Living within your means

[Shell]

I am on 5.74% iirc and pay less than 1k a month on my mortgage. (and put the 10k extra on it every year)

I'm chilling and am fine, even on my incredibly shit wage.

 

[Shell]

Huge debt = huge interest payments.

$500k @ 6% interest rate is about $3000 a month over 30 years. Double that to $1m and it's $6000. Pretty simple stuff.

How are you going with your house?

 

[Shell]

That's insane. What if if one of them loses their job? What if they split up?

What do they say- you should have enough savings in the bank to live off for at least 6 months?

I have enough for roughly 2 years. And thats not including Centrelink. With that would be a lot longer.

 

[MrsEddieBetts]

That's insane. What if if one of them loses their job? What if they split up?

Yeah I was feeling panicky just listening to them speak. They also have multiple children in private school. We work in an industry that is not high in job security in this economy and if I were them I wouldn't be able to sleep at night.

 

[Scotland]

How are you going with your house?

Pretty well. I was lucky that I decided to move in 2019 when the market was OK (i.e. still expensive but not every home open had 900 people at it) and then with covid coming along the combo of rates dropping to 2%, not being able to leave Westralia and maintaining regular employment meant I was able to get ahead. I could refinance and pay less but I would rather just keep paying down the debt while I am able to.

Not remotely interested in moving any time soon given what has happened to the housing market. Upgrading by just moving one or two suburbs away or to a slightly bigger place would be hundreds of thousands of extra debt. Just not worth it.

 

[kickazz]

People are more consumers now than doers I recon. Marketers have been so good at this over the years. And people socialise less now and if they do it often costs money (compared to what people used to do - camping, card nights, picnics, bushwalks, fishing trips, etc etc)

Buying shit, watching shit, distracting ourselves with shit.

Go out and do stuff, you feel better for it.

As for toys and technology, ask yourself how it enables the things you REALLY enjoy in life. Those memories with friends and family and such. I mean smartphones that have a new gesture setup that makes it 20% easier to scroll through shit? Big deal. But oh how excited people get with some puny little tech feature. It is mental.

And stop getting uber eats. You do realise it is at least 30% cheaper to go and get it yourself, right? I only use it if I'm pissed or stoned.

 

[Scotland]

Things have changed with the advent of streaming services. When I was kid hardly anyone had Foxtel or Austar, Galaxy, Optus Vision etc. before that. Paying $50 or $100 a month to have Foxtel was a big deal in the 2000s. But now people have multiple subscriptions of $10-30 each that add up to more than that and you are the odd one out if you don't.

Can semi understand why people spend money on shit they don't need given how relative costs have changed. I remember my dad bought a flat screen TV maybe 20 years ago. It wasn't top of the line and was double the cost of what my larger, better TV cost in 2020. An $80 video game in 1997 is still $80 today. Etc. I bought a hoodie the other week for $30. The same hoodie I swear would've been more than $30 back when a pub meal was half what is now. Going to the pub at uni with friends used to cost dollars or tens of dollars. A few bucks for a kebab or a burger, $8 jugs etc. Good social experience.

A mate of mine was telling me about taking his family camping over school holidays and it was something like $80 a night for an unpowered site. Granted I'm an ageing millennial but I swear that used to be $5 or $10.

 

[Billy ray]

 

[Shell]

Things have changed with the advent of streaming services. When I was kid hardly anyone had Foxtel or Austar, Galaxy, Optus Vision etc. before that. Paying $50 or $100 a month to have Foxtel was a big deal in the 2000s. But now people have multiple subscriptions of $10-30 each that add up to more than that and you are the odd one out if you don't.

Can semi understand why people spend money on shit they don't need given how relative costs have changed. I remember my dad bought a flat screen TV maybe 20 years ago. It wasn't top of the line and was double the cost of what my larger, better TV cost in 2020. An $80 video game in 1997 is still $80 today. Etc. I bought a hoodie the other week for $30. The same hoodie I swear would've been more than $30 back when a pub meal was half what is now. Going to the pub at uni with friends used to cost dollars or tens of dollars. A few bucks for a kebab or a burger, $8 jugs etc. Good social experience.

A mate of mine was telling me about taking his family camping over school holidays and it was something like $80 a night for an unpowered site. Granted I'm an ageing millennial but I swear that used to be $5 or $10.

I spend maybe $125 a night on staycations in the city. For that I get four walls, a ceiling, furniture as well as room service and a pool

 

[sdfc]

Things have changed with the advent of streaming services. When I was kid hardly anyone had Foxtel or Austar, Galaxy, Optus Vision etc. before that. Paying $50 or $100 a month to have Foxtel was a big deal in the 2000s. But now people have multiple subscriptions of $10-30 each that add up to more than that and you are the odd one out if you don't.

Can semi understand why people spend money on shit they don't need given how relative costs have changed. I remember my dad bought a flat screen TV maybe 20 years ago. It wasn't top of the line and was double the cost of what my larger, better TV cost in 2020. An $80 video game in 1997 is still $80 today. Etc. I bought a hoodie the other week for $30. The same hoodie I swear would've been more than $30 back when a pub meal was half what is now. Going to the pub at uni with friends used to cost dollars or tens of dollars. A few bucks for a kebab or a burger, $8 jugs etc. Good social experience.

A mate of mine was telling me about taking his family camping over school holidays and it was something like $80 a night for an unpowered site. Granted I'm an ageing millennial but I swear that used to be $5 or $10.

I remember when pies were 20c.

 

[Andre]

Things have changed with the advent of streaming services. When I was kid hardly anyone had Foxtel or Austar, Galaxy, Optus Vision etc. before that. Paying $50 or $100 a month to have Foxtel was a big deal in the 2000s. But now people have multiple subscriptions of $10-30 each that add up to more than that and you are the odd one out if you don't.

Can semi understand why people spend money on shit they don't need given how relative costs have changed. I remember my dad bought a flat screen TV maybe 20 years ago. It wasn't top of the line and was double the cost of what my larger, better TV cost in 2020. An $80 video game in 1997 is still $80 today. Etc. I bought a hoodie the other week for $30. The same hoodie I swear would've been more than $30 back when a pub meal was half what is now. Going to the pub at uni with friends used to cost dollars or tens of dollars. A few bucks for a kebab or a burger, $8 jugs etc. Good social experience.

A mate of mine was telling me about taking his family camping over school holidays and it was something like $80 a night for an unpowered site. Granted I'm an ageing millennial but I swear that used to be $5 or $10.

Computers are a good example of (relatively) much cheaper. My first (at the time) decent mid-tier PC, back in 1991 cost me $2k. A decent mid-tier PC these days is still around $2k.

Some of the uptake of multiple streaming services, is they are still decent value, compared to going to the movies. Go to a movie once a month (say parents and one kid), get a meal before or after and some snacks there and you'd be kissing $100 - $150 away depending on which day / session you're doing. Even 3 or 4 streaming services isn't half that. Drop the kid and go out to a decent restaurant or pub and get a couple of alcoholic drinks each and you're not getting change from $100 and quite possibly not $200.

The big one of 'conspicuous spending' to show you're 'as good as the next person' is (especially for younger people) social media is showing your best life. People then compare that against their whole life, including all the shit parts that are carefully hidden by people posting about their wonderful lives. 'Back in the day' outside of the fancy car / clothes, you didn't really know if someone had a big TV, etc. unless you went to their house. In which case you could see they also had a shitty backyard, things needing repairing etc. they had to let slide to afford that TV.

Or even the obvious one, that 'in the real world', you generally associate with those of similar socio-economic means, but social media shows you everyone further up that ladder than you as well. Sure you saw that on TV / magazines etc. back in the past, but it wasn't as real and personal as now. It's not surprising it's driven a lot of 'if them, why not me?', with a lot 'Well not me, because I really can't afford that' cast aside. To some degree it's understandable. If you can see the 'ultimate' purchase of a decent house in a decent suburb, is likely forever going to be out of your reach, then you might as well enjoy the here and now, as sacrificing still won't get you there.

 

[Scotland]

Computers are a good example of (relatively) much cheaper. My first (at the time) decent mid-tier PC, back in 1991 cost me $2k. A decent mid-tier PC these days is still around $2k.

Some of the uptake of multiple streaming services, is they are still decent value, compared to going to the movies. Go to a movie once a month (say parents and one kid), get a meal before or after and some snacks there and you'd be kissing $100 - $150 away depending on which day / session you're doing. Even 3 or 4 streaming services isn't half that. Drop the kid and go out to a decent restaurant or pub and get a couple of alcoholic drinks each and you're not getting change from $100 and quite possibly not $200.

The big one of 'conspicuous spending' to show you're 'as good as the next person' is (especially for younger people) social media is showing your best life. People then compare that against their whole life, including all the shit parts that are carefully hidden by people posting about their wonderful lives. 'Back in the day' outside of the fancy car / clothes, you didn't really know if someone had a big TV, etc. unless you went to their house. In which case you could see they also had a shitty backyard, things needing repairing etc. they had to let slide to afford that TV.

Social media is gross. I have zero interest in showcasing my house or car or anything expensive I own etc. on Instagram or whatever. Maybe that's because I only have a 2024 Rolex but I digress...

Or even the obvious one, that 'in the real world', you generally associate with those of similar socio-economic means, but social media shows you everyone further up that ladder than you as well. Sure you saw that on TV / magazines etc. back in the past, but it wasn't as real and personal as now. It's not surprising it's driven a lot of 'if them, why not me?', with a lot 'Well not me, because I really can't afford that' cast aside. To some degree it's understandable. If you can see the 'ultimate' purchase of a decent house in a decent suburb, is likely forever going to be out of your reach, then you might as well enjoy the here and now, as sacrificing still won't get you there.

One thing I have noticed as I got older is the difference in perspective about income, wealth, status etc. I've got friends with (close to if not) $1m houses paid off and zero debt by 40. That's livin' Barry, IMO. Others earn more - and are probably in a better position of net wealth - but still have a heap of debt hanging over their heads. And everyone handles it differently. If you make $1000 a week and spend $500 on shelter, that's $500 left for everything else. If you make $2000 and spend $1000, then it's $1000. $1000 still goes twice as far as $500 buying the same things. If you have a gigantic mortgage I don't really want to hear about how expensive Coles is. But by the same token just because someone earns more it doesn't mean they have disposable income. This is a concept that some boomers and Gen Xs just don't get. Some people make poor financial decisions. others are just born at the wrong time. Cost of living in Australia is totally skewed by the cost of shelter.

Where I think people get trapped is that they go from earning $1000 to $1500 to $2000 and their spending habits and appetite for debt go up as their income does so they don't really get ahead. Yes you've built your dream house that your family are going to live in for the next 20 or 30 years and that's awesome, but is it a flex? Can you quit your job and do a lap of Australia for 6 months? Can you be a single income family for a period? Are you stuck at home every school holidays because all your income is tied up in loan repayments?