Interesting Links for 01-12-2011

[andrewducker]

• The BBC asks if a family can really live on £40,000 in an article that makes me _really_ angry.
  (tags: income uk salary spending bbc )
• Landlords Use Computers to Arrive at the Right Rental Fee
  (tags: rental housing computers )
• Evidence at the inquiry into journalistic practices shows that some journalists are just scum.
  (tags: journalism uk )
• How

Comments

[autopope]

"I could easily impulse-buy a new car." And routinely buys a newish car every couple of years.

Right. This is why you find it difficult to live on a family income of £40K a year.

(Says a guy who drives a 15-year-old car he's had for the past 9 years.)

[andrewducker]

Yeah, that was the bit that made me very angry. Of course things are tight if you constantly buy horribly expensive things!

[danieldwilliam]

Aye that would do it.

Difficult to see past Mr Micawber on financial happiness if you* earn an okay salary.

*I nearly wrote if you are fortunate enough to earn an average salary and then I thought - you shouldn't *have* to be fortunate to earn an average salary - just average.

[andrewducker]

I'm now curious as to whether they've used median or mean.

[danieldwilliam]

I think it's the mean. There is an Institute for Fiscal Studies, um, study on which I think the figures are based. I'm going to see if I can find it.

[autopope]

I will concede that implicit in the thumbnail character sketch was the issue that this person has to commute for work by car (and given their profession may have to drive a lot to remote work sites). So it's quite likely she needs a car and, sitting in the thing for 10+ hours a week, it's not unreasonable to want a nice one.

But the car pictured was a rather newish compact hatchback.

That's basically pissing away money on a nasty-but-fashionable tin box that will be dying after 80,000 miles/five years.

She could spend the same amount of money instead on a 5-6 year old BMW 3 series or similar, rather than a 1-2 year old tin box. A much nicer car, somewhat more expensive to maintain but more reliable and built to last a lot longer. Then she'd get 4-5 years' use out of it instead of 1-2 years. Which works out cheaper in both the short and long run.

[xquiq]

Couldn't agree more on cars - never quite understood prioritising a constant replacement of a depreciating asset against other things, though I know plenty of people who do.

T has a 7 year old Saab which is our 'main' car. It would be very expensive if new and which was nearly 5 when we got it, but because of the build quality we're not at all worried about its age and will run it until either it's no-longer cost-effective.

At my stage in life, I'd honestly rather put the 10 grand into reducing the mortgage, although in many ways that's a symptom of buying in Edinburgh.

[daveon]

Well, this being 2011, that's more like 150,000 miles.... but yes about the Tin Box.

I bought my first new car 3 years ago, and I'm still happy we did. It's a popular make in the local area and the make also has a track record of lasting pretty damn near forever. We'll probably hold onto it that long too...

[bohemiancoast]

Actually, things turn out to be tight for people who buy lots of 'normal' things too. We don't teach kids household management or budgeting, we provide buckets of easy credit and advertise to people non-stop; it's very easy to end your 20s with either no house or a massive mortgage, a year's salary worth of consumer debt, and an insatiable desire for teh shiny. And when the prime minister suggests that perhaps people who are feeling the pinch should tighten their belts a bit, the Treasury has to pull him aside and warn him that the economy is dependent on people continuing to borrow beyond their means.

[andrewducker]

That was me - although I was lucky that it was only about £2k I'd racked up, and it only took me about 18 months to pay it off!

And yes, the economy is dependent on expansion, and if we all spent our time paying our debts off rather than buying more shiny things it would pretty much grind to a halt. As it is currently doing. The only question is how long the grinding will take, and how sharp it will be.

[poisonduk]

Well I'm driving a new car every two years and sending a child to private school on my salary. The article tells you how much their house is valued at but no mention of their mortgage repayments or how long they've owned the property. The bulk of someone's monthly outlay is their mortgage repayment. This couple may only be paying a pittance a month in which case running two newish cars and regular holidays are easily achieveable on that salary with good budgeting.

If I had stayed in my first place in Morningside, it was last on the market about 4 years ago for Offers Over £220k, when I lived in it my mortgage repayments were about £200, so if I hadn't moved through three other houses I would still be sitting pretty with minimal outlay. In fact I'd possibly have no mortgage as I bought it in 1989 on a 25 year mortgage so would certainly be into my last three years now. Damn why did I ever move?

Just saying, don't get worked up at an article missing key facts.

[andrewducker]

People have no right to complain about things being a bit tight if they're splashing out on new expensive things every two years. If things are a bit tight then they can make their car last more than two years, or buy a second-hand one.

[poisonduk]

Am I being stupid but I don't see the couple with the cars and holidays complaining? They refer to feeling comfortable and stable. The other couple complain about things being tight.

[andrewducker]

No, actually, you're right. I got them confused with the financial advisor _and_ one of the couples underneath. D'oh!

[poisonduk]

It is an abysmally laid out article! I reread it several times to satisfy myself who was who. I think the biggest hint they have next to no mortgage is that on £40K she could repay a £5K loan in three months.

[andrewducker]

Yeah, about 1/3 of my pay goes straight out the door in mortgage. If it wasn't for that I'd be able to spend more money on stupid things!