Do you live below your means?

Jonathan_Powell

Just curious...
I purchased my home 5 years ago. At the time, my wife and I were earning £30,000 each. Because of bonuses however, we were able to borrow an amount more akin to an £85,000 joint salary but decided against it and opted for a smaller home (which has its downsides in hindsight). When it came to remortgaging, we kept our high payments and took off 6 years off the term. I still drive my first car and we don't go abroad at all. We now jointly earn around £95,000 and everything is pretty much the same, mainly because all that salary increase has been sucked up by maternity leave and nursery fees.  In our position, we could be in a much bigger house, drive a fancier car and be on holiday abroad at least twice a year but that would mean more debt on the house. 

The main reason we live below our means is for some security in case something goes wrong (I am not in stable work and the last thing I want to worry about when not working is a car payment) as worst case scenario, the mortgage can be covered on one salary. I know others (and I am definitely not criticising)  who earn less than us but have a far bigger and better house, car etc. but it works for them as they have stable work and it will take something drastic for that to change. We pretty much live like we're on the same salary as 5 years ago and it's a very conscious decision. I wonder if it's the same for others?

strawb_shortcake

We live under our means, we chose to have one parent at home with the children. We are fortunate that our mortgage is low, and we don't subscribe to Sky/TV packages, expensive phones etc. We don't have a TV, microwave, dishwasher and our car is 15 years old. 
I earn about 20% over the average wage, but manage to keep a husband and 3 children and have money left in the bank each month. We do have a holiday of some description each year, not always abroad but when money allows we do. We also have quite substantial savings, which we tend to forget about. 

We have no debt besides the mortgage which even my bank found difficult to believe when we first enquired about a mortgage. 
I feel we waste a lot of money, and I am trying to cut this down. 

When my Husband goes back to work in 3 years time we'll be massively better off month to month, our mortgage is due to be paid off by the time I'm 50, 13 years time. We know only too well life can take unexpected turns but all being well we should be quite comfortable in later years. 

Gavin83

I’d say so. Me and my wife earn what most people would consider a great salary between us. We’re currently saving to buy a house which we’re looking to buy next year. We could realistically afford a £600k-£700k house but given there’s only the two of us and we’re not having kids it’s stupid to buy such a large property so we’ll be spending less and buying smaller. I wouldn’t consider us savers, we do like to spend (mainly on holidays) and would own a decent car. However we wouldn’t spend more than we could afford and if one of us lost our jobs we’d tighten our belts.

We’re discussing the possibility of going down to part time hours in a few years instead of earning more, although this is a luxury for a couple under 40. You can only own so much stuff but time is precious.

pickledonionspaceraider

Not surprising you live under your means .. seeing as you have just remortaged and not long after, walked out of a job.  

You might not be criticising others, but you are judging.

What are you hoping to get from this thread? @Jonathan_Powell

I always find these types of threads to smack of self-righteousness 

determined_new_ms

yes we do and due to health reasons over the last 5 years my income has decreased by £20k. I've just gone back to work after 6 months off sick and have reduced my hours so our income is going to go down again. However we do ok, pay everything, have everything we need, go on a couple of holidays a year and save, albeit a lot less now. I miss the days when if I wanted something I could just have it without a thought and now I do have to budget but I don't think our standard of life has suffered

MovingForwards

I live under my means and have done for nearly 3.5 years.

I've always owned older small cars, buy clothes as necessary, spend £25pw on food maximum, most of my furniture was previously owned when I purchased it, occasionally have take-away, rarely go out as it's too expensive; prefer house parties with good friends where we can actually hear each other speak.

I'm in the process of buying my own home and will be borrowing 2/3rds of what I could have. Didn't fancy being mortgaged to the hilt and know if ever I was made redundant or had to drop hours, change roles etc I could still afford my lifestyle.

Maybe I'm just a 40 something person, who realises there is a lot more to life, maybe I just want a quiet and easy life. Whatever it is, works well for me and may not be what others want.

societys_child

Do you live below your means?

Always. Never felt the need to keep up with the Jones's.

74jax

Yes we very much do.

My husband earns vastly more than me and we are very comfortable. 

We live in my house (ex council) when we could buy one much bigger and more expensive. We could have a very lavish lifestyle but are quite simple really.  I love it. 

elsien

pickledonionspaceraider said:

Not surprising you live under your means .. seeing as you have just remortaged and not long after, walked out of a job.  

You might not be criticising others, but you are judging.

What are you hoping to get from this thread? @Jonathan_Powell

I always find these types of threads to smack of self riotousness 

I'm finding the idea of self riotousness rather appealing, myself.

fred246

When I read the OP it reminded me of myself 30 years ago. I was on short term contracts so I saved in case I never got another job. I always got another job. It's always worth looking at "The Millionaire Next Door" which basically says that rich people are often not recognizable as rich because they save money. The people that are 'flashy' are often up to their necks in debt. Having said that property generally goes up in value so generally the more you spend on property the more you make. I only invested massively in property after I got a stable job. Cars are a massively depreciating asset. The more you spend on cars the more you lose. People with flashy cars are the biggest losers. Our biggest spending is on holidays because we have always enjoyed them. We have lots of holidays abroad. They need not be expensive. Flights are often very cheap and we usually use airbnb. However holidays with young children can be stressful and if you are happy without them that's great. Basically by paying off your mortgage you are increasing your net worth which is good.

Spendless

We bought a house cheaply because it needed a lot of work doing on it. . Shortly afterwards the house prices rose. We were relieved we'd bought when we did but it's a doube edged sword. We're still here oer 18 years on because the jump to the next step has been too expensive. The advantage we have is that having a cheap mortgage has bought other choices. We pay the rent for our son at Uni, because he receives the minimum maintainance loan. Some of our friends have had to tell their children they can only go to local Unis and commute because they aren't in a financial position to contribute due to higher living costs.
If I could go back I'd buy a bigger house in the first place. Yes, it would have been more expensive in the early days, but we'd have grown in to it and subsequent job promotions/opportunites/iriseswould have taken care of the increased costs.