Signs you are doing well financially.

[SpokeyDokey]

Neat little video from a very financially literate presenter - she has heaps of excellent content to watch.

I particularly like the Status Game comments - here, we opted out long ago.

View: https://youtu.be/oVpUgcL2kxU

 

[DCLane]

We opted out of the 'status' game years ago. I've tried to explain to a couple of neighbours that them paying a huge amount for a PCP car means they're worse off as a result, but the answer is always "but I like my nice BMW". They scoffed at my old Saab/Peugeot despite them costing just a month of their car payment.

As a youngster I was taught "income £1, expenditure £1.05 = misery / income £1, expenditure 95p = happiness".

Yes, we're fortunate to have a decent income. But managing that income during more challenging periods has meant we've no mortgage, no debts and have decent savings. Her spreadsheet isn't much different to the one I've kept for over 20 years with the result being that we're in a position to make larger necessary purchases when required rather than going into debt. My sons appear to have learnt similar principles.

Note that I also see the status game stuff in my cycling club; some members have to have the latest and best bike. Even if they don't ride it much. As a family, apart from son no. 2's ex-team bike, we've got bikes built from older decent but unpopular framesets bought cheaply with nice components fitted.

 

[SpokeyDokey]

We opted out of the 'status' game years ago. I've tried to explain to a couple of neighbours that them paying a huge amount for a PCP car means they're worst off as a result, but the answer is always "but I like my nice BMW". They scoffed at my old Saab/Peugeot despite them costing just a month of their car payment.

As a youngster I was taught "income £1, expenditure £1.05 = misery / income £1, expenditure 95p = happiness".

Yes, we're fortunate to have a decent income. But managing that income during more challenging periods has meant we've no mortgage, no debts and have decent savings. Her spreadsheet isn't much different to the one I've kept for over 20 years with the result being that we're in a position to make larger necessary purchases when required rather than going into debt. My sons appear to have learnt similar principles.

Note that I also see the status game stuff in my cycling club; some members have to have the latest and best bike. Even if they don't ride it much. As a family, apart from son no. 2's ex-team bike, we've got bikes built from older decent but unpopular framesets bought cheaply with nice components fitted.

A lost cause trying to explain the concept to our kids. All credit to instilling some financial discipline into yours. It's very hard to encourage people to swim against the tide of instant gratification and the desire to have the latest and greatest consumer offerings.

I didn't really get financially astute until I was in my 40's. I wish I had access to the sort of advice this lady offers when I was much younger.

 

[gbb]

All of this is true of course but....
I tend to think many people are wired a specific way, you will either be profligate or careful (for want of a better word) It comes from within and in the beginning, im not even sure its a conscience decision, its just what feels right.

Every bit applies to me in a way...

I've always tried (and usually succeeded) to live within my income potential.
I've always tried to limit, or control what debt we have.
I've always saved when I could.
It's never really bothered me having a modest car or house.
I don't really care what anyone else thinks of my status.

Trouble is , I really do think it's hard wired, I'm not sure if someone is generally profligate or needy, you / they can change it ...or that they even want to. (Generally speaking of course, there will always be those in the middle ground that can take something from the advice.

I remember discussing this with my late brother who was always stretched financially. We went through his finances and I told him he could ( if he had told me all his outgoings correctly) save £200 a month.

No firkin way he proclaimed.

You can. I replued...but life will be a bit more boring.

Some people don't want boring or constrained, some people want to live as bigger life as they can.

 

[Once a Wheeler]

A lot of basic good sense here. It makes me think of a sociological experiment carried out in the USA which showed that in certain neighbourhoods people would be prepared to take a cut in salary if it ensured that they earnt more than their neighbours. Good place to set up as a psychotherapist, I would think — it would be a kind of self-perpetuating gravy train as the therapist would inevitably end up earning more than all of his or her neighbours. 🤔

 

[lazybloke]

Interest on debt is usually higher than interest on savings.
So aim to clear debt quickly, especailly unsecured debt with the highest APR.

You can take years off a mortgage by overpaying. There are mortgage payment calculation sites for playing with the numbers.

I also avoided the status game.

PS am utterly horrified at the bit in the video that said average personal debt in the US was $32K, not included mortgages. Maybe I misheard.

 

[ClichéGuevara]

I'll try to summarise a situation that I think supports the lady in the video. I'll use Alf and Bob.

Alf's role had evolved over the years, resulting in it being lower paid than Bob's despite it being greater in volume and complexity.

A review of all job roles ended with Alf's position being graded higher than Bob's and the pay was adjusted accordingly. However, to assist in recruitment, Bob's role was given a pay supplement, which ironically left it paying higher than Alf's albeit with caveats and issues that would impact in the longer term.

Neither would swap roles, but Alf was unhappy Bob was paid more, and Bob was unhappy that his work wasn't as valued, despite both of them now being on considerably more money than they had been because they are comparing to a false standard.

 

[Threevok]

Never done the status game. Had basically the entire street point and laugh, because we had a crappy Fiat Panda for 10 years, while they all had Chelsea Tractors or Pigs On Springs.

Then COVID hit and most of them are down to one (or none) cars now, some forced to use their work vans for everything.

I plan to use my upcoming pittance of statutory redundancy, plus cash in my NEST pension (which is worth nothing in ten years anyway) to pay the mortgage and creditors off completely. Then find me an easy part time job that pays enough just to pay the bills. It’s all about quality of life for me, not material gain. I never plan to retire anyway – I’m not the type.

 

[NorthernDave]

I'm still buying Lurpak so I must be doing ok...

 

[Venod]

It’s all about quality of life for me, not material gain. I never plan to retire anyway – I’m not the type.

I agree with its all about the quality bit, but I can say my quality of life went up at retirement although the material aspect has probably gone down

 

[johnblack]

I like nice things and don't begrudge others having even nicer things, you see a lot of sniping comments about people having cars, or, perish the though a 4x4 on PCP, but there is nothing wrong with that if it's within their budget and that's how they want to spend their money. Driving a nice car is great, so is having a really nice bike, great shoes or going to a great hotel. It is not something to be frowned upon. But it comes down to living within or to your means.

The flip side to some of this is that you get plenty of older people that are scared to spend money and have more than they'll ever use. That sounds miserable to me.

 

[ebikeerwidnes]

Bloke next door used to have a massive Tesla
swapped it now for a top fo the range electric Porche

seems damn silly to me - I like the idea of an electric car but the amount of money he must spend is obscene
We were talking about changing the 13 year old Honda and neither of us can see the point at the moment - especially as it is still ULEZ compliant

It always amazed me - when I worked in a big company - how some people were obsessed with status and job title. The department I worked in was highly technical. We didn;t make a fuss about it but we were all on a higher rank than other IT staff and got pay rises at random to make sure we had no incentive to move company.
Hence we outranked most IT people we were in meetings with and were paid more than even Project Leaders - but everyone assumed that were were "just programmers"
Caused some shock at times when I refused to accept orders from them as they outranked me - until they realised they didn;t!

People's obsession with status over getting the damn job done is just silly IMO!

 

[T4tomo]

My late Dad often said "neither a lender nor a borrower be"

i think you can exclude mortgages from that, and some would say bank saving are effectively a loan to the bank, but the principal is sound.....

 

[Alex321]

Just watched it. I really don't think we have ever played the "status game", but we also haven't really played what she calls the "wealth game" either.

We know we are in a very good position financially (at least as long as I keep working - not too sure just how good my pension is going to end up being).

We have readily accessible savings worth at least 2-3 years of income, not the month she talks of. And that is not counting the 6 months plus worth that is just in the building society current & savings account.

We have zero debt - we put most spending on the credit card, but pay it off in full by DD each month. And the mortgage was paid of round about 10 years ago (which made a huge difference).

And we still spend enough to enjoy life - 1-2 foreign holidays each year, bought a camper van last year, I have what I consider a good bike - not the most expensive, but anything much more would be wasted on me because I don't have the ability to benefit from it, and will never be racing.

 

[All uphill]

I like nice things and don't begrudge others having even nicer things, you see a lot of sniping comments about people having cars, or, perish the though a 4x4 on PCP, but there is nothing wrong with that if it's within their budget and that's how they want to spend their money. Driving a nice car is great, so is having a really nice bike, great shoes or going to a great hotel. It is not something to be frowned upon. But it comes down to living within or to your means.

The flip side to some of this is that you get plenty of older people that are scared to spend money and have more than they'll ever use. That sounds miserable to me.

I don't begrudge others their shiny toys but I often think it's rather pathetic to invest your self esteem in such things.

"It's got 500 BHP, 0-60 in 5 seconds, does 200 leptons when I unleash...."

Do they think the same way about their boiler, washing machine, freezer?