So spending 5k on a ‘pushbike’ is ok but spending similar on lunch, gymwear and stainless steel kitchen gadgets makes you a BSD…..
I think your figures are pretty out of date as well – these days you need more than 5k take home to afford the lifestyle in your description!
What people spend their money on wasn't really the point of my post.
But, yes you do need to earn a LOT more than £5k a month to have that kind of lifestyle, that was the point of my post - I was explaining how pre-crash (10 years ago now) how people who were earning £100k a year thought it allowed them the sort of lifestyle I gave an example of above, but it really didn't, however they got away with it because, at the time you could live beyond your means pretty easily.
I was really posting in response to someone who found it hard to believe that someone who earned £5k a month could be so naive, but that's really how a lot of people lived day to day.
I was just going to mention eat well for less.
Had a mate of my son round today he's 7 or 8. Want a pack of crisps? Are they walkers" No "no thanks then".
One of the issues with lack of disposable income is housing cost inflation. Constrained/under supply of property and over supply of money has driven house price inflation with increasing proportion of income spent on housing costs ( mortgage or rent). Clearly this is doubly so in SE and even worse in London.
I'm so pleased that I'm on the right side of this bit of history having bought 20 years ago and paid off mortgage - and live in the north where the lunacy is not quite as bad.
It will all go tits up at some point when interest rates go up.
Had a mate of my son round today he’s 7 or 8. Want a pack of crisps? Are they walkers” No “no thanks then”.
Perhaps he’s committed to eating shit crisps?
I think working hard has very little to do with financial wealth, more luck in terms of the profession you choose / qualifications you achieved etc. Some professions pay handsomely, some don’t e.g. care industry. I suspect most care workers work very hard for their meagre salary.
Not entirely sure I agree here, at least not completely. I worked hard-ish at school, got decent exam results, decent A-levels and went to a decent university. I choose a course (Electrical Engineering) that I thought was both interesting to me and valuable to an employer. I also sourced (by myself) sponsorship from a local electronics firm who paid me a modest pittance to work for them in the holidays, which I did. It meant that I worked full time during every holiday from uni, but I could at least more or less support myself and I never stacked shelves at Tesco!
When I left uni (with a moderately good honours degree), I returned to my sponsor company and worked for them for 3 years, after which time I switched career and moved into software and IT where I still am today.
I probably missed out on a few things - I always regret never taking a gap year, or in fact any time off at all (I don't think I've ever had more than a two week holiday since I left school) - but I have worked hard to get myself to where I am and I don't feel that this is something I lucked into, although perhaps I have been fortunate in how things worked out. I had a plan (of sorts) and I followed through on it to have a successful career.
I do think it's unfair that certain careers pay very poorly. I also think it's very unfair that students today leave university saddled with debt, something that the lawmakers who changed the rules to bring this about never had to worry about. But I don't, personally, consider that having a successful career is something that others can or should just attribute to "luck".
But I don’t, personally, consider that having a successful career is something that others can or should just attribute to “luck”.
Its all just random segregation and crossing over. Some work hard to fail all their gcse's.
But I don’t, personally, consider that having a successful career is something that others can or should just attribute to “luck”.
My point was it's not just down to hard work, plenty of people work very hard and get paid bugger all for it.
Plus I think being born in the UK, with professionals as parents (in my case) was a huge stroke of luck which probably had a bigger influence on my financial outcome than I'd like to admit....
The las time we remortgaged the advisor was going through the affordability checker. He asked how much I spend on clothes, I said around £300 - £500. He assumed I meant monthly, I meant annually. He said it was quite common to meet people on modest incomes spend £500 per month on clothes.
Jesus christ this is an eye opener.
I consideredyself well off for being able to afford a mortgage as most I know can't.
Just goes to show how different things are from others viewpoints
Had a mate of my son round today he’s 7 or 8. Want a pack of crisps? Are they walkers” No “no thanks then”.
Lol I like him.
andybrad - And I know people who can afford to repay a mortgage but cannot afford the deposit required to get it.
But I don’t, personally, consider that having a successful career is something that others can or should just attribute to “luck”.
Luck can only take you so far, but I see plenty of people achieve success without much ability, who have been in the right place at the right time.
Is it luck if their face fits?
To add. Some people have some crazy outgoings. Have seen a few episodes of the BBC show “eat well for less” and I have been utterly gobsmacked by how much money some of these families are spending.
Family of 4. Nearly £300 a week / £14k a year.
I must admit to being confused here. I watch said series from time to time and am under the impression the amount of money afforded by the well of people was one weeks disposable income, not a month (i appreciate that makes it even more ludicrous). What would be the point of giving a poor family one months money to spend in a week as a comparison, because its not apples for apples.
On the subject of education, I have 5 grade C GSCE’s to my name, that’s it.
Define hard work - The hardest job I ever did was also one of the worst for pay. 12 hours a day, 5 days a week in a mill doing back breaking manual labour. My job now pays a lot more and has more responsibilities, but is a damned sight easier to do. Ironically I had much more disposable income when doing the poorly paid job.
For those of us lucky (I say luck, who knows) to be in a profession that pays an ok but not stella salariy age has so much to do with what you have in reserve. Teacher who has had a reasonable but not stratospheric career. At 29 I was buying my first house with my partner and every penny counted. Every penny. Luxuries were a bar of chocolate and bottle of wine in front of the telly on a Friday and we had to be careful about what invitation we accepted for nights out. We didn’t have more than a weeks worth of cash in reserve and certainly could not have afforded avocado toast and a fancy coffee or an iPhone if any of them had existed. Fast forward 18 years and the house (below national average but ok) is paid off and there’s a bit of savings in the bank. Partner is now wife and she’s had a few career wobbles in the last 5 years and they have been survivable financially. We have friends who earn more and have had a ‘easy’ life since their early 30s and other friends who are still scrabbling in their early 50s.
But, we have lived to our means. PPI has not been a thing for us simply because the only loan we have had in 25 years is the mortgage. Maybe we have had a dull life and should have lived it large a bit more. Maybe we are lucky to have simple tastes.
Next goal is to give up our current careers and do something new in our early 50s. To afford do something new and less financially secure/rewarding without too much stress until retirement.
Define hard work – The hardest job I ever did was also one of the worst for pay. 12 hours a day, 5 days a week in a mill doing back breaking manual labour.
When I was sixteen and undecided I worked for 18months brazing on the brackets to the end of the arms you hang clothes in in retails stores. Likewise it was hot, noisy, dirty work. However, you walked out on Friday with an envelope full of cash, has a quick beer with the factory lads in the local and no work worries until Monday.
My work ethic started right then when I was bet I couldn’t shift the factory record of 1000 properly brazed units in 1 day. I did 1012, didn’t get paid a bean more.
I was accepted into REME at 18, but did a course in ‘puters instead. And here I am.
I loved that brazing job.
Footflaps +1
this makes for illuminating reading. 21st century UK, your parents wealth is still a significant factor in your wealth
Unfortunately, I have no savings at all. Pretty much week to week for us. 4 kids to support and no job now. I am lucky to have £160 per week left after all the bills have been taken care of. Sounds a lot, but when you break it down it isn't really for 5 of us. This is for food, clothes, shoes, school stuff, xmas/birthdays, days out (if we manage to go anywhere) etc. Whenever we have managed to save before, it would soon get swallowed up somewhere.
I have worked constantly since I was 14, longest job was my last one which was just over 13 years. I left to take care of Lyanda back in March of this year. I know at some point I will have to go back to work, but it is daunting at the moment just thinking about our new 'normal' future.
Define hard work – The hardest job I ever did was also one of the worst for pay.
Some of the hardest physically and mentally have been min wage jobs but the stress was different. In those jobs I did not sign off on something that if it went wrong people could die and more so I can be accountable for other people’s work I have never seen/reviewed.
Doing the former made me better at the latter and better at saving money when I had it. Mostly because I don’t want to have to do those min wage jobs again...
Well, following on from the should I go to France thread , which has not happened yet, most people are aware of my financial position. Yes i can access a wedge ofcash if I have to. This is mostly due to life choices and living like a monk for many years. Not qualifications based as iIhave none . Nor a wife or kids or feel the need to fill the void that this does inevitably. leave by spending money
Great Thread. Particularly interesting reading the paper income vs reality comments.
Another variable for me would be proximity to work. There is virtually no public transport where I live.
We live here due to my wife's family circumstances. I have been unable to find work in my field locally and have to commute using my own car. The cost of that is equivalent to doubling our mortgage.
So, while on paper we have a decent income, the commuting cost rips into disposable income and limits the amount we can save.
To answer the OP's question, we don't have a big stash of savings but enough to get by on for a few months if anything happened one of our jobs.
But I don’t, personally, consider that having a successful career is something that others can or should just attribute to “luck”.
It is not 100% down to luck but luck plays a big part in it. I have been very lucky. I was clever but didn't try hard at school so left with some very poor A level grades. Found it hard to get a job as have aspergers so not great at interviews but luckily got a job in IT (largely based on results of an IQ test) where I fitted in (IT departments of full of socially inadequate people)
I would say I have never worked especially hard in the last 30 years, although have always taken it seriously and done my best, but just find myself in jobs that I seem to be able to do quite well using the intelligence and natural ability I was born with (objective, analytical, good with data) which again is down to luck.
If I had worked really hard with the luck I have had then I guess I would be earning even more and be in a higher position in the company but very happy where I am.
Some of the hardest physically and mentally have been min wage jobs but the stress was different. In those jobs I did not sign off on something that if it went wrong people could die and more so I can be accountable for other people’s work I have never seen/reviewed.
Which is why a years compulsory care work after school and before higher education should be compulsory. Minimum wage, people die if you get it wrong. Perspective innit?
Which is why a years compulsory care work after school and before higher education should be compulsory. Minimum wage, people die if you get it wrong. Perspective innit?
Nope, nope and nope. The last people you want working in care are people who do not want to work in care.
Me
Or rather, self employed / contractor, have a decent pot in my company that's there for those times on the bench, which can be lengthy. Got reasonable savings too, but looking at my pension pot and what it can't buy in terms of a decent annuity, I'm thinking I need to keep the savings all for retirement (or up the pension contributions but then the returns on it I feel are crap). If not keep for health care should myself or a relative need some expensive care. Mortgage is paid off but I really need to move to a bigger house and that's going to be a fair size mortgage given the price difference from my tiny little place. At my age the mortgage is going to push into retirement to pay it off. Unless I move to an area of the country where things are way cheaper, but then the contract job is pretty much at an end and I'd be getting much lower income.
So, yeah, there's money saved but I look at the bigger picture and long term worries, ending up not spending it just in case, rather than blow it all (on coke and hookers etc). I probably should just do the latter and I'll live longer rather than die worrying about it 😀
Still, there's plenty of money for bikes.
Quick question to posters, are you saving to buy a pension, should we be excluding pension pots from this discussion?
I think pensions should be excluded from the discussion.
If we take pensions into account i'm doing OK.... If we take savings, i'm doing badly... But a pension is only 'savings' when it becomes accessible.
Had some crippling debts following a divorce a few years ago. Credit cards, mortgage up to the hilt. Worked it all off in the last few years. Now have no debt at all other than a rapidly falling mortgage. Live in a modest semi which does me fine and earn an average wage. I'm just not extravagant. Kids have grown up and will be working soon which was a massive drain. I dont have savings per se, but do have a decent pension pot and the mortgage will be gone soon.
The very word Debt now makes me break out in cold sweats. Never again.
Savings??? Yes - enough to cover Christmas!
However, I do have a reasonable pension i.e. not huge but enough, and have recently paid off the mortgage so looking to change this. But the mortgage payments weren't huge, so the difference isn't as much as some people. The extra money has so far paid off credit cards and meant that this Summer's holidays, weekends away and festivals were all covered.
We both work, and yes could spend more evenings and weekends just sat in front the tele, but a daughter at Uni means that we have pretty much always lived month-to-month.
I'm not overly bothered about money, but I dream of having a bit left over at the end of each month.
I have paid off my mortgage, have several cars, could retire tomorrow but I love my job caring for ill children and driving old ladies to church visits, I have enough savings to cover me until the age of 150, my children all have iPhones and iPads and my dog has an iWatch so I can track her daily steps. And I wipe my arse on fivers.
But I am still saving for a short break during school holidays at Centre Parcs.
Nope, nope and nope. The last people you want working in care are people who do not want to work in care.
A good point.
There's always cleaning and cooking to be getting on with - yes, you do get people applying who'd be dangerous around vulnerable people.
To answer the question, 'Why save?'
For my wife and I, there's a few reasons:
We've both been made redundant during the past 20 years. And while the payouts have been good, it's always a worry.
We've got about 10 years before the pensions kick in. By saving over the last 20 years, my wife has been able to give up work, and I could if I wanted to. I haven't because I enjoy it.
Saving means we paid off the house years ago, so whatever happens, we'll have a roof.
The savings are helping our son at university.
Quick question to posters, are you saving to buy a pension, should we be excluding pension pots from this discussion?
Nope. Pension is completely separate. Because I can't access it until I retire, I don't think of my pension as 'savings'.
<span style="font-size: 0.8rem;">Savings for me are (currently) money that I can get to quickly if the boiler packs up.</span>
Saving means we paid off the house years ago, so whatever happens, we’ll have a roof.
Ah, but what if that roof develops a catastrophic leak that takes £'000's to repair....... which is kind of where we came in.
The savings are helping our son at university.
This is a good point as I think that we don't have any savings but we do - we have been saving for our girls' further/higher ed. since they were toddlers which is growing nicely into a pretty substantial pot. My only fall-back we have is the fact we have around £350k equity in our house (after allowing for sale costs) so if we ever needed to, we could buy a smaller place outright and at least be mortgage-free.
No in a word got enough equity in my house to pay more than the mortgage off on my rental and that's got 30odd k equity in it too.
No real debt as such 500 on a C.v card and that's it no car finance or shit like that.
What scares me is I've no inheritance and my mum's not got a lot too piss in.... and rents and us currently off with a osteoporosis fracture on the sick I've nowt to offer.
Pensions about 1500pa on today's rates but I've no kids n we ain't having any so it's flog the houses buy a van and tour round till the money has gone then I'm gonna go missing. Not ending up in a care home if they even exist in 35 years...
Though looking at bikes on the never never.....🤔
To put living costs with a young family into perspective in the south east.. I live in a london-commutable village.
3 bed semis are £500k. £450k mortgage is £2k a month
Season ticket to zone 1 is £500/month
Childcare for 2 kids is £2k a month
Council tax is £250 a month
Tv/phone/internet/gas/elec/water is £250 a month
And you're through £5k/month before you've gone for a single latte.
5lab
Serious question (as your figures make scary reading) do many people go from nothing (which I am assuming from your figures otherwise they would have equity) to buying a 3 bed semi if they only have two children? I was 41 and on my second house when our two girls were born - and that was a 2 bed terrace with a garden barely bigger than a children's climbing frame. We only managed to get somewhere bigger due to an inheritance otherwise we'd still be in it now.
As a slight alternative to the above, I'm 32 and I also live in a London commutable village in the South East.
- Our 3-bed terrace isn't selling at £350k, so it's not worth that! Mortgage is £750 a month on the £220k we've got outstanding
- I cycle to work and WFH a bit meaning I 'only' spend £2-300 a month on train tickets
- my 1 y/o goes to nursery 2 days a week because my wife works part time (we have the luxury of parental daycare on the other day), that's still £580 a month.
- Council tax is £170 a month
- TV/phone etc is about £250 yep
Still only £2k a month though! Plenty left over for lattes.
I've got a bit of savings, some for 'us' plus a pot for my son when he's older. Not a huge amount (c£15k), and we're looking to move house (see point 1) which will wipe 'our' bit out. I spend far too much money frankly, but I could realise a significant sum quite quickly through selling some assets (which are appreciating) if need be.
someone with a young family as in the post above, likely to be mid thirties max. If they are really lucky with jobs or rich parents, maybe they will have been on the housing ladder for five years. If they had, they will have likely been on a 30 year mortgage with 5 % deposit, and been 5 years into paying it.
5labs figures aren't unusual
we've skipped rungs on the property ladder to avoid the significant costs and disruption of moving every 5 years or so many of our friends seemed to do as they went from flat to terrace to semi to detached.
a friend currently has their 4 bed semi up for sale for £500k and apparently half the viewings have been first time buyers!
people are taking on massive mortgages.
we were very well set and basically mortgage free in our mid 30s due to relatively frugal living. then we had 2 kids and bought a doerupper forever home and we are skint. decent pension though if the stress doesn't kill me before I get thwre
someone with a young family as in the post above, likely to be mid thirties max. If they are really lucky with jobs or rich parents, maybe they will have been on the housing ladder for five years. If they had, they will have likely been on a 30 year mortgage with 5 % deposit, and been 5 years into paying it.
We bought with a 5% deposit on a 40 year mortgage aged 26! I'd do it again all day long though.
Quick question to posters, are you saving to buy a pension, should we be excluding pension pots from this discussion?
I pay into a pension as much as I can reasonably afford. No, I don't consider this as part of my savings, but I know it's there and I'm glad I have it.
This is a really insightful discussion - one thing that I see here is the comparison between "labour" jobs where you sweat for 40 hours per week, and clerical jobs where you sit at a desk all day and possibly get paid a lot more too. Some people would say that the clerical job is easier and, on most weeks, I'm sure they'd be right...
...but when it's 2am, you have a major system outage and you are the one (and perhaps the only one too) on the hook for getting it back up and running before people start working in the morning, the stress levels can be astronomical. Walking away isn't an option. Getting some sleep certainly isn't. There's noone to help you, except the internet and, if you're lucky, a disinterested supplier on the phone in California - you have to be able to focus and stay focused until the job is done. Those that have done it will recognise the stress and pressure that such situations bring and while it's not digging a hole in the rain, there hasn't been a single such occasion where I wouldn't have exchanged places with the man with the shovel in an instant.
We IT types earn our money when the chips are down 🙂
"do many people go from nothing (which I am assuming from your figures otherwise they would have equity) to buying a 3 bed "
Well we did as I absolutely refused to get saddled with a flat that either doesn't sell or is in *negative* equity.
To many of my friends became accidental landlords through inability to sell their flat without giving it away.
We rented a pokey little studio cottage out of town for a year and I worked in Africa for a majority of that year and put every penny asside to avoid buying a flat ....
Many other family members did similar did similar when They were young with the merchant navy and on the fishing etc. <span style="font-size: 0.8rem;"> </span>
<span style="font-size: 0.8rem;">They were conscious life choices though rather than luck. </span>
Long term we’re probably okay because - as a few in this thread - we run our own company and any profits we can spare go to pensions. I’m hoping to retire early 😉
Short term we’re okay-ish as we paid the house off, and the plan is to sell it once the kids have gone. We’ll move somewhere smaller (and hopefully next to a great trail and a pub!). We’re supporting one kid through Uni next year and going to try and help the other one get a (tiny) house locally.
We’ve a chunk of savings but not easy to get at. Which is good as I’d spend it. Luckily my wife is the fiscally responsible member of the family, and makes sure we’re (well I’m) not chucking cash we don’t have at shiny things.
I’ve always been rubbish at saving. But I like the idea of savings! We could do about 18 months if I didn’t get any more work, but I’d hate to see that money drain away.
