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.

Depends on what you mean by a better standard of living. I don't think we'd be classed as having a good standard of living but we're not in any debt so I'm happy to share my tips:

No monthly contracts. That means no satellite TV, no phone contracts. The only contract I do have is broadband. We use pay as you go on the phones, getting free texts for a month and then I top up a tenner which usually lasts another month (2 for dh). So £5/£8 a month on phones.

Budget shopping. If I have time I'll buy tinned stuff, veg, fruit, etc from Aldi and the meat from the reduced meat section at Asda in the morning.

Loyalty cards. I have a Sainbury and a Coop loyalty card and I'll save up the points each year to use towards Christmas.

Bills. We don't have the heating on at night or when we are out of the house and radiators are off in rooms we don't use. We have an open fire so we light that in the evening. I pay £59 a month for both electric and gas.

Mortgage. We overpay every month by agreement to try and pay it off quicker. If I ever have more money left at the end of the month I'll put it into the mortgage. The quicker you pay it off the more you'll save in interest.

Second-hand. Nothing is new. People still get rid of lovely stuff that you'd pay a fortune for in the shops. The kids both got stunt scooters for Christmas that were second hand, I just purchased new gripper strips and handles for them and they looked as good as new. Same with clothes, furniture, etc. If we need something then I'll try and get it second-hand.

Food. I make my own bread, cakes, etc and can save a fortune on packed lunches by using leftover pasta to make a pasta salad, leftover stew can go into pastry parcels, leftover curry makes a good curry wrap, etc. Pies cover everything and are brilliant for leftover meat.

Can't afford it? Then we don't get it. Nothing is worth getting into debt for.

So we live according to our means and even have enough leftover to treat ourselves to the odd meal out or weekend away. I know that our joint income would see us regarded as below the average wage for one person, but it makes no difference to us because of our spending habits. We probably have more disposable income than people on much higher incomes because we are careful with our money and are well trained in making it go further.

Hi Domus,
You're right if you end up buying stuff you otherwise wouldn't. But, for example, I really wanted to take my DC to the theatre for years but couldn't afford it. £200 for West end shows, plus trains to london and something to eat. But with vouchers, we've been to shows for £40-100 for the whole family.

Massive savings like that can make it look from the outside as though you are spending more than you are, which is what the OP was talking about. Of course we all spend less if we stay at home watching tv and making our own pizzas (which we also do a lot of the time.) But the point was that it's possible to have an externally desirable or expensive life style for a fraction of what it appears to cost at first glance.

One year we went on holiday three times. I could see people in the playground raising brows as they knew we earn less than them. (DH and I are in very obviously modestly paid jobs.) But one was staying with family in a very touristy place, one was staying in a cottage lent for free by friends in another very popular place to holiday and the third was a super cheap deal on a top end holiday which I got by cruising the last minute sites for half an hour every night for two weeks and snapping it up as soon as it appeared. Next time I looked, the same holiday on the same site was double the price. We always buy train tickets online well in advance. A friend always buys them the week she needs them. We spend about 50-70% less on the same tickets.

These deals are worth it - not to spend money you wouldn't otherwise spend, obv, but to save money you intended to spend already.

We also do absolutely all of the things THERhubarb lists, without even thinking about it. I think it's that second nature frugality or spendthrift attitude that makes a big difference over time.

Exactly woodrunner. My first thought is always; "how cheap can I get this for?" It's in my nature. I was brought up that way and I've never had any spare cash to go mad with, so I've always had to budget.

Before you buy anything you need to ask 2 questions:

1. Do I really need this?
2. Can I get it cheaper elsewhere?

Agree. I'm now in the habit of looking online for discount vouchers if I need anything or if I'm going anywhere. We went out for DHs birthday lunch yesterday - a HUGE treat for the 5 of us to eat out. I googled and found a place which gave me a 20% NHS discount. I also had to replace a pair of shoes for DS1 recently - he had forgotten his Young Scot card, but I spoke to the manager and got her to agree to honouring the discount he would normally get. I look around for bargains all the time - and never, ever walk past a charity shop!

"and never, ever walk past a charity shop!" But that's exactly what I mean. It's different if there's something you want/need and you look in the Charity shop first but if you go in every one you walk past you must occasionally buy things you would have managed perfectly happily without.

It is easy to end up buying things you don't need, even if you think you are very thrifty. Yes, vouchers and discounts are to get you to spend. I think the Internet can encourage us to spend more if we love a bargain. It is too easy to have a quick look online at sale sites or discount code sites and find something which is a bargain. It's quite hard to resist something we don't really need, which is a good buy.
My example is I see bargains online and buy them as presents ready for Christmas or birthdays. However, some of them are still in the present box 5 years later. Not such a bargain. Now I only allow myself to buy the bargain if I have a specific person in mind for it.

I love a quick look at moneysavingexpert etc. I had a phase of being tempted by restaurant vouchers. As Domus says, I ended up spending when I wouldn't have done otherwise. I try to resist that now.
Actually, not going online or looking at shopping websites helps, in the same way that not visiting the High Street does.

Likewise, not looking at Mumsnet bargain threads also helps. Otherwise you see a bargain that you never knew before that you needed! Except for finger lights of course......46p and DCs absolute favourite present. Never knew we needed them until Mumsnet.

I watched an American programme called Extreme Cheapskates. On one episode there was a family living in an absolutely beautiful 1 million dollar home. They brought it as short sale which I thinks like repossession for 450,000 dollars and sold the basement on as a flat for 225,000 dollars. The lady in the programme knocked at her neighbours doors for left over food they may have, baked cookies on her dashboard as it was so hot there and rationed toilet paper to three squares a time. I know this is extreme but I was absolutely amazed at what is possible. She was gorgeous, three lovely children who looked so healthy. I felt like such a waster after watching it.

You can take moneysaving too far though. Im not interested in making us all miserable due to stinginess (although stinginess would be judged differently by different people). I'm interested in achieving the tricky balance of the best standard of living for BOTH today and the future that we can, on our income. It's a difficult balancing act of working out what we really value and what sacrifices we can make which won't feel like big sacrifices to us, which allow us to be happy now and have more options into the future.

We overpaid our mortgage every month from the start - saved 7 years and £27,000... which was nice.... now mortgage free..

we also do not buy "new" cars and manage with one + bus and occasional taxis.

we have savings, pensions and money for the kids' education - BUT before I go out and spend any money on anything I still look for a deal/voucher online first....

our "thing" is holidays, we enjoy time away together, so if folks were to just look at our going away habits they would think we had a heck of a lot more than we do - because they think we are paying a mortgage and would have a couple of cars etc.....

It's trial and error. Try cutting back on things and see if you actually miss them.

we have a decent standard of living, we have a car each, have treats like going for lunches, nights out, clothes shoppping etc and don't struggle to pay the bills and in the space of 18 months we have been to Sicily, California and New York on holiday

i am mainly a SAHM now of 2 dcs although did used to do a bit of self employed work but didn't need to and now am pregnant with dc3 have cut right back

we have had people be a bit sniffy about how we do the things we do. but i have to say it is solely because DH earns about 35k but we are in a council house and the rent is affordable. also our cars are not expensive to run or flashy and we have no debts

however this may all change and we will be skint soon! as we are hoping to get a mortgage this year as all the changes to council housing are a bit worrying and we don't feel as secure as we used to.

What has worked for us too us to carefully look at our budget. Ie where do we spend the money, what for.
We now are using credit cards, always paid in full at the end of the month, because that wAy you know immediately how you have spend the money.
The 'oh it was just £5.00' is showing up whereas with cash it just disappears and you don't know where. With the card, it IS showing and it gets easy to see that actually we have spend about £100 this month on 'bits' that we probably didn't need.
Very good for self awareness.

Just out of interest, lots of you are obviously doing very well with money and I just wonder if you tend to prioritise the future over now, in terms of spending decisions? How far do you sacrifice today in order to have more tomorrow? And is there anything particular you hope to have in the future or is it just a general thing?
Thanks so much for all the ideas so far. Lots of interesting and wise stuff.

"and never, ever walk past a charity shop!" But that's exactly what I mean. It's different if there's something you want/need and you look in the Charity shop first but if you go in every one you walk past you must occasionally buy things you would have managed perfectly happily without.

That was a bit tongue in cheek, but with 3 DCs and 2 of us there is usually something that someone needs, either now or in the coming year. I will occasionally spend a few quid on things I don't need, but £3.50 for a new top or whatever from one of the higher end places is fine by me. My house is certainly not groaning under the weight of charity shop tat I don't need

Not sure I am doing very well tbh.
For me it's a mixture if knowing what it is I consider 'essential' on a day to day basis and putting those first and then using the rest for planning.
Did much better when I was working full time with one child than now with 2 dcs and a part time job! Mainly because we have put the priority to the present (activities for the dcs for example) as I see that as an investment for their future too.

It's a balance...we do pay into pensions and savings for the future and have done since our early 20s (mid 40snow). But lately we've tried to live a bit more 'in the moment' as our eldest will be leaving home soon for university...we wanted to have a couple of family holidays that were bigger than usual (ie not rainy camping in the UK!), whilst all our DCs were still 'at home'. We envisage our outgoings going down over the next few years with a loan etc coming to an end, so we felt we could splash out a bit now. But we had to really enjoy the holidays, knowing that they were one-offs, not a regular thing.

I'd also say I've got more confident with age and as my DCs get older. I did spend too much when they were little trying to 'keep up' with other families, and feeling like a bad mother if I wasn't. Now I'm over that phase it's much easier! They do a lot of activities but cheaply...sing in choir, play football, bike rides etc. I no longer spend on bloody ballet and riding lessons because that's what everyone else is doing! (They didn't even enjoy it that much!!!)

Good advice Dolly. There are definitely times to live in the 'now' and splash out. I can see your example of children being about to leave home being a really important time. But equally, I see you didn't need or couldn't have that all the time.

Things I might consider going without generally, but having when the time makes it important are,
One big school trip abroad. Gives great memories. Not necessary to go very year.
One trip in childhood to Disney Paris. as above.
Very occasional expensive clothes or shoes for children. If it is important to them. (Hope not)
Very occasional stay in a hotel because of a good friends wedding or party.
The things I would happily go without which are perhaps more regular expenses would be,
Sky TV
Gym membership
New cars or regularly replaced cars
Foreign holidays
Eating out as a family
Having heating on a lot
Toys outside of birthday or Christmas
In terms of the future, I might like to send my child to private school and I would like to retire early. I realise from this thread that getting housing costs down as early as poss make it more possible.

With us - money goes on essentials first, "really wants" second, then the rest gets divided between nice to have (gadgets,furniture etc) and savings for future..

I manage a care service. Care work is notoriously badly paid and I noticed that many of our care assistants who have partners and families seemed to live very well on their fairly modest incomes. I now know this is down to very careful planning, often including the following:

1. Most of them bought bouses when they were quite young, so have low mortgage outgoings.
2. Work about 20 hours a week, with an income of just under £10k so you don't pay any tax.
3. Only work when DP or other family member can help with child care, so no child care costs.

There are not many women outside London and very highly paid jobs who have half their time to themselves, £800 left after commuting and child care paid for each month ( my staff work in the community so they have 45p per mile mileage too, which goes a long way towards running a car. )

I manage 30+ staff working in this way and I work full time on a decent salary. I've worked out if I still had 2 children needing child care I'd be £200 a month better off for working full time ( 35 hours ) that the care staff and I'd be running my own car in full out of that too.

This year dh is working full time on average wage and I work 12 hours a week term time only. Mortgage is at a low rate but I also received an inheritance which has paid for an extension to the house and dh bought me a beautiful eternity ring. We get lots of free holidays and perks through dh's job that we could never afford if we had to pay but from the outside I guess people will think we are constantly taking dc to places like Chessington and staying in hotels so we must be loaded. Nobody knows what goes on behind closed doors.

A couple we knew years ago when we'd just bought our first house had everything - flat screen tv that cost £1,400 (which they told everyone), stunning house, 2 brand new cars. Dh and I were a bit jealous until at a dinner party they made a comment that made it clear everything they owned, including their bed, was on credit. I would hate to live like that, but obviously worked for them. My jealousy disappeared and I've realised that you can never judge as you never know the full story.

ChocolateWombat a bit of both.

We need to save for the future, for pensions and for the dcs, but we also realise that our mortgage will be paid off and once the children have left home and have settled, they won't cost us as much money hopefully, so we don't spend too much time worrying about it.

I tend to save for Christmas and holidays, making savings now means that I can better enjoy the holiday season without worrying about what money we're spending.

You also have to be able to live your life. I can't imagine not spending and scrimping all my life until I'm 65 as I'll be too damned old then to enjoy it properly! The kids need treats from time to time, etc. I guess that's where vouchers come in, to make those treats more affordable.

Luxuries though are just that. You can do without satellite TV and phone contracts, we manage perfectly well without. We don't need a new 3 piece suite and we don't eat out all the time, preferring to take picnics. It's when you start taking luxuries for granted or seeing them as essentials that you get into trouble.

I've found sometimes lots of small treats is actually cheaper than none and a blow out. For example on Tuesdays I buy a magazine both my DH read and we have film and bottle of wine night. Doing small but nice things often can help us not go as mad on the weekends or payday. I've tried cutting down on Sky tv but can't so have worked out that is important to me. Since the new year we have been having a no takeaway challenge as a family and have been really enjoying it. The children have been thinking up good alternative meals. We had tapas night on Saturday instead of our usual curry takeaway.
Cutting back on holidays would be really hard for me, the same for family days out but I'm not bothered about clothes shopping.