So....just how much money is 'enough' ?

debbycatz

Bogof_Babe wrote: »

When I started reading this thread, I was confused by the term "spare money" (at the end of the month). Surely if you have such thing as "spare money" then by definition you have enough to live on. Or did people mean before they had paid for food, clothes, Christmas, holidays etc?

Hi Bogof_Babe. When I started the thread I was thinking of 'spare' money being along the lines of after you have paid for essentials, such as food, clothes, christmas etc. I guess I was thinking that even tho' I do set certain amounts aside for things like clothes, entertainment etc, it never seems quite enough and I wondered what other people had 'spare' and if that felt like enough to them.
I realise that we can't compare against incomes so someone suggested coming up with a figure that they would like to have left over at the end of paying everything into their pots that they would feel was 'enough'.
I know that in theory, if your paying into your various pots then you don't need 'spare' money 'cos you have got everything covered but I feel it would be nice to have enough to go and do that unexpected thing or pick the phone up and arrange a night out that isn't in your budget.
Hope this helps - I'm just thinking aloud really

Bambywamby

Our mortgage costs cover 1/3 of our wages.

Our mortgage is £1000 per month :eek: but as recent first time buyers and house prices been so stonking it's the price we have to pay to have a home of our own.

So on a percentage its about 33%.

ZTD

debbycatz wrote: »

Not sure how to word my next question as I am rather dumb with maths but I'm wondering what the 'average' proportion of one's monthly pay goes on the mortgage/rent payment in comparison to say 20 or 30 years ago ?
For example, did we used to pay 30% of our monthly pay towards rent/mortgage and now we are paying more like 50% of our monthly income
Can anyone help - ZTD perhaps ?
Sorry if I've not made myself clear. I just find it difficult to compare in figures as I know that wages have risen and inflation and stuff like that.

If you go here, and skip forward to page 182, it alludes to it increasing to 22%, but fails to provide a link to the background historical tables. You could probably find it if you look hard enough - but to be frank https://www.statistics.gov.uk is a mess and has been for years.

Prudent

For a period of time I went through very difficult life circumstances and it totally changed my perception of 'how much is enough.' Part of those circumstances involved a huge drop in income and a lot of anxiety about the simple things like having somewhere to live. My daughter (who was 10 at the start of this time) was very traumatised and I wanted to find her somewhere stable to live. I lived below benefit levels to pay off a mortgage so that I knew that we would be able to stay in our home. I changed my shopping to charity shops, car boots and using lots of coupons.Then I found mse and 'treats' came back into our life.

I paid off the mortgage, got a secure job and eventually child support. Our 'spare' income has improved considerably. But during that time I began to be content with simplicity and small treats. It carried less responsiblity for managing outgoings and looking after or doing things. There was a freedom in our new lifestyle.

I also spent a lot more time with my friends and in time they, not the things, were what mattered. I began to feel happier with myself because I felt by using a lot of second hand goods I was living more ethically.

I spend very little now above my essential outgoings and do not feel deprived. 'Treats' come from tips on here or competition wins. And yet I recognise I get more pleasure out of being part of the community on the mse comping boards than the wins themselves.


For me -having less has given me immeasurably more.

Spendi

Bogof_Babe wrote: »

Spendi, you should be able to get a 25 year mortgage until you reach age 40, as your retirement age is now 65 since recent changes.

Also, you say a house in your road is £110K, so does that mean you might be able to get a flat in the area for quite a lot less?

I'm assuming you live alone, as you seem to be the only wage earner, so do you really need a 3-bed place? Also, if you do meet someone in the future then there would be two wages which would bring your mortgage ratio down considerably.

Ty for the mortgage tip that does make me feel happier
I need a two bed as i have a DD as well, but flats round here are nearly as much as its all ex-council housing, im going on 2 bed ex council semi - theres a 2 bed bungalow down the road going for a snip at £415k - and no im not in London !!

A bed flat is £107 round the corner ! Im better off sticking to the council estate !!

Softstuff

msmicawber wrote: »

Yes, I'm with you SoozieSoo. However, I do think that when people could manage on one wage most people rented their homes, didn't own cars, didn't have TVs or even telephones half the time, lived the Old Style life, and if they had holidays, they were very modest.

I 'manage' on £17,500 for 3 of us, but we're so used to having no frills because I was paying off debts for years and paying childcare that I can make my disposable income go a very long way, like most people on this site.

I think it is a very different world now. I can remember when having a fridge was considered a 'luxury' item whereas now I don't know anyone who doesn't have one, and the only people in Britain who don't have washing machines, as far as I know, are the residents of Albert Square!

I agree with all of that. My grandparents lived in a 1 bedroomed rented flat... and that was with my mum living there with them. They had no TV until my mum was about 25, they did have a phone but it was considered a luxury to use it, they had no car but they did have a twin tub. As for only one person working though, as far as I recall nan always had a part time job for a bit of extra cash for luxuries.... that's how they went on holiday to prestatyn!

competitionscafe

I think you just spend what you earn or a bit above wether you are on a low wage (when you have no choice but to spend what you earn) or on a better wage (you just buy nicer food, rent a nicer place, etc).

10 years ago I was on £4 an hour as a catering assistant (about 8k/year?) and although I had to watch the pennies and had no luxuries I could still go out pretty much whenever I wanted to and even managed to save a small amount each month. Ten years on and earning more than twice as much - still renting (should have bought about 7 years ago when income went up enough to maybe get a mortage for a 1 bed flat - no chance of that now). But apart from that even on more than twice the wage the only real difference is I can afford to rent a nicer place and spend on food without worrying too much about what it costs.

There does seem to be a British obsession with getting your own house though - in many other European countries they enjoy as good (or higher) standard of living with much lower percentage of people owning property. I know someone in Italy whose brother has just moved out of the family home at age 30! (when he got married) and I know Spanish people who either live with parents or rent... I don't think many people here would be willing to live with their parents for most of their twenties though unless they really had to!

omg_3

We earn £52,000 pa. Mortgage is £280 pcm with 3 years left. Both late 40's with 3 kids. We would have plenty to live on BUT are paying off debt. I recon we could earily live on £38,000 without debt. OR £28,000 without debt and kids

mystery07

What an interesting post! Reading through what everybody see's as enough spare cash is enlightening.

My income has taken a real bashing over the last few years, since my son was born. Im single parent, to 1 toddler & will have about £24K coming in this year, but after childcare & bills, I dont have anything left! For me, I dont know what would be ideal, maybe another 6K & Id be happy, as this would give £500 a month spare!

A few years ago, when I was with my sons Dad, & I was modelling, we had a huge income & a lifestyle to match! So, Id agree, that the more money you have, the more you spend! Back then, I lived for designer clothes! Now I just wouldnt dream of buying really expensive stuff for myself!

So I definately think, having less money, teaches you the value of it! And probably not want so much cash for luxuries!

Well done OP, for managing on 13K, I really wish, I could find a way to do that! We'd have loads of free cash!

Xxx

Mindy_2

We are also high earners with a joint income of £64K. Most people then wonder why we have such horrendous debt, a few years ago we earned more than that - in fact it was just DH and not me as I didn't work because I didn't feel I had to!

We spent and spent and spent, and when I look around I would be hard pushed to put my hands on anything much more than £10K of goods. Our income dropped and hey presto we got into debt because our spending didn't drop in line with our income.

But looking back at when I was a kid (I'm 47 now), my parents didn't have foreign holidays, they owned a couple of holiday cottages in Brighton - students in the winter and holiday makers in the summer, so we stayed for a couple of weeks a year while they did house maintenance. My dad could turn his hand to anything - car maintenance, decorating, plumbing, electricals, building work, my mum could decorate for England - I remember her papering the stairwell in one of the cottages and this was over a double flight of stairs!

They had good incomes, my dad was a structural engineer and my mum a teacher, but they were very careful with money and as a result they have a good retirement with lots of little holidays and trips each year, from a month in India to weekends away with friends.

Really, I am now learning the skills that my parents practiced all their lives, its just a shame I didn't get to grips with it from the word go.

Spare income - no thank you, we need to learn to cope with the problems we have created, and in 5 years time when we get out of debt we will have all the spare income we need.