Benji - I most definitely agree the cost of living has gone up!
but I also think the defnition of 'entertainment' or surplus in our personal budgets has changed and the amount allowed for the area is higher than what it used to be -- or what it 'should' be.
DP and I are 'lucky' to have what we have - a mortgage on a very modest renovators delight. He invested in land yonks ago and it had tripled in value when we sold it, and I got a life insurance pay out from my ex.
SOme call it 'luck' - DP calls his share a 'smart move'.
We struggle -- but admittedly live beyond our means ...we have a credit card and a mortgage.
We looked at renting and we would have been paying more or about the same in rent for nicer home.
Where you are born and teh support you have from family makes a difference too on how you treat money.
Last edited by FiveInTheBed; 02-04-2012 at 14:22.
Cost of living is a bigger problem than 99% of people realise. I travel all around the world for work and seriously, you guys have NO IDEA how badly Aussies are being ripped off.
DH and I have compared items from dish liquid and milk to BMWs and graphic design fees, and there is no rational explanation for the fact that almost EVERYTHING is significantly more expensive in Oz.
Only glaring exception is rent vs property prices. Rent is actually LOW here by comparison. The fact you struggle to get 7% yield on an investment property here is amazing to people overseas.
Anyways point of rant is Australians are being ripped off. I don't know who's earning the margin in the middle but would love to find out.
Definitely, but I also think depending on where you live, it's near impossible to do so. DP and I live in Sydney. We earn about $120k between us (before tax) and we rent but oh my goodness after paying rent, bills, groceries and insurance etc there's barely anything left to save! We'd love to buy our own place eventually, but having the savings to get together a deposit even for a run down 2 bed fibro in whoop whoop is such a daunting task. House prices here are ridiculous. At least 10x the average yearly salary, I believe.We don't go out much - our entertainment expenses might be buying a DVD box set and watching an episode of that of a night. We go out occasionally but usually for other people's things- birthdays, weddings, hens nights etc.I'm a good saver, so we're lucky. But I still am paying off a $3k Credit Card from my travelling days which I so regret getting! But once that's paid off, the only debt we'll have is my HECS debt which really couldn't have been avoided. Long story short - we don't live outside of our means - we have saved to purchase a 2007 car outright...but Sydney is SO UNLIVEABLE. Unfortunately, there's no chance of us moving for at least 2.5 years so we have to suck it up for now.
Last edited by rainbow road; 02-04-2012 at 14:15.
Yes, i think lots of people live above their means. I have heard people say it's normal to have credit card debt these days and not think twice about it (which makes me go ). I think some people just want to have all the 'stuff' and don't really care if they can't really afford it.
I have always lived by the rule 'if i don't have the cash for it outright, i don't buy it - only exception a house' and i've stuck with that philosophy, the only debt i've ever had is my mortgage and because i bought a cheap house the repayments are below our means.
Cost of living is getting higher and so many can't get ahead because of high rent prices and not being able to afford a house - or wanting their first house to be the 'dream house' with all the mod cons and not willing to start lower.
Yep DP and I used to be guilty of this, spending all we earned on whatever we wanted - living wth parents ofcourse.
It all changed when i got my car loan and decided i wanted it paid off within 12 months. Best thing i ever did!! 25000 and all paid in 11 months! Taught me I can live on minimal money and still buy the things I want, they just take a bit of time.
And when we found out we were expecting, first thing on the list was a house and we just moved in a week ago! We didnt want to be stuck in a rent trap, yes it mean DP has to work FIFO but we will be better off in the future for it i believe.
I still may be guilty of it as all I want atm is a thermomix... which isn't living within our means
I do love your renovators delights 5ITB!!
We earn about the same and are in Sydney. I know how you feel. I stayed at home for years desperately trying to save. My partner and I moved out together last year, only renting, and the savings are minimal. we still have old cars, phones, everything. I wish my HECS debt would just disapear.
If I lived within my means I'd probably still live at home with the folks and have 0 kids. Saving for a deposit these days is impossible, saving for anything is impossible. My parents saved and never had debts, but things didn't cost as much as they do now. Our electricity bill is over the top, groceries, petrol, all the basics cost too much. Rent has become equivalent to mortgage repayments, how can you save while renting to buy something so damn expensive even in a crap area? So by the time your done paying rent, food, bills, how are you suppose to save for that car, or whatever else you need? It'd take years and years, so the solution is to finance it and spend years and years paying it off, at least those years are spent with that thing, not hoping for it.
A basic house, car and 1 or 2 gadgets when you work hard isn't living beyond your means, but the way things are, we struggle just for that.
Im 27 this year and a lot of my friends the same age are like this.
My DH and I brought our first house together it was in a really crappy area, needed heaps of work and was such a tiny house! 2 bed 1 bath. Open kitchen/dining/living the toilet was in the bathroom no linen cupboard, only 2 cupboards in the kitchen the laundry was a tiny box. But this is what we could afford at the time and it got us into the market. We were there for 3 years and then sold moved to a better-ish area and have a much bigger house.
One of my friends and her DH built there first house in a nice area. The house is gorgeous but now after only living there for 2 years it's not good enough for her, she doesn't like the carpet anymore, doesn't like the backyard. It's only her and her DH no kids! I just don't understand! They would rather go so far into debt so they can have the best of everything than live comfortably with an already lovely house...
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