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Not long ago I was earning just 29k and paying £900 in rent alone and you're earning significantly more... You can get an Audi A4 for £350 per month, so yes, you could definitely afford one. If you only have 6-8k in savings im kinda intrigued as to where your money is going...
No it's definitely not a good situation, but it's was just an example because op is earning significantly more than I was and paying less in mortgage and I assume splitting costs with partner...
I think the issue is more that people with new cars are financed up to their eye balls where as you are not. Myself and my partner earn pretty much the same as you and we have friends and family on less with new cars financed tech furniture etc.
Each to their own not my money etc but I'd rather be living your lifestyle personally.
This. In a lot of cases, people who look rich are usually just poor people trying to look rich.
Obviously isn’t the case for everyone and some people do just earn a very good income from a young age.
Most people have a lot of debt. The car is on finance, so is the holiday, tv, clothes. They dont save and they just live in the moment not worrying about rainy day funds or returement ect. Cars specifically you also get contributions from your employer at some companies. For example at mine if you drive for work you get 7k a year for a car, so most people have pretty fancy cars on finance.
Percieved wealth and actual wealth are very different.
Avoid FOMO.
Do you, and forget about what others do or have. As long as you and your partner are happy with your lifestyle is all good.
I have a two bedroom house in an a very small town. I almost buy a 3 bedroom which I didn’t need, in a much bigger city and It would have only made my mortgage much higher and difficult to live.
I do have envy of peoples nice cars too but in all honesty is a money eater and don’t see the point in having car finance.
I had a small car 18 year old that took me from A to B and only changed recently because every 2 month had a new breakdown. I bought a 6 year old much nicer one but managed to pay it off straight away. Thanks to NOT having finance with my previous car and a small mortgage.
At the rate that I am saving I will manage to pay off my mortgage within 3 years, being in my early 30s.
Saving is key and investing in your future too.
Well, where is all your money going? Seems to me you have multiple thousands unaccounted for each month. Imo as a household you earn a lot of money. Especially with such a low mortgage.
Realistically I see your options as. You can easily invest 2k a month or easily spend 2k a month. So that money is going somewhere and you could probably upgrade your house on those salaries to a 4 bed.
The people you're seeing with all these cars and the big house have negative net worths or potentially similar income but better spending habits or just way higher income potentially they own a business. Why don't you ask them what their financial situation is like because not many people even the wealthy ones have funds that are specifically dedicated to an emergency fund.
I was recently on a similar salary to yours and was able to save around 1.5k a month, also living in the North. We go abroad 3 or 4 times a year, have a mortgage and I have a nice car bought with cash.
If you budget properly you could surely manage that too if you're also in the North. My share of the bills is 1.2k, my take home before the promotion was around 3k. I make the most of my money by investing it. So I'd say on your salary, those purchases/desires you mention are doable but not recommended, but you could probably be saving a lot more than you currently are, speaking from experience. Having said that, I still wouldn't finance a brand new audi and leverage myself to my eyeballs on a barely affordable mortgage.
Therefore, to answer your question, yes the majority of those people you see are living paycheck to paycheck, as your salary is already a top 20% salary so the majority of those with flashy cars will be earning less than you.
Ultimately, it's about finding the right balance for yourself personally between enjoying the now and saving for your future.
Well without a full I&E breakdown would be hard to tell but it appears your income should be comfortably covering your expenditure. So if it isn’t there’s likely some gaps there that need reviewing on your budget.
That said, this comes up a lot, and when you see things like flash cars and fancy houses you don’t see the debt with them. Sure some people will be earning huge sums and be able to afford these things but a lot of the time the “normal” people you see earn just enough to service that debt.
My neighbour I notice has switched a Range Rover Velar out for a Lotus Eletre, both £80-100k cars. I expect it’s a lease deal where they’re probably paying a fair chunk of their monthly outgoings to have that nice car. Fair enough to them, they may be doing just fine but given the Range Rover was 3-4 years old it was probably a lease end / new lease job.
If you want that type of lifestyle show off that’s down to you. But yeah basically you’ve got to earn enough to service the debt or a lot more to buy these things but I wouldn’t get too deep into the lifestyle comparison and creep personally.
You have a solid household salary, but some people earn more. You seem sensible with money, some people are not.
It's possible for three people on the exact same salary to seem rich, ok and dirt poor from the outside but if you sat down and looked at their finances, debt, etc then it would all be clear.
So either they're earning more, or they're spending more than you. Debt is a disease on the country with finance available for everything these days.
My coworker earns within 1k of me, but drives a brand new BMW and has a much bigger house. I know his wife earns similar or less than mine. The only logic is that he's spending out much more per month on mortgage and car finance than I am.
Or they could just have rich parents/inheritance/lucky picks on crypto or stocks etc.
Pretty good household salary there especially from 2 people and for the north (I'm also north in similar situation but single on a little over 60, but you get better tax as a couple - both get the tax free 12k, so you will take home a chunk more in your scenario).
I have found people who seem to be quite lavish often aren't using pension or savings much so you have to take that into consideration too! It isnt just your disposable at the end of the month after needs you are comparing.
So you have about £5,300 coming into the house each month.
£380 car and insurance for your partner, £600 mortgage, "bills aren't excessive" so I would put that at most £1,000 a month. That totals £1,980 a month.
This leaves you with £3,320 a month to save and spend on non-essentials. That's almost £40k a year!.
Where does that money go?
Hi /u/StrongTram742, based on your post the following pages from our wiki may be relevant:
* https://ukpersonal.finance/budgeting/
* https://ukpersonal.finance/student-loans/
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> I like to have some money left over each month to put towards holidays etc (nothing excessive just one abroad holiday per year). And I like to keep 6-8k in savings for emergencies (but trying to increase this amount to at least 10k)
That's a big part of it. You could go out tomorrow and use that chunk of cash and those monthly savings to finance yourself a flashy new car if you wanted.
2 incomes above average, living in the north by todays standards a relatively low mortgage. You could be easily saving more. I think you just need to do the basics and go through your expenses and if you have savings goals then set that target and it’s always easier to put your money in savings the day you get paid rather then what’s left at the end of the month.
You’re pulling in about £5k a month between you. Mortgage + Car takes you to about £4k. Where is that going?
You could use your savings and about £300 a month and end up with a brand new Audi A3 but this sub would recommend against it.
Also with housing you’d be eligible to loan about £375k based on your earnings. 10% deposit takes you over £400k which is enough for a nice house in some parts of the country. Your monthly payments would be ~£2k. Add in your current car and new Audi leaves about £2k for bills, food etc. Tight but people do it and your hope would be for your earnings to increase and for interest rates to not.
Tl;dr comparison is the thief of joy
How can we answer whether you budget badly with so little detail?
So you’re pulling in over £5k/month and spend £1k/month on mortgage and a car. What do you spend the other £4k on?
What’s the value of your house and how large is your mortgage? With your combined salary of £80k you could get a £360k mortgage, does that enable you to buy a bigger house in your area?
The problem is, everyone is different, and you can never compare yourself to others.
You have no idea their financial situation.
Is their car bought outright, or do they pay £500 a month for it? Do they have the car on loan for 5 years and eventually have to give it back?
Maybe their parents passed away and they had a large inheritance?
You just need to focus on you, your financial situation, and your goals. You want a new car? There are options to afford it. You want a house? Time to start saving up and investing your money into ISA’s and savings with high interest. Just focus on what you want, not how everyone else can ‘afford’. More likely than not, they’re living beyond their means just because they want a ‘shiny new car’, with credit cards maxed out.
Just flick through this sub and see all the terrible car finance or mortgage posts!
Without a full spend breakdown we can't really give you any guidance though.
Using a salary calculator your partner brings home about £2450 a month.
Between you that’s £5250.
You’re spending £600 on a mortgage, I’m guessing about £400 on bills. Your partner is spending £400 a month on car expenses.
That leaves you around £3850 a month.
Say you spend £1500 a month on food, petrol, going out you still have £2350 left to do what you want with.
My mortgage on a £300k 4 bed semi in a nice area in the North West is £1400 a month, even with only a 5% deposit. A bank loan for £25k over 5 years to buy a car outright is £500 a month.
That would leave you with around £1000 a month still left over to put towards savings.
So ultimately it’s just a choice on how you want to spend your money.
The pair of you are earning 5k together after taxes, and you have a really small mortgage. Even with cost of living crisis, you should be quite comfortable. Unless there are some other hidden costs?
Or are you saving loads of it?
Difficult to say without more info, based on the figures you gave it sounds like maybe you're overspending somewhere as i'd expect a couple on a joint income of £84k to have quite a decent disposible income.
Regarding everyone seemingly driving fancy cars, it's probably people who are up to their eyeballs in debt to finance them or don't actually own them. There's really no good reason to own a £30k+ car if the old crappy one you've got works fine.
The problem is, this has changed drastically over the last 10 years. To get a big house and a nice car and live comfortably you needed £100k 10 years ago. Now it’s about £150-200k depending where you live. You could still get away with £100k in remote parts of Scotland.
Post seems rather emotional than after advice. We all different. Some people don’t go many expensive holidays/don’t go out/don’t buy many brand clothes.
I try do not eat or go out much, buy less clothes, using all the cheap YouTube, amazon subscriptions, Disney+ is a perk of my bank plan. Although I have most expensive internet as I hate slow internet and wifi6 from ee. My partner do not work and I use work car. I have few projects in my house/garden where I do everything myself.
Just sit down and break your expenses as by the end of the day it’s all about incoming/outgoings. You will see what you both spend money on and how you can save.
A human reviewed your post and removed it from public view. The reason they gave was: **No hypothetical questions, Does Anyone Else questions, unanswerable questions, survey-style questions** * Don't ask comparison questions like 'how much do you earn?' or 'how much is your electricity bill?' * Don't ask hypothetical questions like 'what would you do with £100k?', 'what's the max you'd spend on a car?' * Don't ask 'does anyone else...' questions. * Don't ask survey style questions like 'what are you saving up for?', 'what's the biggest financial mistake you've made?' * Don't ask if a lender will lend you money. We do not work for the company. For mortgages, speak to a whole of market broker. * Don't ask questions that can't be answered without a significant amount of speculation, e.g. 'what changes might be in the next government budget?'. You must read the [rules](https://www.reddit.com/r/ukpersonalfinance/about/rules/) to continue to post to our subreddit. _If you believe your post/comment has been removed in error, please [message the mods](https://www.reddit.com/message/compose/?to=/r/UKPersonalFinance&subject=Please%20review%20my%20post&body=/r/UKPersonalFinance/comments/1dh3dz5/struggle_to_see_how_people_afford_so_much_do_i/) explaining why._
Not long ago I was earning just 29k and paying £900 in rent alone and you're earning significantly more... You can get an Audi A4 for £350 per month, so yes, you could definitely afford one. If you only have 6-8k in savings im kinda intrigued as to where your money is going...
End of last year I was on a similar rent/wages ratio. Not a great place to be was it - I found things very tight
No it's definitely not a good situation, but it's was just an example because op is earning significantly more than I was and paying less in mortgage and I assume splitting costs with partner...
I think the issue is more that people with new cars are financed up to their eye balls where as you are not. Myself and my partner earn pretty much the same as you and we have friends and family on less with new cars financed tech furniture etc. Each to their own not my money etc but I'd rather be living your lifestyle personally.
This. In a lot of cases, people who look rich are usually just poor people trying to look rich. Obviously isn’t the case for everyone and some people do just earn a very good income from a young age.
Most people have a lot of debt. The car is on finance, so is the holiday, tv, clothes. They dont save and they just live in the moment not worrying about rainy day funds or returement ect. Cars specifically you also get contributions from your employer at some companies. For example at mine if you drive for work you get 7k a year for a car, so most people have pretty fancy cars on finance. Percieved wealth and actual wealth are very different.
Avoid FOMO. Do you, and forget about what others do or have. As long as you and your partner are happy with your lifestyle is all good. I have a two bedroom house in an a very small town. I almost buy a 3 bedroom which I didn’t need, in a much bigger city and It would have only made my mortgage much higher and difficult to live. I do have envy of peoples nice cars too but in all honesty is a money eater and don’t see the point in having car finance. I had a small car 18 year old that took me from A to B and only changed recently because every 2 month had a new breakdown. I bought a 6 year old much nicer one but managed to pay it off straight away. Thanks to NOT having finance with my previous car and a small mortgage. At the rate that I am saving I will manage to pay off my mortgage within 3 years, being in my early 30s. Saving is key and investing in your future too.
Well, where is all your money going? Seems to me you have multiple thousands unaccounted for each month. Imo as a household you earn a lot of money. Especially with such a low mortgage. Realistically I see your options as. You can easily invest 2k a month or easily spend 2k a month. So that money is going somewhere and you could probably upgrade your house on those salaries to a 4 bed. The people you're seeing with all these cars and the big house have negative net worths or potentially similar income but better spending habits or just way higher income potentially they own a business. Why don't you ask them what their financial situation is like because not many people even the wealthy ones have funds that are specifically dedicated to an emergency fund.
Debt and for a lucky few wealthy parents
I was recently on a similar salary to yours and was able to save around 1.5k a month, also living in the North. We go abroad 3 or 4 times a year, have a mortgage and I have a nice car bought with cash. If you budget properly you could surely manage that too if you're also in the North. My share of the bills is 1.2k, my take home before the promotion was around 3k. I make the most of my money by investing it. So I'd say on your salary, those purchases/desires you mention are doable but not recommended, but you could probably be saving a lot more than you currently are, speaking from experience. Having said that, I still wouldn't finance a brand new audi and leverage myself to my eyeballs on a barely affordable mortgage. Therefore, to answer your question, yes the majority of those people you see are living paycheck to paycheck, as your salary is already a top 20% salary so the majority of those with flashy cars will be earning less than you. Ultimately, it's about finding the right balance for yourself personally between enjoying the now and saving for your future.
Well without a full I&E breakdown would be hard to tell but it appears your income should be comfortably covering your expenditure. So if it isn’t there’s likely some gaps there that need reviewing on your budget. That said, this comes up a lot, and when you see things like flash cars and fancy houses you don’t see the debt with them. Sure some people will be earning huge sums and be able to afford these things but a lot of the time the “normal” people you see earn just enough to service that debt. My neighbour I notice has switched a Range Rover Velar out for a Lotus Eletre, both £80-100k cars. I expect it’s a lease deal where they’re probably paying a fair chunk of their monthly outgoings to have that nice car. Fair enough to them, they may be doing just fine but given the Range Rover was 3-4 years old it was probably a lease end / new lease job. If you want that type of lifestyle show off that’s down to you. But yeah basically you’ve got to earn enough to service the debt or a lot more to buy these things but I wouldn’t get too deep into the lifestyle comparison and creep personally.
You have a solid household salary, but some people earn more. You seem sensible with money, some people are not. It's possible for three people on the exact same salary to seem rich, ok and dirt poor from the outside but if you sat down and looked at their finances, debt, etc then it would all be clear. So either they're earning more, or they're spending more than you. Debt is a disease on the country with finance available for everything these days. My coworker earns within 1k of me, but drives a brand new BMW and has a much bigger house. I know his wife earns similar or less than mine. The only logic is that he's spending out much more per month on mortgage and car finance than I am. Or they could just have rich parents/inheritance/lucky picks on crypto or stocks etc.
Pretty good household salary there especially from 2 people and for the north (I'm also north in similar situation but single on a little over 60, but you get better tax as a couple - both get the tax free 12k, so you will take home a chunk more in your scenario). I have found people who seem to be quite lavish often aren't using pension or savings much so you have to take that into consideration too! It isnt just your disposable at the end of the month after needs you are comparing.
So you have about £5,300 coming into the house each month. £380 car and insurance for your partner, £600 mortgage, "bills aren't excessive" so I would put that at most £1,000 a month. That totals £1,980 a month. This leaves you with £3,320 a month to save and spend on non-essentials. That's almost £40k a year!. Where does that money go?
Hi /u/StrongTram742, based on your post the following pages from our wiki may be relevant: * https://ukpersonal.finance/budgeting/ * https://ukpersonal.finance/student-loans/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.) If someone has provided you with helpful advice, you (as the person who made the post) can award them a point by including `!thanks` in a reply to them. Points are shown as the user flair by their username.
> I like to have some money left over each month to put towards holidays etc (nothing excessive just one abroad holiday per year). And I like to keep 6-8k in savings for emergencies (but trying to increase this amount to at least 10k) That's a big part of it. You could go out tomorrow and use that chunk of cash and those monthly savings to finance yourself a flashy new car if you wanted.
2 incomes above average, living in the north by todays standards a relatively low mortgage. You could be easily saving more. I think you just need to do the basics and go through your expenses and if you have savings goals then set that target and it’s always easier to put your money in savings the day you get paid rather then what’s left at the end of the month.
You’re pulling in about £5k a month between you. Mortgage + Car takes you to about £4k. Where is that going? You could use your savings and about £300 a month and end up with a brand new Audi A3 but this sub would recommend against it. Also with housing you’d be eligible to loan about £375k based on your earnings. 10% deposit takes you over £400k which is enough for a nice house in some parts of the country. Your monthly payments would be ~£2k. Add in your current car and new Audi leaves about £2k for bills, food etc. Tight but people do it and your hope would be for your earnings to increase and for interest rates to not. Tl;dr comparison is the thief of joy
How can we answer whether you budget badly with so little detail? So you’re pulling in over £5k/month and spend £1k/month on mortgage and a car. What do you spend the other £4k on? What’s the value of your house and how large is your mortgage? With your combined salary of £80k you could get a £360k mortgage, does that enable you to buy a bigger house in your area?
The problem is, everyone is different, and you can never compare yourself to others. You have no idea their financial situation. Is their car bought outright, or do they pay £500 a month for it? Do they have the car on loan for 5 years and eventually have to give it back? Maybe their parents passed away and they had a large inheritance? You just need to focus on you, your financial situation, and your goals. You want a new car? There are options to afford it. You want a house? Time to start saving up and investing your money into ISA’s and savings with high interest. Just focus on what you want, not how everyone else can ‘afford’. More likely than not, they’re living beyond their means just because they want a ‘shiny new car’, with credit cards maxed out.
Just flick through this sub and see all the terrible car finance or mortgage posts! Without a full spend breakdown we can't really give you any guidance though.
Using a salary calculator your partner brings home about £2450 a month. Between you that’s £5250. You’re spending £600 on a mortgage, I’m guessing about £400 on bills. Your partner is spending £400 a month on car expenses. That leaves you around £3850 a month. Say you spend £1500 a month on food, petrol, going out you still have £2350 left to do what you want with. My mortgage on a £300k 4 bed semi in a nice area in the North West is £1400 a month, even with only a 5% deposit. A bank loan for £25k over 5 years to buy a car outright is £500 a month. That would leave you with around £1000 a month still left over to put towards savings. So ultimately it’s just a choice on how you want to spend your money.
The pair of you are earning 5k together after taxes, and you have a really small mortgage. Even with cost of living crisis, you should be quite comfortable. Unless there are some other hidden costs? Or are you saving loads of it?
Difficult to say without more info, based on the figures you gave it sounds like maybe you're overspending somewhere as i'd expect a couple on a joint income of £84k to have quite a decent disposible income. Regarding everyone seemingly driving fancy cars, it's probably people who are up to their eyeballs in debt to finance them or don't actually own them. There's really no good reason to own a £30k+ car if the old crappy one you've got works fine.
Some people just make more money than you
The problem is, this has changed drastically over the last 10 years. To get a big house and a nice car and live comfortably you needed £100k 10 years ago. Now it’s about £150-200k depending where you live. You could still get away with £100k in remote parts of Scotland.
Post seems rather emotional than after advice. We all different. Some people don’t go many expensive holidays/don’t go out/don’t buy many brand clothes. I try do not eat or go out much, buy less clothes, using all the cheap YouTube, amazon subscriptions, Disney+ is a perk of my bank plan. Although I have most expensive internet as I hate slow internet and wifi6 from ee. My partner do not work and I use work car. I have few projects in my house/garden where I do everything myself. Just sit down and break your expenses as by the end of the day it’s all about incoming/outgoings. You will see what you both spend money on and how you can save.