People will adjust their spending habits in order to afford their mortgage

N1AK

nicko33 wrote: »

mean weekly alcohol consumption is 21.35 units per adult
http://www.guardian.co.uk/news/datablog/2013/feb/27/how-much-alcohol-do-we-really-drink

so 92.5 per month
so 180 units of alcohol per household per month could be cut
How much does the average unit cost?

They're valid statistics; however they tell us nothing about how mortgage holding families living at the brink of their income normally behave. It could be that they consume more alcohol than average (to forget about the money problems perhaps) or that they barely drink in order to keep costs down.

nicko33

Smoking
about 12 a day for about 10 million adults
http://ash.org.uk/files/documents/ASH_106.pdf
so about 360 a month, or 18 packs of 20 at £7 each (I've no idea of the price of 20) is
£126 per month per smoker

which is 126 * 10/52 * 1.95 = £47 per household per month

OffGridLiving

Graham_Devon wrote: »

Interesting that on page 6, we still haven't really got any ideas on what could be cut, bar luxuries.

Were back to "people will just cope" and a general have a go at Graham for "worrying again" stance.

Those who say this "people will cut" are the very people who won't give the answers as to what they will cut. Instead we have to just assume they are all fine.

Were back to the exact same situaton of interest rates won't rise because it will cause too many issues, but when asked what these issues are, there aren't any as people will cope.

All I'm trying to do is explore the bullish stance on this and actually ask them to provide some detail to their responses. Hence I guess why it aggravates.

I haven't read the intervening 6 pages, just the OP and the back page. grizzly posted on another thread about this, and stated that people will just have to cut their cloth to suit their circumstances. I agreed, stating that people will go back to knowing the difference between 'need' and 'want'.

You only have to look on the SOA (statement of affairs) on the DFW and bankruptcy boards to see how many people can't differentiate between the essentials and the luxuries. I've lost count the number of times you see SkyTV and high end mobile phone contracts, modest houses with large utility bills (from not doing simple things like turning off lights, not having items on standby, etc.), two car families, kids with designer clothing, activities that cost a packet such as cinema, bowling, etc, the list goes on.

Our household has made an effort to try and reduce our consumption, partially to reduce our outgoings, but mainly because we want to tread lightly on the planet. During winter we wear pullovers and just heat the occupied parts of the building (not utility room, hallways, etc), our lights are LEDS and are turned off when we're not inthe room, we have those sockets that turn off all of the computer peripherals and DVD when the PC and TV are off, we don't have Sky TV at all and we only have the one car (bluemotion polo) which we don't use for short trips. We go for (horror) bike rides and walks and other activities that are free/cheap and healthy. As a result, our outgoings have gone way down.

Lighting and heating are necessities; lights in empty rooms, heating at 22C in hallways and bedrooms are luxuries.

Food and water are necessities; beer, fags, McDonalds, pizza hut are luxuries.

on so on.

wotsthat

michaels wrote: »

Graham

I bought in 2010

I am debating whether to swap my offset base +1.99% rate for 2.49% fixed for 5 years....but now I'm not sure if it is worth it as the BoE have announced rates will remain low for an extended period.

I can not understand what you are worrying about?

Fixed rates for people worried about rate rises. They've been mentioned a few times in this thread - it would be great if such a thing existed.

What we need is those fixed rate things and, what would be really helpful, is a website full of money saving ideas. I heard of one once but the name's escaped me.

BTW - I went through the same thought process with fixed rates. In the end I decided that record low 5 year fixes were low enough for me. They'll start to drift up well in advance of a BoE rise IMO.

Conrad

Graham, do you not find many people have side line incomes / other means?

I was darn the pub last night - typical S/E rural area and all the people at our 2 tables had such things.
A computer storage sales guy recently got options in his firm - should make him a few hundred grand - just an ordinary bloke. Previously he stretched himself to acquire the 'worthless' land attached to his garden and now he's managed to get permission on it and so has a nice investment.
Another does weekend medical standby services at weekend motor racing and makes a few extra thousand per month (his own little firm) as a SIDE LINE.

Another bought a container of sweets from China and is flogging them to those sweet shops springing up all over - again a side line.

Another sold their house (Mrs just went bankrupt to get rid of unsecured debt) to release £300k equity to buy a plot of land. They are building their new house on this plot and it will be worth £850k and have a £180k mortgage - so a quick leap in net worth.

A London bus driver who got a RTB on his Islington place - made hundreds of thou in profit.

Many people are dynamic and somehow make a fist of life. Life isn't always something to have thrust upon us.

We cope. We control outcomes.

Prosperity is absolutely everywhere.

wotsthat

I love these threads where Graham has people scurrying around suggesting savings just so he can dismiss them out of hand.

The person Graham's thinking of in the OP has a £150k variable rate mortgage, can't get a fix, can't get a pay rise, doesn't have tuppence left after paying for 'essentials', only eats egg & chips, doesn't drink, doesn't smoke, has a bad leg so has to use the car, uses his birdbath for a wash once a week and cries himself to sleep every night with the sheer desperation of it all.

It's Graham's world - we just live in it.

System

ermine wrote: »

Mebbe everyone you know needs to get a financial clue, then, possibly including yourself.

Doing your spending early in life using a loan makes all your consumer spending dearer. Say you buy a £3k car. Buy it on a loan and you are simply choosing to pay more for it by the interest on the loan. Then you go and do it again! A car is a consumable, buying consumables on loans is simply choosing to pay more for them. Would you go to a forecourt that says "20% Higher Prices Today"? If not, then why buy any except perhaps your very first car with a loan?

I bought my last car outright, only a 407 for slogging to work and back, 58000 miles 2.0 Diesel, leather 'n' !!!!, £3600 (haggled down from £4000). I hate having monthly payments.

grizzly1911

Conrad wrote: »

Another sold their house (Mrs just went bankrupt to get rid of unsecured debt) to release £300k equity to buy a plot of land. They are building their new house on this plot and it will be worth £850k and have a £180k mortgage - so a quick leap in net worth.

How come she was allowed to become bankrupt if she had an interest in substantial assets?

How come none of your acquaintances drive taxis and work in pubs as second jobs? They always seem to be like that guy on the Euro Millions Rollover advert.;)

OffGridLiving

grizzly1911 wrote: »

How come she was allowed to become bankrupt if she had an interest in substantial assets?

How come no of your acquaintances drive taxis and work in pubs as second jobs? they always seem to be like that guy on the Euro Millions Rollover advert?;)

No offense to conrad, but this made me LOL.

To be fair, I don't have any taxi drivers or pub workers in my circle of friends. It's not a conscious choice, I guess it's because I was lazy with my friendships when I was younger and so when I went to Uni and then got a job away from where I was born, I lost touch with school friends (who did have a wide range of jobs and I've tended to make friends with people I meet at work or met at Uni. Everyone is therefore in a profession. I'm not alone in this because most of my friend's, friends are also people they've met through work or uni.

I guess birds of a feather really do flock together.

Conrad

grizzly1911 wrote: »

How come she was allowed to become bankrupt if she had an interest in substantial assets?

How come no of your acquaintances drive taxis and work in pubs as second jobs? they always seem to be like that guy on the Euro Millions Rollover advert?;)

She was not on the last house / mortgage as far as I recall. This bankruptcy to riches thing annoys me. Another I know wracked up masses of debt in husbands name, used this to develop property then he went bankrupt and in the meantime all the assets were in her name. She's an ordinary university worker on about £30k yet lives in a million pound house with small mortgage all thanks to the spend, invest and go belly up routine. Grrr.



Well I live in a rural area, fairly typical of the home counties and people tend not to have taxi jobs etc on the side.

In the town where I work the sorts of side line job you cite are pretty commonplace.