Another take on 'affordability'.

Really2

Batchy wrote: »

So your going to magic a car out of fresh air? No depreciation?

I could answer what I do but then I would be told I was not the average so fairly pointless.

But if you use clevers point you would still have nearly £400 PA left over and I am running 2 cars not 1. So you could half that for 1 if you like and get £1700PA left over. Also they do have a contingency fund of £1800 PA.

tara747

lemonjelly wrote: »

Interesting debate.

I think the main reason why there is unaffordability has been made already in the thread - ie people don't save.

I'm not sure I'm aware of any couples who save almost £500 a month (unless they are due to go on holiday in a couple of months). The vast majority of people I know seem to spend the vast majority of what they earn just prior to payday. I do know some (paid weekly) who generally don't have enough to last them the week.

But that is down to their own avarice & budgeting - it isn't to say it is impossible, it just isn't done now.

We appeared to undergo a culture shift in the 80's, from prudence, to spending & lavishness. The late 90's onwards saw that move from spending, to overspending - the expansion of the availability of credit, equity release. At the start of the 80's, there were 2 credit cards. Now there are 2000, & we haven't included store cards, debit cards & the like.

The 90's became the "buy-it-now" generation, gotta have it, whatever the cost, NOW! Personally all the consumer borrowing which went on was nowhere near matched in wage increases, & was a major contributor to why the crunch happened, but that is for another thread. Point is, everyone got used to spending & borrowing & living for the now. Saving, planning & budgeting went out the window.

In theory it is possible. In practise, because of human nature (the way it currently is), it is unlikely.

An aside. I know someone who has, for 5 years, had 2 jobs (1 is only part time), though has also had a couple of employment gaps. Income has fluctuated, best paid job was £25k. He is over 30. Has savings of around £200k. Is waiting to buy the right place outright - no mortgage. I know him, he exists, & believe me he is very frugal in many respects. But he's not the norm.

Very good points. My friends are all in that boat except one - they spend everything they earn and then some!!!

As for your friend's savings - OMG is all I can say. :eek:

lemonjelly wrote: »

He doesn't broadcast it - which is why he has been able to save that amount & then hold on to it

I don't broadcast the amount I've saved to my friends, but neither do I plead poverty. I just keep schtum when money is discussed. The ones who have CC debt, no savings etc are happy for their financial situation to be common knowledge, but I don't feel the need to do the same. Not sure why I hold back on this, I have a funny feeling it's because they would be very taken aback as I am so far from the norm (within my circle I hasten to add).

Pete111

lemonjelly wrote: »

Interesting debate.

I think the main reason why there is unaffordability has been made already in the thread - ie people don't save.

I'm not sure I'm aware of any couples who save almost £500 a month (unless they are due to go on holiday in a couple of months). The vast majority of people I know seem to spend the vast majority of what they earn just prior to payday. I do know some (paid weekly) who generally don't have enough to last them the week.

But that is down to their own avarice & budgeting - it isn't to say it is impossible, it just isn't done now.

We appeared to undergo a culture shift in the 80's, from prudence, to spending & lavishness. The late 90's onwards saw that move from spending, to overspending - the expansion of the availability of credit, equity release. At the start of the 80's, there were 2 credit cards. Now there are 2000, & we haven't included store cards, debit cards & the like.

The 90's became the "buy-it-now" generation, gotta have it, whatever the cost, NOW! Personally all the consumer borrowing which went on was nowhere near matched in wage increases, & was a major contributor to why the crunch happened, but that is for another thread. Point is, everyone got used to spending & borrowing & living for the now. Saving, planning & budgeting went out the window.

In theory it is possible. In practise, because of human nature (the way it currently is), it is unlikely.

An aside. I know someone who has, for 5 years, had 2 jobs (1 is only part time), though has also had a couple of employment gaps. Income has fluctuated, best paid job was £25k. He is over 30. Has savings of around £200k. Is waiting to buy the right place outright - no mortgage. I know him, he exists, & believe me he is very frugal in many respects. But he's not the norm.

Looking at the numbers your mate has clearly made some incredibly astute financial investments as well as being uber frugal...

A 25k max main job plus a part time one so maybe 40k max? After tax that is going to be more like 30k which (even if he didn't eat and slept rough) over five years gives you... 150k

Are you sure he's not exaggerating just a little??

tara747

Pete111 wrote: »

[/B]


Looking at the numbers your mate has clearly made some incredibly astute financial investments as well as being uber frugal...

A 25k max main job plus a part time one so maybe 40k max? After tax that is going to be more like 30k which (even if he didn't eat and slept rough) over five years gives you... 150k

Are you sure he's not exaggerating just a little??

I did think the same, but maybe he's worked a LOT of overtime...

lemonjelly

Nope, I believe it to be true.

Bear in mind it will include money earned his whole life. I know he's always had a work ethic - paper round, saturday job etc. He's had isa's since they started (even had a tessa).

It isn't just based on earnings from the last 5 years.

In addition, he graduated over 10 years ago, & I'm fairly sure has always had the savings bug...;)

lostinrates

Its not that unfeasible. Just very rare today.

Pete111

lemonjelly wrote: »

Nope, I believe it to be true.

Bear in mind it will include money earned his whole life. I know he's always had a work ethic - paper round, saturday job etc. He's had isa's since they started (even had a tessa).

It isn't just based on earnings from the last 5 years.

In addition, he graduated over 10 years ago, & I'm fairly sure has always had the savings bug...;)

Ok that makes (a little) more sense

Fair play to him then, he's done extremely well to build that nest egg up from a relatively modest income.

Just make sure he always gets the 1st round in....!

tara747

Pete111 wrote: »

Ok that makes (a little) more sense

Fair play to him then, he's done extremely well to build that nest egg up from a relatively modest income.

Just make sure he always gets the 1st round in....!

And *that* is why I don't broadcast how much I have saved...

lemonjelly

Pete111 wrote: »

Just make sure he always gets the 1st round in....!

He frequently does....

One glass of tap water.....& 8 straws!:D

PasturesNew

I was looking at rents in the Bournemouth area this afternoon ... blimey.... I thought "If I just move there, then look for a job there because it all looks an OK area".... All I wanted was 1-bed with parking and a garden, cheapest was £525 .... so not even a 'good area', just cheapest. That's unaffordable to me ... so I won't be moving there without a job. Rent + bills would be about 110% of my current income.

High house prices, speculators .... mean high rents.