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.

Creamy
Have you rung sky and told them you are going to leave? You may be able to get your package cheaper.

The small treats are important. Non essentials like going swimming sometimes, having a lolly from an ice cream van, a frivolous not needed pair of socks or pencil case, nice cake etc stop life becoming mundane. If you had the, all the time though, they wouldn't be treats or enjoyable.

For my DC it is having a slush puppie. I think they are crap and a waste of money. However there is a place we go to about 2 or 3 times a year and she is allowed one there. Honestly, you'd think she'd been given a diamond ring. Perhaps I'm a meanie!

Yes I do it about every three months. I got sky movies for half price this time, the DC's boxes for half price last time. I do it with broad band too.

Marking my place on this thread.

We used to have not much between us but never really felt like we were skint, then we had DC and were skint for a while but it was a gradual reduction of money then a gradual increase. Then we emigrated and DH's salary is very good (I currently can't work) but our outgoings are much higher.

We've Realised like a PP that it feels like we have no idea what we've been spending our money on and while we have no debts (bar the mortgage at home which is covered by the tenant) we also have no savings, so we're trying to build up an emergency find over the next few months which will mean watching where we spend everywhere else. Hopefully by the time the fund is fulfilled we'll be used to saving and spending the new amounts and can save for fun stuff instead.

But it's meaning a major overhaul of tracking our spending because it must be going on something - despite the fact I feel like I menu plan, only buy clothes when necessary and from cheap or charity shop places, we don't get new furniture etc

We are starting to do more babysitting swaps with other families which saves a fortune (god I miss being home surrounded by friends and family who babysat for free constantly!), even took our own popcorn to the movies last night and biked there to avoid parking and petrol....

I've found it really interesting to read through this thread because DH and I often have similar thoughts to Chocolate Wombat!

We have a relatively small income but quite high mortgage repayments which we are due to pay for another 15 years. DH is 56 and I am 50. It's quite a struggle but we have learned how to be very thrifty. We overpay the mortgage by £50 a month. We can only afford our house because we don't pay into pensions. That was a specific choice we made, we chose to buy a house instead of paying into pensions as we couldn't afford to do both. Once I reach retirement age we plan to sell up and move to a tiny cottage hopefully somewhere nearish to the sea, maybe in Wales where property is cheaper. We hope by then to have a bit of savings to supplement our basic government pensions. But, as I say, we are used to living frugally, growing our own veg and making meals very cheaply. We will save a fortune once the DCs are independent! Although we hope there is enough equity when we come to sell to be able to give both of them some kind of lump sum towards a deposit for places of their own otherwise I struggle to imagine how they will get on the housing ladder at all unless they marry high above their station (he he)!!

We go without quite a lot but generally don't consider ourselves to be missing out. We enjoy doing things that are free (eg walking, playing games, reading). We have never had Sky, run one old banger, rarely eat out, don't go to the pub or drink or smoke. DH and I only buy new clothes, shoes etc when what we have wears out and I always scour the charity shops first to see if I can find what we need before buying anything new. The exception to this is whatever the DCs need although it is more what they "need" than what they "want". Non-essential clothes and treats etc are reserved for Christmas and birthday presents. Most of our close friends are in similar positions so we go to each other's homes for pot luck dinners and usually bring one course each. Holidays are scarce, maybe camping or staying with a friend or relative if we are really lucky. Lack of holidays/travelling is probably the one thing I would change if finances allowed. We do as much DIY ourselves as we can. I never buy magazines or daily coffees and our only credit debt is my train season ticket but I shop around for interest free credit cards for that.

Our friends say our house is beautiful, which makes me very proud, because it is mostly furnished with second-hand stuff (including bits from Freecycle and out of skips) or pieces bought very cheaply in sales. If I see a 70% off sale sign - I am in there! But have learnt to think very carefully before buying anything at all, and only buying what we really need. But we spend a lot of our free time in our home rather than spending money going out and so I feel justified in spending what I can afford to make it a lovely and comfortable place to be.

We use the local library for books, rent DVDs instead of going to the cinema and get our popcorn from the pound shop.

Our friends who do all the holidays, brand new cars, all the latest gadgets etc are able to do so because they have inherited money from parents and grandparents or else own their own businesses and make a lot of money and/or have good accountants who know all the tax breaks! I have friends who earn over £100k a year but (legally) pay less in tax than I do on a £25k PAYE salary. It's handy when you can claim that the massive widescreen TV, both cars, all your Ipads, laptops, clothes, meals out etc etc are all tax-deductible!

What posters say above about childcare costs is so true - having family members who are happy to look after your children is an absolute God-send financially. But not everyone lives close enough to grandparents to make this viable and not all grandparents are fit enough or willing to give up their freedom to look after yet another generation of children!

Thriftymrs are you pleased with your life choices? It sounds like to can do a lot of nearly free stuff as you have such a lovely home and enjoy having people over etc.

It's interesting to think how many to these outcomes are due to life choices. Some of it is clearly beyond people's control. I'm thinking about things like when you meet your life partner and that to a large extent determining when you have children (for most people although not all)
Which things are choices within our control, which we might look back at and be pleased or sorry about?
Perhaps
When we chose to buy a first property and later moving decisions
Choices about pension payments
The kind of holidays we have had over the years
Choices about giving up work or working full time or part time
Choices about hobbies and leisure
Any others?

My mum was brilliant at small treats.. I loved malt loaf as a child and mum would get it as a treat occasionally. I was astounded when i started shopping for myself and realized how cheap it is. Of course if she'd bought it every week it wouldn't have been a treat...

ChocolateWombat Luckily I married a man who is as careful with money as I am.
I got pregnant by accident.
We bought our first house, a small 2up 2 down terraced which we then sold and lived in a caravan in France for a while. That was when the housing bubble burst. We got jobs in France and so we were able to save some of the money from the sale of the house.
We moved back to UK after 2 years, rented for a further 4 years then used the money from the first sale as a deposit on the house we're in now.
Neither of us had pensions, dh's company now have one and I've just started paying into one.
I have to work in order to make ends meet, but with no childcare around here I work part time from home. It's low pay but it does pay the mortgage every month.
No expensive hobbies.
DIY holidays, not packages and we aren't fussy about where we stay, we like budget places, often renting direct from the owner or staying in youth hostels. For us it's just a bed, we are out during the day.
Much of our money goes on travelling 200 miles and back to visit family as they rarely come to see us.

I think some of the discrepancy may be that a lot of people have now inherited the crazy housing boom money and keep it quiet - so you may know that they are on similar income to you but not that they have inherited a lump sum and paid of the mortgage (or done the same through some other means) which makes a massive difference. I know a couple on one, very low income, who have a reasonable lifestyle, big house in SW London, because they live in one of their parent's properties, which they've had since the sixties and hence has no mortgage on it. Mortgage/rent is most people's biggest outgoing, so if you don't have that, you can live of a much more modest income.

Domus, I love malt loaf.

I assume that they may have paid off their mortgage? If you bought a house in your early 20s as many 40 something people did then you'd have it paid off by now and so have more disposable income unless you extended the mortgage to have a bigger house. Most of my DCs friends have much larger houses than we have, we started with a 3 bed semi and still have a 3 bed semi with no mortgage whereas they have 4 or 5 bedroomed detached houses and a huge mortgage.

I agree the biggest difference is when someone has bought their house or how much rent is. Then the next difference is energy costs - houses vary wildly as to how well they retain heat etc. You can do some stuff cheaply to improve it but a lot of it is down to the design of the house.

Chocolate.

Yes, I totally agree and also believe that if it is purely financial control you are talking about sometimes its not possible to do what you would like, and this in turn can save you money.

When we first started off their were no tax credits, so no help with childcare, short maternity leave and childcare was sporadic, certainly no breakfast/after school care.
If you couldn't afford childcare or had no parents to help, one of you didn't work, it was as simple as that.

I was lucky and chose sahm so the lack of childcare, running another car, extra fuel, other work related costs have saved us so much over the years. This money has enabled us to provide a pension for the future, but at the time there was never sufficient to pay into a scheme, iyswim.

I guess its living with what you have at the time, gov policies of the time, inflation, interest rates etc and just doing the savvy thing. But of course that's just from a financial p.o.v its harder when you include personal preferences.

Living close enough to walk or bus (£1.20 per day) has probably saved us £3K per yr on petrol plus running costs now we only need one car.

Only one child

Lucky mortgage - got tracker about 8 years ago and have only been paying 0.18% above base rate, this has allowed us to spend £20k on new kitchen and bathroom plus misc other building work

Have been in my job 24 years so very lucky to be able to negotiate term time school hours (i sometimes make up hours at weekends when DH home ) so no child care costs now DS at school.
Could all be very different if I didn't have a great boss and interest rates hadn't dropped when they did - i count my lucky stars every day!

Creamy - am I pleased with my life choices? I'm not sure how to answer that.....it's so easy with hindsight to see where I went wrong and how I could have done things differently which may have had a positive impact on how my life is right at this moment in time.

I often think we should have moved to the coast years ago - but had we done that we wouldn't have ended up adopting the amazing children that we have. We spent a huge amount of money prior to that on unsuccessful IVF as we were victims of the "IVF postcode lottery" at that time and we had to pay privately for all our treatment.

I do wish I hadn't chosen a job where I have to commute - the 4 hours a day on top of an 8 hour working day is getting too much in all honesty but my job is quite specialised and there is nothing available locally although I do live in hope of finding something (anything) at a comparable salary.

DH gave up his job when we adopted our children. It was a requirement of Social Services at the time that one parent became the full time carer. I am not sure if that rule still applies now. As I was the higher earner, it made financial sense for DH to give up his job. In hindsight, we should both have tried to keep our respective jobs and each gone part-time. Now our children are older DH is trying to get back into the work place but finding it very difficult to find anything because he has been a stay at home dad for so long (prospective employers see it as "unemployed" unfortunately). He's working as a volunteer at the moment in the hope it will eventually lead to a paid role.

I can happily live without all the latest stuff although I think it's harder for the DCs but we try and save to give them a nice present at Christmas and birthday and extended family will chip in. Currently saving for a laptop which we have promised the eldest for her A levels. If we ask the rest of the famly, they will send her money instead of gifts for her 16th and hopefully, if we pool it all, there will be enough.

We are unlikely to inherit any money from relatives and have worked hard ourselves for everything we have so we value what we have very highly. Ultimately what we value the most is ours and the DCs health and happiness. I have friends and relatives with very high incomes who seem to be very dissatisfied with their lives, their children are ungrateful and greedy even though they seem to have everything materially they could wish for.

Going back even further, I wish I'd worked harder at school, gone to Uni and got a degree. But then I may never have met my DH (who I adore).

I suppose it comes down to what matters most to the individual. I've been married for 22 years and still adore my husband as much as I did in the beginning. We have two fabulous DCs. We are lucky to have been born at a time when buying a home was affordable. We can afford to have the heating on. There is food in the fridge. I have a job. We have a car. Things could be so much worse. I just keep my fingers crossed that there will still be a state pension by the time we retire.

Sometimes I think we focus to much on things we could have done better or smarter rather than what we did right. I'm not sure if it's a fear of feeling or seeming smug.

It's seeming to me that there are times in our lives when we have financial flexibility and times when we don't. Pre children there is more flexibility and choices made then can make a big difference later, such as over paying the mortgage.
Perhaps the hardest phase for many is when children are very young and incomes may be reduced but there is also childcare costs, plus you might have moved to a bigger house. Little or no flexibility. Then the only things to be done are to have less coffees out, which will make limited, but small savings. Many people on Mumsnet are in that phase of life and lack financial flexibility.
Once children are older perhaps there is more flexibility as less childcare and perhaps more opportunities to work again. At that point choics like over paying the mortgage or increasing pension payment can be made. Many people choose not to do these things though. Saving during this phase might might the nest expensive phase easier.
The Uni phase must be pretty expensive too, but easier if you have used the earlier flexible times wisely.

After this, we all hope to be better off financially (although Im told kids don't leave home until they are in their 30s!!). There's more flexibility again. Perhaps we choose to treat ourselves after years of Uni fees....or save for retirement.

I know I would like to use those flexible periods to best advantage. However, I also want to live now and not always be thinking of the future. Today matters for our children who will remember their childhoods (and material things are by no means the most important, but a total lack of them will be remembered) and for us too. Within reason and within budget we shouldn't totally deny ourselves the things that make us happy. Especially the little ones.

Sometimes the choice isn't there. Being made redundant just after having children made me a SAHM when I didn't plan to be one for example.
And yes when children are still primary age, the childcare cost are high and we don't even have to pay for the hols as my parents very kindly have had the dcs.
But that would a good £100~200 that we could put aside (probably for a fund for Uni for them)

That is a very nice thread I have to say. Reminded me why I do try and do things in a certain way and what I should be more careful about.

I think life choices make a massive difference. We live rurally (through necessity) and hence pay a fortune for oil to heat the house/water compared to somebody on gas. Also we have to run two cars to get to and from work and pay £100s on petrol a month. Also house prices are higher round here. We cannot move due to personal reasons and the fact that we are needed here.
Compare that with my colleague - almost identical income and mortgage. But she has 3 big holidays a year (we have none), drives a nice car and saves, saves, saves. But she lives near work, has one car in family, has a bigger house than us but it is new and therefore very heating efficient etc (compared to our old drafty money pit) and it needs no maintenance.
Life choices - we chose the hard route, she chose the easier!!!
It makes me feel regularly sad but I am not hard enough to leave - so my choice!

And she got childcare from her mum/dad - we paid nursery fees!!!

I don't think we have done too badly in terms of choices. I could have bought earlier when I had my first job and lived somewhere where property was cheap, but I delayed 3 years until I was in my second job and living elsewhere. However I have always saved and been pretty frugal. Have overpaid the mortgage especially when I still worked full time and in the last 5 years by maintaining old payments when interest rates fell. Guess I could have moved more often to bigger more expensive houses to benefit from equity rises, but then I'd have a bigger mortgage too. No major regrets so far. However not sure how affluent we will be in retirement.