Guest The Pom Queen Posted October 7, 2018 Share Posted October 7, 2018 I am sorry but this story is like another family we had on here where they were earning huge amounts and then said they could only afford baked beans and tomato sauce for dinner. People need to live within their means. I admit I’m guilty for buying things on my credit card, or having a holiday I can’t really afford but I wouldn’t then go to the media and say the cost of living in Australia is too high. We lived in Townsville, my son is still there. He makes ends meet and he is at uni with a part time job. Why do they need $84,000 of new cars between them both. They could have a cheap run around and one family car. ‘Why do they need to spend $600 per week on a huge house, you can get some stunning rentals for $400pw. They day there largest expense is education for their son. There are a couple of good government schools in Townsville, even the Catholic schools don’t cost that much a year. LIVING in Townsville, 40-year-old Toby* and his wife Leanne* have worked hard to provide a comfortable lifestyle for their young family of three. As parents of an eight-year-old son, their gross income is more than $215,000 a year, a figure more than $100,000 above the national household average. But Toby, a finance manager, and Leanne, a teacher, say it’s just not enough. According to McCrindle research, the average household earns just under $110,000 per annum, while the top one in five earn more than twice this (exceeding $260,000). On the other end of the spectrum, the bottom one in five take home around one-fifth of the average (a little over $23,000). But despite their above average income, and living in a regional centre, Toby says they still “struggle to make ends meet”. “I am $80k net and my wife is $75k net,” he told news.com.au for Cash Confessions, where we ask Australians how much they earn and track how they spend it over a month. “Which doesn’t feel like a huge income … and we aren’t able to save much at all … only around $5950 each year. “Everyone has different circumstances, but we do not live a life of luxury. There’s no big holidays, or boats or houses. Our biggest expenses are education for our son, transportation and our personal loans each month.” Toby and his wife say they don’t live outside their means, such as only spending $40 a month on coffee, but still struggle on a $200,000 income. As a financial manager, Toby keeps a tight grip on his family’s expenditure each month to ensure they don’t dip into the red. But it’s the repayment of their $100,000 personal loan that hits their hip pocket the hardest each week. This includes paying off $46,000 on a Subaru Forrester bought in 2016, and $38,000 on a Hyundai i40. “We pay $1000 each fortnight for the personal loan,” he said. “The loan includes the cars, piano and some holidays.” In August, it was revealed Australians had borrowed $46.6 billion in personal loans over the past 12 months. RateCity analysed Australian Bureau of Statistics data from the past year and found personal loan numbers were up 6.4 per cent year on year, with more than half a million Australians using them to buy cars in that period. The total borrowing for new cars was $8.33 billion at an average loan size of $36,341. A further $5.88 billion was borrowed for used cars. On top of this, we borrowed $6.05 billion for debt consolidation and $2.54 billion for household goods, but despite the huge outlay, many borrowers are confused about how personal loans work and why they may not be offered the low interest rates they see on advertisements. Despite bringing in six figures together, Toby and Leanne say they still struggle to make ends meet. According to RateCity chief executive officer Paul Marshall, personal loans are often awarded through risk-based pricing, which means the lender assesses the loan applicant before determining approval and offering an interest rate. Other major personal loan borrowings over the year were $2.54 billion for household goods; $826 million for travel and holidays; $759 million for boats, caravans and trailers; and $409 million for motorcycles and scooters. Along with the loan, Toby says they choose to spend more on rent as to live in a larger home in Townsville. “Rent is quite expensive,” he said. “We spend $600 a week and the average would be around $400. “There is a lot of crime up here, and we wanted to be in a nicer area. So it’s a five-bedroom house with a pool on the golf course. But we can’t afford to buy … we don’t even have a deposit. While we would like to one day, we don’t know where to cut expenses. Education ($866/month) is important to us. While two cars was a big drain on their annual incomes, Toby said the household couldn’t function with one. Each month, the pair will spend close to $2000 each month on repayments, fuel, registration, insurance and servicing for their fleet. According to a 2016 study by the Transport Affordability Index by the Australian Automobile Association, Sydney households face the highest transport costs of any city in Australia — both in dollar terms and as a percentage of household income. The study revealed households were now spending up to $22,000 a year just to keep their cars on the road as toll ways, insurance and other costs continue to rise. According to the research, a two-car household faces transport costs of $419 per week in Sydney, versus $376 in Brisbane and $348 in Melbourne. But in the city where critical decisions on transport funding is made — the national capital, Canberra — the average weekly cost to run a car is $299, ranking it among the cheapest in the country. But despite the expense, Toby said his family had no other choice. “We really need two cars,” he explained. “My wife needs one for her work … and I need one to drop off and pick up our son and for work. “They are a big hole for us … but everyone has different circumstances.” https://www.cairnspost.com.au/lifestyle/cash-confessions-on-215k-we-still-struggle-to-make-ends-meet/news-story/685f07a76c0e32f89180955d6692619c Quote Link to comment Share on other sites More sharing options...
Guest The Pom Queen Posted October 7, 2018 Share Posted October 7, 2018 So looking at the link and their monthly outgoings they spend $1,836.65 a month on recreational activities. They could knock a $1,000 off their rent a month. Most people wouldn’t have a loan repayment of $2,166.67 per month Quote Link to comment Share on other sites More sharing options...
Nemesis Posted October 7, 2018 Share Posted October 7, 2018 (edited) $182 for Recorder lessons??? Give the kid a book and a recorder, thats the way most of us learnt! And as for $43 on coffee....ever heard of a jar of Nescafe?! Edited October 7, 2018 by Nemesis 1 Quote Link to comment Share on other sites More sharing options...
NicF Posted October 7, 2018 Share Posted October 7, 2018 Sorry but people like that make me sick. So many people manage to live quite comfortably on a lot less. They need to take a good look at themsleves and ask what is really nessessary and stop thinking they should have the best of everything all the time. We currently live on about $140k a year before tax and are pretty comfortable but we had a short period where my OH was out of work and we were living on my earnings of about $55k a year for a while. Now that was a struggle. The couple above should try living on that - it would put there struggles on $200k a year in to perspective for them. 4 Quote Link to comment Share on other sites More sharing options...
Skani Posted October 7, 2018 Share Posted October 7, 2018 Makes me sick too - so many unnecessary extravagances in that lifestyle. So they need a 5 bedroom house for themselves and one child? Says it all, really. 2 Quote Link to comment Share on other sites More sharing options...
Beffers Posted October 7, 2018 Share Posted October 7, 2018 (edited) These people are clearly not sensible when it comes to money. Why do they need such a huge house? We are a family of 3 and rent a 2 bed/2 lounge cottage in Melbourne area for 1700 a month. We do run two cars (needed for work AND we live in a bushfire area so we would need to be mobile) and our vehicle expenses are nowhere near close to that. Our daughter's activities costs us around $400 a month, granted, but that's our choice and easily affordable given that we also save 2K+ a month, and we jointly earn less than 200K a year. Our health insurance with top level cover is 320/month, so they need to shop around. Also we don't close to that on food! What are they buying??? Reality check required. As is some common sense! Edited October 7, 2018 by Beffers 1 Quote Link to comment Share on other sites More sharing options...
can1983 Posted October 8, 2018 Share Posted October 8, 2018 I have to say I did the same exercise for our family of 4 last week. We spend $7100 a month which is just over our income before we factor in the rental income in the uk. Yes their lifestyle is extreme and they are spending $12,000 a month which is a bit eyewattering for someone who doesn't own a home. But the principle applies I think, $112k income (our family income) which is about national average is not enough to live in Australia. We live in Hobart which is one of the cheapest places to live and its fair to say I feel to live a comfortable life around $150k family income is required. Quote Link to comment Share on other sites More sharing options...
Skani Posted October 8, 2018 Share Posted October 8, 2018 1 hour ago, can1983 said: $112k income (our family income) which is about national average ... At the 2016 census the median weekly household income in Australia was $1438 = $74776 pa. So your family income is almost 50% above the median. Given little or no wage growth since 2016, the situation would not be much different now. Quote Link to comment Share on other sites More sharing options...
can1983 Posted October 8, 2018 Share Posted October 8, 2018 19 minutes ago, Skani said: At the 2016 census the median weekly household income in Australia was $1438 = $74776 pa. So your family income is almost 50% above the median. Given little or no wage growth since 2016, the situation would not be much different now. I have no idea how anyone who didn't pay off their $20k mortgage in 1981 could live on that. Our spending in the last 12 months excluding rent and capital purchases such as buying cars was $60k and that's without any loans, payments etc which we don't have. We sort of have private medical though - we put away $200 per fortnight into a savings account to cover future possible requirements rather than giving it to medibank or Bupa. 1 Quote Link to comment Share on other sites More sharing options...
Paul1Perth Posted October 8, 2018 Share Posted October 8, 2018 The blokes a financial adviser too. We've never been close to that gross income, had 2 kids, paid the mortgage off and managed to have decent holidays most years and think we have a pretty good lifestyle. These people need to get a grip on their expenses. 1 Quote Link to comment Share on other sites More sharing options...
can1983 Posted October 8, 2018 Share Posted October 8, 2018 13 minutes ago, Paul1Perth said: The blokes a financial adviser too. We've never been close to that gross income, had 2 kids, paid the mortgage off and managed to have decent holidays most years and think we have a pretty good lifestyle. These people need to get a grip on their expenses. I think we have a pretty good lifestyle too. But I do think you need a family income of $150k to do that if you are starting now and don't have the home equity or savings behind you. 1 Quote Link to comment Share on other sites More sharing options...
Bobj Posted October 8, 2018 Share Posted October 8, 2018 Might I just add that when you retire, make sure you have a truck full of cash? Mum and I live on $16,000 a year pension and need to break into our piggy bank to pay for insurance etc. So, build up for your future life, because, hopefully, one day you will retire and that's it for a salary, or wage... But still very happy little vegemites. Cheers, Bobj. 4 Quote Link to comment Share on other sites More sharing options...
welljock Posted October 8, 2018 Share Posted October 8, 2018 6 hours ago, Skani said: Makes me sick too - so many unnecessary extravagances in that lifestyle. So they need a 5 bedroom house for themselves and one child? Says it all, really. They need the 3 extra bedrooms for walk in wardrobes for the $433 they spend each month on clothes!! Struggling to make ends meet but spend over $1000 a month on entertainment 3 Quote Link to comment Share on other sites More sharing options...
Nemesis Posted October 8, 2018 Share Posted October 8, 2018 I certainly wouldn't be choosing him as my financial advisor! Quote Link to comment Share on other sites More sharing options...
Jon the Hat Posted October 9, 2018 Share Posted October 9, 2018 This is a timely pointer for me; I am considering a role based in Sydney, and looking at property Rentals which are frankly a bit scary - up to $1500 a week for a 3 or 4 bed in admittedly very nice suburbs. Putting aside for a minute whether I need to live in Lane Cove, how much would you want to earn (single Salary) in Sydney to cover this kind off rent? I am thinking something like $225k plus super. Any thoughts? We are looking a very nice suburbs because Sydney is not first choice, the job isn't perfect, and I don't want to move across the world to live in endless suburbia miles from anywhere. Quote Link to comment Share on other sites More sharing options...
ABG Posted October 9, 2018 Share Posted October 9, 2018 There’s a lot of fluff in their budget, but we’re paying $64 more a month a month in rent and that’s for a 3 bed in Melbourne, about 25km from CBD! Our total spend per month though is 6K for a family of 4 and we live quite comfortably. Not sure what’s going on with their cars; 100k in loans for car+piano+holidays (repaid at 2k/month), plus another grand ‘car repayments’, plus 400 a month in car running costs. Double accounting for dramatic effect?? Quote Link to comment Share on other sites More sharing options...
Jon the Hat Posted October 9, 2018 Share Posted October 9, 2018 57 minutes ago, ABG said: There’s a lot of fluff in their budget, but we’re paying $64 more a month a month in rent and that’s for a 3 bed in Melbourne, about 25km from CBD! Our total spend per month though is 6K for a family of 4 and we live quite comfortably. Not sure what’s going on with their cars; 100k in loans for car+piano+holidays (repaid at 2k/month), plus another grand ‘car repayments’, plus 400 a month in car running costs. Double accounting for dramatic effect?? The story is essentially idiots who can't control their spending and racked up $100 debt find they don't have much left at the end of the month after paying for it all. Quote Link to comment Share on other sites More sharing options...
starlight7 Posted October 9, 2018 Share Posted October 9, 2018 Have they never heard of Aldi? or Cosco? Silly people. Quote Link to comment Share on other sites More sharing options...
Bulya Posted October 9, 2018 Share Posted October 9, 2018 4 minutes ago, starlight7 said: Have they never heard of Aldi? or Cosco? Silly people. Love Costco, but it’s a dangerous pull on your wallet when you’re there Quote Link to comment Share on other sites More sharing options...
starlight7 Posted October 10, 2018 Share Posted October 10, 2018 21 hours ago, Bulya said: Love Costco, but it’s a dangerous pull on your wallet when you’re there It certainly is- I go in for bread and veg and spend $200- every time! 1 Quote Link to comment Share on other sites More sharing options...
Bulya Posted October 10, 2018 Share Posted October 10, 2018 22 minutes ago, starlight7 said: It certainly is- I go in for bread and veg and spend $200- every time! Went for a tub of Skippy Super Chunk peanut butter and spent hundreds. Can never have enough Mag Lites or engine oil.... 1 1 Quote Link to comment Share on other sites More sharing options...
Skani Posted October 10, 2018 Share Posted October 10, 2018 On 09/10/2018 at 23:29, starlight7 said: Have they never heard of Aldi? or Cosco? Silly people. I'm fairly sure Townsville doesn't have either of those. But that's no excuse for their extravagance: we don't have them in Hobart either and I find their expenses eye watering. Quote Link to comment Share on other sites More sharing options...
rammygirl Posted October 11, 2018 Share Posted October 11, 2018 It is the debt they have that has made the biggest difference. Really no need to spend that much on cars. I fear that people feel they deserve a certain lifestyle and wish to ‘keep up’. Of course the people they want to keep up with probably have massive debts too........ I see young kids on the bus going to school with iPhone X’s, they get used to having it all............ I also worry about the increasing use of afterpay, irresponsible lending for non essential ‘stuff’ A friend of ours told us his daughter was in debt, (like over $10,000) they only found out when people came to the house to re possess her car! She had been living at home after dropping out of uni, but working in retail and earning OK. She had been spending too much and taken on too many debts and ignored it all. They were not best pleased, she needed the car to get to work so they paid enough for her to keep it. They made her go to debt counseling and sort it out and she will also pay them back. Hopefully a lesson learned. She really didn’t understand how she was in so much debt and had very little to show for it, of course the interest builds up when you pay the minimum. Amount off. 2 Quote Link to comment Share on other sites More sharing options...
DT55 Posted October 11, 2018 Share Posted October 11, 2018 It's ironic the guy works in finance..... 2 Quote Link to comment Share on other sites More sharing options...
Jon the Hat Posted October 11, 2018 Share Posted October 11, 2018 2 hours ago, DT55 said: It's ironic the guy works in finance..... Plenty of idiots in Finance, I have employed a number of them over the years! Quote Link to comment Share on other sites More sharing options...
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