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.

OTOH SirC, the neighbour could be lying about their low wage, of they may have other sources of income. Some people are competitively poor! Or it could all be on borrowed money.

We only have one income coming into the house currently. We are ok I think because I am frugal as hell.

Oh and also many people are subsidised by the bank of mum and dad. If not actually money in hand then certainly by free childcare. That can make a WORLD of difference.

Also we don't do big holidays. We do a few days here and few days there. This time we are going to do a staycation and take my son out to different places throughout the week. Really looking forward to it

We also paid off our mortgage several years ago so have no rent/mortgage to pay. Also, this obviously would not apply to everyone, we didn't have a child until our 40s so we had more or less paid the mortgage off by then, had savings/pension plan etc; were able to manage on one income (no childcare costs) and stuck to having just one child .

I am sure we appear to have a very comfortable life style (and we do) but we are happy to drive old bangers, dress in charity shop clothes, never go to posh hair dressers or beauticians etc; and a meal out is a very rare and occasional treat. My DB earns more than we do (I know because he was moaning about losing child benefit - we have not lost it) & constantly complains about being 'on the bread line' but all his family (5) have ipads and the latest mobile phones, buy new clothes regularly and update their cars every couple of years, and eat out 2-3 times a week - it all depends how you priortise your spending .

And it would be interesting to know RAGWORT if your brother thinks he or you has the highest standard of living. You obviously aren't so interested in mobile phones etc and the things he wishes he had, but he is.

Childcare. My lord, childcare costs, I could cry when I think about it.

I am mat leave with DC2, when/if I return to work in May, my childcare costs for 2 DCs will be £1236 per month for 3 days a week childcare. Over a year that's £14,832. It's only that 'low' because DC1 is entitled to 15 hours free. Thats a lot of family holidays, meals out, and posh handbags gone on childcare costs.

Even one day a week family care would make a massive difference to our family income.

Oh and I agree with sebsmummy1 - free childcare is like giving you money! I work with a woman who also does 3 days a week but her family do childcare. She was moaning that it wasn't fair that other people got large handouts from their parents to buy their houses, she'd get nothing etc, I pointed out that her parents doing the free childcare for her 1DC was the equivilant to giving her £750 a month. She looked a little shocked as she'd always had the offer of free childcare from being pregnant so had never looked into the costs.

A lot of people don't understand just how high a wage you have to be earning just to break even if you don't have free childcare.

Domus - not lying about their income levels, but definitely being funded by (his) parental money.

Ragwort - it's also possible to priortise your money, do the things you do, and still not be well off.

Another thing that makes a difference is who earns the household income. If it is all earned by one earner, they maybe a higher rate taxpayer and even if not, there's only 1 tax free allowance. If the income is split between 2 workers, there will be 2 tax free allowances and that can make people with the same household income quite a bit better off each month.

Oh - and they have no childcare costs thanks to both sets of parents

I think there can be lots of things you don't know about people's circumstances - mainly their housing costs and whether they have savings perhaps from an inheritance, also how big their mortgage is from when they were first able to get on the housing ladder, that sort of thing.

The support from parents can be quite subtle. We don't get either money or childcare support from our parents BUT we know that if we were ever truly stuck, they have the means to help, and would do so straight away. That in turn lets us take a few more gambles with life - to go for a new job that may be less secure, or buy a slightly larger house. And those gambles in turn often yield dividends. So far we've never had to ask for money from anyone, and like to think we never would but I do know I am very fortunate to have that safety net.

Hmm, OP, depends, childcare costs would wipe out most people's tax free allowance, we'd be better off if DH was the sole earner with the same total wage because we'd not have to pay childcare.

Also some people might appear to earn less than they do, job titles in industries like IT can be very similar but with £50k+ difference in salary.

Agree with earlier poster about how/when first property was purchased. We bought and sold flats and houses during the boom, we sold everything to buy our current house at the peek of the market, now we have a large house in a desirable location and no mortgage. Our friends, much higher earners than us(DS teacher and I'm a child-minder) really struggle but they have big mortgages.

Did I write DS? I meant DH!!

Actually lots of jobs are such you can have the same job title but very different roles and wages, I've seen jobs for PA roles that are paying £20k and ones paying £60k, but a lot of people assume an admin role isn't a well paid job.

One of the things that I value very highly is choice. Some people are able to make choices and others have very few options open to them.
Having savings, having a small or no mortgage or the option to underpay for a whole due to previous over payment etc etc mean people can choose whether to be thrifty or to splash out on any number of things that may be seen as denoting a high standard of living.
Having these choices gives people confidence. They may not choose to buy the new cars and holidays but they know they could have them if they wanted.
Other people perhaps have bought the cars etc but have little flexibility as they are spending to their limit and this makes them anxious (or not). Another group again haven't bought the cars etc and have little material goods, but also have nothing to give them options. As someone said up thread, you can be thrifty and still not have a good standard of living. I guess being careful still allows you to get the most out of your situation though.

When you got your mortgage plays a vast part in how much disposable income people have. Identical houses on our street have mortgages for a few pounds a month or several hundred a month.

But in terms of how people spend... I dunno. I'm always on the look out for bargain treats and experiences. We tend not to waste money, because we haven't got money to waste. Rarely throw out food as we don't buy more than we need. Same with clothes. I can count on one hand how often I've bought clothes I don't wear. Tend to shop in sales or online, especially for big items like furniture.

We use vouchers a lot for very cheap theatre seats or meals out that we couldn't otherwise afford. We shop around for foreign holidays and short UK breaks. If you really do your research, you can stay in gorgeous boutique places cheaper than a Travelodge. Or, if you aren't too picky you can go to a fabulous place but stay in a cheap caravan rather than pay a fortune for a cottage or gite. Still a great holiday in the same place.

There's also quite a lot of free stuff out there if you keep your eyes open. Cinema tickets, gigs, haircuts etc.

But its very true that people don't notice so much what you don't spend on. We're out living it up every weekend, but our poor house hasn't had a fresh lick of paint for years. It drives our house proud homebound neighbours mad.

Mortgage and food are our main outgoings (same as most people I guess)
Nothing we can do about the mortgage - 3 years left on a fixed rate deal - and food just seems to be going up all the time :(
We don't smoke, drink, go on fancy hols, go out etc.
We do have cable tv for us the kids which is our one treat.
I ebay stuff.
Get clothes for myself and dc off ebay, dye my own hair etc
Sometimes it gets me down BUT
I agree with cog (as usual!) comparison is the thief of joy

SirChinjin - I absolutely know that lots of people prioritise how they spend their money and are still not at all 'well off' - I am the first to admit that I have a very, very comfortable lifestyle. I am just using the example of myself compared to my brother in the 'choices' that we make. And yes, Chocolate - I would imagine that my DB considers we are much 'better off' than he is. But it's not a competition is it?

Dontmindifido, I take your point about childcare costs more than offsetting gains in tax free allowances. The phase of massive childcare costs however does not last forever for most people.
Related to this, I've known one or 2 women who have returned to work, perhaps part time knowing that in the short term they would make a loss because childcare costs exceeded their income. They did it with the longer term in mind, knowing they had kept their foot in the door and that promotions etc and being full time would be more likely later on, and recognised childcare wouldn't last forever. I'm not saying this was right or wrong, just financially savvy and again gave them more options later.
Some people like to work less as their children get older and think they make a big impact being at home in teenage years. Having reduced mortgage etc gives them the option to do that too.
All about giving yourself options, the more I think about it.

It is interesting and a lot of it comes down to prioritising / timing when you buy / what you choose to spend your money on, as well as the obvious inheritance.

We bought a (small, 1 bedroom) flat fairly young. Friends on the same salary as us kept saying they couldn't afford to buy a flat. What they actually meant was "we can't afford to buy the size of flat we want to live in and keep doing our weekends away/restaurants etc."

Fast forward 5 years and we were lucky to be able to sell our small flat with a tidy profit and buy a bigger, 2-bed flat (also on the back of other savings we'd worked hard to save). Our friends are still renting because they can't afford a deposit on a 2-bed, which they need as they now have DC. They weren't prepared to downsize to a 1-bed when they were a young couple.

I'm not at all convinced by all the we only buy on EBay, Charity shops, everything comes from the sales, we look out for voucher codes people.

IME that all means you end up spending more than you would otherwise have done. That pizza may have been a "bargain" but it still cost money you wouldn't have spent if you'd cooked for yourself. The vouchers are designed to make you spend money you wouldn't otherwise have spent.

With 2nd hand/sales shopping there's too much pressure to buy it while it's there rather than taking time to consider if you really want/need it and if it's a fair price for the quality etc.

That's only true if you look for reasons to spend. If you acknowledge that you need something, rather than want something, and then use discounts/sales/ebay/charity shops to source that need, then you will be saving, absolutely.