parents help me out a lot with car related expenses which is kind of them.

I think it's largely down to debt.

Some people with lowish incomes don't have any (often due to inheritance/parental help when buying thier first home) which means what they do have is mostly disposable income.

This is often due to inheritance/parental help when buying thier first home but in our case was down to a puritanical fear of debt which meant that we never went away for the first 5 years of our married life and had no TV for 3 years, no oven for the first year. People seeing us then wouldn't have thought we were comfortably off but by the time Dc came along we did Ok on a relatively small income because we had low out-goings. The age at which you have your first DC and how "set up" you are financially at that time makes a massive difference too.

Others give the illusion of having plenty of disposable income by having lots of credit card debt etc

I had a 7 year recovery plan when I left my x because I felt so shattered financially when I left that relationship. For a long time, all I could really do was save a few bob a week and wait for the children to grow older. I didn't have a car as that would have left me unable to save, and I felt frustrated in that period with small children, where childcare costs were HUGE so it made it really hard. I guess I belt-tightened (to the point of needing smelling salts!) so that I could save and see my savings increase. I didn't mean to be disingenuous but I know people assumed I was broker than I was so I was never asked to join people on skiing trips etc....

So, for me it was delayed gratification & planning. My 7 year recovery plan might take 9 years as it happens! but I will get there. I have the modest but secure roof over our heads part in place.

I would advise working locally too. Have commuted and worked locally and if you cut your expenses (travel, childcare, fancy lunches, endless collections, smart suits)

It is a mix of stuff....however for us

EVERYTHING we buy is on a budget/price compared/in the sale.

We change insurance provider every year, also gas, electricity supplier. With this alone I think we pay 20-30% less than friends who never swap.

Cars are NEVER bought from a garage, or if they are they have to be at bargainous prices.

Designer clothes are often from the sales....

Plumbers / builders / tilers etc etc are all done on multiple quotes

We have just re-done our house, decoration, kitchen, bathrooms, conservatory.... An acquaintance then said to me how lucky I was to be able to spend "£100,000+" on decorating.... I was a bit bemused, but then realised some people do spend that much, we have done the whole lot for under £25k including having an interior designer (who was actually free!!) sourcing all plumbing / kitchen ourselves (we have a "Designer" kitchen for £4k) etc etc. The conservatory was on sale and looks great - I have seen one at someone else's house which cost £25k which was our whole budget, on their conservatory alone and it is NO DIFFERENT to ours, just from a big brand window company.

You do that over 5 years and you are looking at £7500 or around £5000 of taxed salary

Absolutely (although I think that figure is towards the higher end of frippery spend) - but that doesn't even begin to compare to the biggies like mortgage/rent/childcare and then utilities/food/etc. I don't spend money on coffees/magazines/takeaways very often - there just isn't the money left over once I've paid for the essentials, and we're on a decent income. How on earth people on low incomes manage it I don't know

Oh - and we shop for bargains/ebay/gumtree etc

"They moan all the time about what other people have or things they want and can't afford. They then seem to have a lower standard of living"

Comparison is the death of happiness

SirChenjin I was basing it on excess spending of £20 per week on a range of items including food shopping and coffees and everything in between.

I actually think that judging by a lot of people I know £20 per week excess spending is a drop in the ocean.

Quite agree Cogito - bloody hard not to though, when you're working all the hours, never seem to see any real improvements in your standard of living and people who you know are on less than you (know as in they tell you) enjoy the kind of lifestyle you can only dream of - neighbour, you know who you are! (bitter, moi? Hell, yeah )