Living within one's means

[Janesmum123]

Yes I do believe many people live above their means.

However life is much more expensive now. Even just living modestly.
The house prices vs income is at about 7 times now where as our parents generation it was about 3 times. Same goes with everything from petrol to food etc.
Im talking compared to wages. Obviously people earn more now.

It is becoming increasingly difficult to live within your means.

I personally think life was much easier 20 years ago. Where people could actually buy a house and still afford to live to some degree.

[Benji]

Yes I do believe many people live above their means.

However life is much more expensive now. Even just living modestly.
The house prices vs income is at about 7 times now where as our parents generation it was about 3 times. Same goes with everything from petrol to food etc.
Im talking compared to wages. Obviously people earn more now.

It is becoming increasingly difficult to live within your means.

I personally think life was much easier 20 years ago. Where people could actually buy a house and still afford to live to some degree.

I agree with this. A lot of peole have given up on the idea of home ownership because the prices are just through the roof. For me to buy a run down, dingy old house further away from my work, it would cost me almost my entire wage.

I mentioned that here a while ago and someone mentioned that it's only because people want the 4 br homes with 2 bathrooms etc but I'd have to disagree as land sizes are actually a lot smaller, I couldn't dream of buying a block as large as my parents nowadays.

[FiveInTheBed]

loads of factors!

Easy credit mixed with dishonesty -- people going for loans or credit cards and not being 100% honest about their current commitments. EG - when asked if you have any credit cards, most people think visa & mastercards, but 'forget' or don't think about the importance of store cards that allow you to have an account.
Therefore people rate higher when teh average cost of living is factored against their income and financial commitements.
I think the info on credit checks need an overhaul.

People not understanding how 'interest free' purchases work and getting stung by massive amount of interest.

Advertising/keeping up wth the Joneses... rapid development of technology.

Material possession being about status not neccessity.

[Janesmum123]

Yep Benji many people just want an average fibro 3 bedda which is now well out of a lot of peoples reach. I have friends who's repayments on a home a very basic home is 600-700 a week. They struggle to live. When you are paying 400k for a run down 3 bedda something is not right. And I'm not talking about a crash hot area either. I mean out in the surburbs. And that 400k is cheap, if you can find it.

Its not as simple as moving away, there is work to think about, education, support networks etc.
I moved away and believe me if it was that simple everyone would be doing it.

[2pink 1on way]

I think the problem is it way to easy to get money I have friends who think borrowing 40 k for a car is nothing and will up grade at 5 years cause the loan has finished but then complain that they have to work full time spending no time with the kids they have to go on a holiday once a year (no a cheap one) have flash clothes, tvs ect but no savings for a rainy day mummy and daddy usaaly help themnout when unexpected bills come cause they spend every cent.

I remember when we got our mortgage they asked how many credit cards we have and we're in shock when we said none asked how many cars we own we said 2 so they wanted to know how much owing we said none never got a loan the guy was in schock and then said we could borrow a huge amount we said no we only want x amount

[FiveInTheBed]

Yes I do believe many people live above their means.

However life is much more expensive now. Even just living modestly.
The house prices vs income is at about 7 times now where as our parents generation it was about 3 times. Same goes with everything from petrol to food etc.
Im talking compared to wages. Obviously people earn more now.

It is becoming increasingly difficult to live within your means.

I personally think life was much easier 20 years ago. Where people could actually buy a house and still afford to live to some degree.

we have this chat with teh inlaws everynow and then...and MIL always reminds me how when she was pregnant with her first, they lived in someone's garage (planning to build)..her husband earnt $50 a week and $25 of that went on rent...the rest they had to live on.

They struggled and worked hard and now own and run their own business, have a largeg house on 2 acres plus an investment property..but they still don't have a huge income, (what tehy take from teh business) I think they allow $25K a year for each of them and teh business pays for teh business and teh investment property pays for teh investment property IYKWIM.

I think these days the younger generation [*ahem* yes a generalisation) WANT that flash 5 bedroom house with all the mod cons straight up!! ...and if they can get a loan by themselves (or with a guaruntor) then they will go for it..rather than getting something smaller and working to pay that off then upgrading.

[AndrewTheEmu]

Yes defiantly.

My DH and I struggle with this.

He grew up in a very wealthy household & wants to keep living like that. He does count his pennies and is good at budgeting but he can be reckless with the money he saves.

Most recent fixation is a FOUR THOUSAND 2 week holiday up north (not including flights food and spending money) when we need to do major work on the house foundations.

I struggle because I grew up in a very poor family and now that I have money, I spoil our family rotten

[Benji]

we have this chat with teh inlaws everynow and then...and MIL always reminds me how when she was pregnant with her first, they lived in someone's garage (planning to build)..her husband earnt $50 a week and $25 of that went on rent...the rest they had to live on.

They struggled and worked hard and now own and run their own business, have a largeg house on 2 acres plus an investment property..but they still don't have a huge income, (what tehy take from teh business) I think they allow $25K a year for each of them and teh business pays for teh business and teh investment property pays for teh investment property IYKWIM.

I think these days the younger generation [*ahem* yes a generalisation) WANT that flash 5 bedroom house with all the mod cons straight up!! ...and if they can get a loan by themselves (or with a guaruntor) then they will go for it..rather than getting something smaller and working to pay that off then upgrading.

I think a lot of the problem today is that most of us have to rent and rents are so high that it's difficult to save. I pay the equivalent in rent to a lot of mortgages and it's a very basic house that is actually too small for us. A lot of people simply couldn't save while paying rent. I don't have the luxury of living with anyone else rent-free, my brother does and he and his partner save like mad like you wouldn't believe. DP and I knuckle down, but are also bogged down by rent. We'd have more than double saved by now compared to what we do if it weren't for rent.

I'd say it's a bit of both. I do know people who refuse to live anywhere but the mcmansion, but then again there are a lot of people who would just love the opportunity to have a mortgage for a basic home but it's more than their wage. Around my area, which isn't all that flash, it's $400k+ for a run down place which is a "renovators delight".

[LivinOnAPrayer]

Its deffinatly an instant gratification and disposable world.

I live on a carers pension and really struggle (single parent and 1 child). We have enough food, bills are all paid and im in no debt at all, but our life is not flash.
(Thankfully i have a gorgeous boyfriend who likes to spoil us with trips away )

Im studying, but in 12-18 months i'll be on a decent wage and plan to open a term deposit account to save for a decent car and a small, basic house. It's all i've ever wanted.

[Janesmum123]

Proof is in the data. It's a fact that we have it harder much harder and that getting ahead is like mission impossible for the average person.

Much of my family who worked in factories with no English now own a few houses a few cars and travel overseas every year.
Factory workers can't do that now. It because wage vs housing is way way higher.
That is a fact.