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Living within your means

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The occasional golf game with my brother and brother in law. I'm very boring and probably on the spectrum which is why I'm happy to repeat the same process nearly every day. 6 months a year I'll nerd out with sport. Over Summer I'll just chill on YouTube. I'm hoping to have the house paid off in around 8 years I think. After that I might relax and splash some money.
Thanks for replying, I realise I sounded nosy :relaxed:

We're all different.
 
That brings another thought to mind: I also blame Afterpay (and its competitors). It teaches *ing terrible money habits. I get taking out a loan for a house or a car, but a loan to buy a pair of shoes? * me, if you don't have the money yet, don't buy it!
Can't you afterpay holidays now?

Everything is incredibly expensive but people really don't help themselves. I work with people who are buying lunch every time they're in the office, think it's funny that they can't cook, and obsess over a new car. they can't stay put for a long weekend so they're going to Hobart or Sydney four times a year and planning some extravagant trip to Mexico or the Med. I know people who can't get a tram to the next suburb so insist on a 20 dollar uber and then go 'we should have just walked that.' stuff like ordering food they don't touch, constantly buying absolute tat and having a house with anko products that break down and clothes that don't last. they'll go somewhere or buy something for convenience and out of pure laziness. chick I work with routinely goes to a 7 Eleven to buy a bunch of bananas and comes back with those and four packets of some other shite. that's got to cost genuinely 30 or so bucks.

I don't work at Ernst & Young and didn't attend an elite private school either so I don't know how they're keeping afloat, I assume it's just massive debt.

The biggest thing now though is the comfort of owning a home (outright or just about) and having had 20-plus years of working. being on 50 grand since in the 90s is completely different to being on 90 today. my parents can go on holidays on a whim, buy a brand new car when the old one dies like it's replacing the batteries in your TV remote, or decide they're over their job and have a couple of months off and it doesn't really change a thing. any of those things would cripple most of my peers.

Honestly if you've been regularly employed for the last 25 years and have nothing, you'd want to have some pretty terrific stories to make up for it.
 
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Have a budget
Keep track of your expenses
Learn to cook
Don't eat out or buy coffee every day on your way to work

It's really not that hard
Many people these days won't even a coffee that isn't brought, there's some real instant coffee hate around.

Sent from my Nokia 7.2 using Tapatalk
 
I like to live by the motto if I can't afford I don't buy it. Housing excepted. Taking loans for things like cars and boats I'm not keen on. I bought an older ute and a tinny outright with cash. Suits my needs and in the price range. Buy a lot of food in bulk as well and freeze it.
 
Only ever borrowed for a mortgage. There used to be the lay-by system, where the shop would put aside whatever you wanted, eg kids’ Christmas toys, or something you didn’t have enough cash for, and you would pay it off over a few weeks, then collect it (always an exciting day 😀).

Then came credit cards…
 
Many people these days won't even a coffee that isn't brought, there's some real instant coffee hate around.

You can't beat a good barista made coffee but sometimes you pay $6 and it's meh. At home I've got an Aldi machine and use their no. 11 pods. It's pretty damn good for about 50c a cup.
 
Only ever borrowed for a mortgage. There used to be the lay-by system, where the shop would put aside whatever you wanted, eg kids’ Christmas toys, or something you didn’t have enough cash for, and you would pay it off over a few weeks, then collect it (always an exciting day 😀).

Then came credit cards…
Lay buy was a classic for working class families in Australia in England, I think actually going up and paying actual cash for an item is nowhere near as insidious as After Pay. you could also stop the payments and get the money back iirc.

I was always told to never get a credit card and to live within your means, but to treat yourself. I like buying good quality stuff and it’s all lasted for ages. it’s one of the nicest things my parents have instilled in me.

The issue with the middle class, all over the world, is they generally piss money away on absolute pish and go into stupid debt just to impress other people. I know people who went to good private schools but they’d alternate between toast and takeaway for dinner and have Sanyo TVs and shit clothes.
 
We live within our means.

We are ahead in our mortgage, and that is the only debt we have.

We aren't extravagant in our spending, we shop at Aldi, Woolworths and a fresh food place to minimise our costs. But cost of living increases still don't make it easy, no matter how responsible you are with money. We don't wear high end designer clothes, we drive modest cars (both have Hyundai's), and we don't go out often for meals let alone expensive ones.

I'm pretty frugal, my wife a bit more free spending but not outrageous. Would spend far too much on coffee regularly and we'd have regular arguments about it. Better now.

No CC and decent amount of savings in the bank.

And I'm sure those with kids will understand when I say they cost a lot.
 
I ore was quite careful for quite a while until about 2014. Only went interstate once a year, drank moderately. From 2015 started travelling overseas once a year; mortgage now has an offset with a dollar difference in it; don’t drink anymore; travel interstate or overseas at least 3 times a year; 500 a week into
superannuation; golf at least 3 times a week; went 12 days in a row before I took off to Japan on new years eve. I did the hard yards, now that the end is well and truly closer to the start I’m spending like a drunken sailor.
 
Hello crico


Crico must be a new thing because no way old people would be reckless with their money!
 
I ore was quite careful for quite a while until about 2014. Only went interstate once a year, drank moderately. From 2015 started travelling overseas once a year; mortgage now has an offset with a dollar difference in it; don’t drink anymore; travel interstate or overseas at least 3 times a year; 500 a week into
superannuation; golf at least 3 times a week; went 12 days in a row before I took off to Japan on new years eve. I did the hard yards, now that the end is well and truly closer to the start I’m spending like a drunken sailor.

If you have done the hard yards you have earned the right to go hammer and tongs eventually!
 

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I was always told to never get a credit card and to live within your means, but to treat yourself. I like buying good quality stuff and it’s all lasted for ages. it’s one of the nicest things my parents have instilled in me.
As a financial advisor who works on this sort of thing, getting people out of short term debt or paying their mortgage of in half the time the bank wants them to, this is key!

We've got studies that show people spend 12-18% more on credit than they do debit basis. It's not the interest that cripples people financially, it's the overspending. The banks actually want you to not notice it and never incur the high interest costs. Because you'll keep overspending year after year.

Had a client recently say but I get my $500 voucher end of year with the points. I pointed out that they probably spent somewhere between $10-16k more than they should have with the credit card in use. Banks don't run too many things as a loss maker, $16k overspending equals a lot of merchant fees for the bank, plus there was a $100 a year card fee.
 
As a financial advisor who works on this sort of thing, getting people out of short term debt or paying their mortgage of in half the time the bank wants them to, this is key!

The issue is many people on social media say you shouldn't pay your mortgage off as quickly as possible.

Finance is a difficult topic to get advice, one thing might be the right thing to do but there are equally more people saying the opposite.

Just like the Rent money is dead money debate.
 
The issue is many people on social media say you shouldn't pay your mortgage off as quickly as possible.

Finance is a difficult topic to get advice, one thing might be the right thing to do but there are equally more people saying the opposite.

Just like the Rent money is dead money debate.
With high interest rates it's pretty black and white to pay down home debt as fast as possible
 
My parents never cared about cars or any of that shabang. As a result, my philosophy is essentially the same. A car is the ability to go from A-> B, and not much more.

By not caring if my car has a few scrapes and dints, and by having a pretty bang average car owned outright and not by the bank (car loans are incredibly predatory), I manage to save so much money. Not driving absolutely everywhere also saves a shit tonne. So does fare evading on public transport a few times here and there ;)

I don't really need a credit card, but I use it anyway for points. I'm pretty targeted with it, such as utilising the Qantas promotions with certain brands that I'm going to buy anyway (not for the sake of it), filling up on petrol and associated stations like BP or Ampol, shopping mostly at Woolies. I'm generally pretty frugal and I wouldn't say that having a credit card makes me have a propensity to live above my means.

I'm 23, and I notice some interesting spending habits among my cohort. There's the ultra-frugal friends to the point that it's almost a friendship dealbreaker, and then there's the irrational spenders that just treat money as a number. Neither will hold anyone in good stead long-term.
 
I'm 23, and I notice some interesting spending habits among my cohort. There's the ultra-frugal friends to the point that it's almost a friendship dealbreaker, and then there's the irrational spenders that just treat money as a number. Neither will hold anyone in good stead long-term.

Have to admit this was me and I think I lost a few friends from it.

It was one of the reasons why I stopped saving so much.
 
The occasional golf game with my brother and brother in law. I'm very boring and probably on the spectrum which is why I'm happy to repeat the same process nearly every day. 6 months a year I'll nerd out with sport. Over Summer I'll just chill on YouTube. I'm hoping to have the house paid off in around 8 years I think. After that I might relax and splash some money.

Love your work. Do what makes you happy and from your posts you are actually going to do very well for yourself.

Props.
 

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Love your work. Do what makes you happy and from your posts you are actually going to do very well for yourself.

Props.

When kiss sung I you were made for loving.

This Fred is made for big sauce...
 
I've never understood people that can't do this. Some people just spend every extra dollar they earn then some. I get it if you have a nice house or expensive car or are always doing cool stuff but some people spend a champagne budget on a beer lifestyle which makes no sense.

I've always found I just got used to the circumstances I was in and if I started earning more money (or in the case of covid suddenly having more due to interest rates being so low on my biggest expense) I would reassess. I think at one point the interest on my first home loan was about almost 60% of my after tax salary. Not fun but over time became less of a burden. My current home loan I have kept the same since pre covid because I could still manage the payments OK and the savings from rates dropping to 2% accumulated in offset. I know people that would've immediately locked in lower repayments to have more money week to week to spend on shit they don't need and then be shocked when rates go back up. Having been through a home loan being stressful I have no interest in going down that path again. I could extend and borrow more etc. but it's not worth it.

It is fascinating to see what the motivations of different people are. I've got friends with high paying corporate jobs that have cars you'd find at some bargain basement car dealer in Maddington. Others will go shopping and not even look at prices of things then be shocked that there is $400 worth of stuff in the trolley. Who actually buys a packet of dishwashing tablets for $50? I would probably buy a coffee once or twice a week and it's not routine, if I am out somewhere and want a coffee or a beer I'll get one and if I want to go out for a coffee or a beer I'll go out. Others buy 2 a day without a consideration that it's a couple of grand a year and hundreds of cups going to landfill. People will Ubereats two iced coffees or something. Is that where we've ended up as a society?

That said I don't know what I would do now if I was starting out work etc. I earned not much and lived in a shitty share house but still maintained the non glamorous life of a an early 20-something. Bought my first house (nothing special) after a couple of years on my second or third salary which still wasn't heaps but when you are used to living off $500 a week then suddenly having $600 feels massive. These days the rent on the shitty share house is probably three or four times what it was and the price of the nothing special house is at least double so I would probably have to live at home to even think about getting ahead so it would be a different mindset.
 
One of my colleagues was freaking out when we had the last interest rate rise and disclosed what their mortgage is each month. Hooly dooly, if I didn't have a heart condition before, that conversation would have given me one.

I don't know how to explain it properly without potentially sharing too much information, but basically their mortgage costs more than her (sizeable) salary every year. They essentially live off about 75% of his salary, the rest goes on the house.
 
I saved and spent my money doing one of those face/off surgeries on my unsuspecting neighbour.

Now I own a house with a pool and he's broke and not allowed within 500 metres of a school

Best investment I've ever made
 
One of my colleagues was freaking out when we had the last interest rate rise and disclosed what their mortgage is each month. Hooly dooly, if I didn't have a heart condition before, that conversation would have given me one.

I don't know how to explain it properly without potentially sharing too much information, but basically their mortgage costs more than her (sizeable) salary every year. They essentially live off about 75% of his salary, the rest goes on the house.

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

But after one year you've either paid $36k to pay off $6-7k of debt or you've paid #72k to pay off $12-13k. It's just paying a premium for the convenience of luxury. Real estate is generally a safe investment over time but it is not uncommon for house prices to stagnate or go backwards for a few years at a time. You really don't want to be left carrying the can needing to sell after paying $150k in interest payments when your $1m house is worth less than you paid for it.
 

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