Look rich but very poor

[greyfoxy]

I live in a lovely house in a nice area, I wear nice clothes and I know people perceive me as being well off. The truth is I have absolutely no money. It's 2 weeks until pay day and I have £15 left. I will end up using credit cards to buy the essentials which is why I'm in this mess - my repayments are huge.

Anyone else relate to this?

Nailed it! At 1 Avios per pound spent, with 2k per month spend the most they earn is 24,000 Aviis. That barely gets an off-peak return to New York. Further west is more. Even with an upgrade voucher it’s still only one ticket that they can just about get each year. So, either they spend a lot more than 2k a month on the card, or they don’t fly business class. I know which one I’m going with.

we fly business or first, never economy. But our household income is more than 3 times that poster’s. No Avios-collecting needed!

A dramatic change in circumstances meaning the OP can no longer afford the lifestyle she has done previously?

That's the very definition of living beyond your means...

“Annual income twenty pounds, annual expenditure nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty-pound ought and six, result misery.”

And if you died tomorrow would you feel you had lived your life well?

I think most private pensions are actually in occupational schemes, run by a professional manager. The scheme will have a mixture of cash, equities and bonds - both government and corporate - and the individual member can exercise very little control over how it's managed.

For individual private pensions or indeed a general investment portfolio, it depends on whether it's a pre-packaged investment product with a set asset allocation and one or more fund managers, or a SIPP where the individual selects their own investments. The right mix of equities to bonds or anything else depends on so many variables - individual risk appetite, time to retirement and so on. It's really difficult to give a one-size-fits all answer.

I manage my own SIPP. I'm 49 so still have close to two decades before I'm likely to draw on it and I have nothing in bonds. For my one defined contribution occupational pension I can't do anything about it anyway.

I guess it depends what you value - I'm not sure profligate spending and consumerism is living life well.

@MrsOpenWalletBackInTheDay Monzo is a bank, so you would have to open an account with them. I really rate them. I guess there must be other budget apps.

For seatfiller tickets I use centraltickets.co.uk.. Set up a separate email as they do send a lot of crap with some gems. I also use Today Tix during London Theatre Week and sometimes go to the Leicester Square booth. I often go to the theatre alone so I can get a single seat that no one wants.

Re OP, she hasnt shared any details so obviously people are making wrong assumptions, perhaps confusing her with subsequent posters.

I think a poster upthread compared me to her frugal aunt 😀and the story of my frugality is perhaps too long to explain but in a nutshell
Immigrant parents. DH first gen immigrant from the working class
No inheritances or family money at all.
No bank of Mum and Dad except for our educations
Two DC who will likely have a hard time buying or even renting in London or any big city given house prices. May need help with house deposit.
WFH so dont need expensive clothes
DH in a volatile profession with frequent layoffs, and over 50.

Seem good reasons to be frugal, but also I simply do not see the point of expensive things that do not give me pleasure. I sincerely do not enjoy posh hotels and like small AirBnBs and street food. I travel and go to the theatre and have hobbies, but on a budget.

Ohhhh. DP and I have wondered how other people who we know earn less than us seem to go on so many nice holidays. I'm not sure they're all scrimping and saving in other areas of their lives.

We earn quite well but we decided to prioritise homeownership above all else. For us, that means no holidays, a 12-year-old car and very few meals out or home improvements (we are saving for plastering etc, as we did the 'grotty house on a nice street' thing. The only thing we do really spend on is grocery shopping, which I see as an investment in health.

I'm actually trying to cut back even further. I don't think I mind, either. Quite like the challenge of dressing well, having nice weekends on not much money.

@scandista yes, I feel I have lived very well! As already explained above.

Firstly, it is bad news for stocks and shares. The stock market will suffer greatly and private pensions/investments may be wiped out. The value of the pound will drop significantly.

It would also mean interest rates on mortgages, personal loans, credit cards etc would literally go through the roof. Few people will have any cash left to spend, which means the economy stagnates. Companies will struggle to borrow cash and cover running costs, which will lead to massive redundancies and a greatly diminished prospect of finding other employment. No economic growth also means high inflation, which will chase up the cost of food, energy and basic services even further.

If you think the cost of living is high now you ain’t seen nothing yet…

Gobsmacked by the amount of ‘pretend’ rich people knowingly racking up debt rather than live within their considerable means. Shallow and so bloody stupid……. seriously wtf? If COL gets higher there are a lot of folk in for a rude awakening.

You sound very similar to me! I love a bargain.

That tends to be the seriously rich, old money, not those trying to portray an image, the seriously rich really don't need to worry about 'image'.

Exactly. I have some credit card debt, 0% interest for now and I have cut my spending down to bare bones in order to pay it off. The stress of debt is overwhelming and holidays aren’t the answer.

Spending and consumerism does not = happiness.

This is great advice

I wasn't quite old enough to remember the 1976 bonds crash but I do remember the 1980s and the mass unemployment, loss of houses and the utter bleakness .
It's fashionable to scoff if anyone mentions this period but it was truly awful and everyone knew families who lost jobs, their homes and the desperate scrum for any jobs going with thousands of applicants.
Credit barely existed then, it was hand to mouth
Our neighbours lost their house and with a young baby had to move in with parents
" Gizza job" Yosser summed up the despair
God I shudder to think we are heading that way but so many jobs would be at risk .

Hi
I certainly can.
I work and have 2 children.
I try and live within my means but my dad past away a couple of years ago and I spend over £6,000 on credit cards I think I have been trying to spend to make myself feel better.
My mortgage is coming up for renewal and I think they may say I can't afford it . I never defaulted but my income is low.
My work colleagues think I have a good life but I worry all the time. So I feel for you.
Keep in touch. Xx

Sorry to hear this @Carol52
Can you talk to anyone?
Could you find other ways to make yourself feel better?

Hi I have read you reply,
I live in Richmond.
Similar I only have a small mortgage live on my own with 2 children.
Only got into. Debt 2 years ok I list both my parents and feel very alone. I just spent on my credit card now have £6,000 I. Debt land gave a kart tone job due to ill health. Really worried about mortgage and don't want to worry kids

Please get some debt advice @Carol52 , you don't have to do this alone.

I don't find it surprising at all. We don't live in a rich neighbourhood, it's all very average price properties and everyone I've spoken to has very middle class jobs. But most of the cars are new and most households have more than one.

What have I just read!???

You could have decent holidays still and still get yourself out of debt.

But no. You HAVE to go skiiing?!

I have zero sympathy.

We are the same OP. We have several holidays a year. DC have expensive hobbies. A decent sized house. We bring home £7.5k a month. But we have £20k on credit cards. We pay the minimum each month. All on no interest rate offers. We also have a credit card we use and pay off in full each month (we correct avios so we can fly business class). This bill is around £2k a month. I would rather we didn't use it but DH racks it all up. After credit cards, mortgage and bills we are left with around £1.5k a month for food/petrol/social/DC. I've said to my mum a few times in passing that "we can't afford X" to which she replied "you've got loads of money". She doesn't know the truth. I've taken a second job in years gone by, she has never known this. Yes we should pay off the credit card debt and not go on holiday. But life is short and the DC are only young once.

You're very, very far from poor. You're well off, you just spend like fuck.

So much judgement. The cc debt could be anything and not necessarily fruitless spending. I have an SEN child who only leaves the house to go skiing. He learnt for free and loved it. We don't know any 'jones's' , none of our friends ski. It's up to us if we choose to take our DC on holiday/ have multiple holidays/go on holiday knowing we have debt. For my SEN child, a holiday is the only thing that gets him away from the house for a period of time.

We're comfortable with the level of debt and don't stress about it. We're chipping away at it.