lifestyle

on that lifestyle inflation trap

We hustled hard to pay for our wedding and honeymoon ourselves, with nothing borrowed from banks or family members. All in our 20’s to boot (go us!).

After the big day and our glorious honeymoon, we landed back down to earth with a happy bump. Time to celebrate – we could spend money again! We did actually incur £1,000 of unexpected overspend after our wedding and honeymoon, of which £800 was because our car broke a few weeks before the wedding and needed to be fixed. We put the cost on our credit card, knowing the statement would hit after we got back from honeymoon and that our paychecks would cover the overspend.   

So, what do you do when on the hamster wheel of life when you’ve

  1. Got your undergraduate degree
  2. Post-graduate qualification is in the bag
  3. Jobs, car & first home acquired
  4. Made it official and got hitched?

You carry on surfing the wave that is lifestyle inflation and start saving for the deposit on your next house, of course. We began looking in earnest at potential houses a year after our wedding. We were looking at some new build developments and let me tell you, we had A LOT of fun nosing around some show homes.

starting from zero

We were looking at purchasing a £400k house. Which was an absolute, complete stretch for our mid 20’s selves. However, the scary thing is, we could’ve borrowed that amount of money to buy the house; combined income and a 10% deposit made the possibility of a bank lending us that much money pretty certain. But what I think is scarier was our attitude. We genuinely believed this was the logical next step; we were both professionals, we earned good salaries, we wanted to move away from the area we’d grown up in – an expensive house, in a lovely area was the answer, no?

We were starting at a place of £0 with nothing to show in terms of assets. Our net worth was actually negative as we still had my student loan to pay back. Our first home was shared ownership which we bought just before the 2008 crash, so were in negative equity. We were desperately trying to save £100,000 to have enough for a general emergency fund, house deposit, legal fees and the new furniture and miscellaneous items that of course you need for your new house.

But for what?

To have our cash savings crash way back down and be saddled with exorbitantly high mortgage payments? And to take on the worry of how precarious our situation could have been. Would we have been able to afford the mortgage had interest rates risen? What if one of us was made redundant – how would we afford our household bills? Just because you can borrow up to a certain limit with very little investment on your part, doesn’t mean it’s a good idea to.

Yes, I felt trapped in our first home as I hated the area we lived in but I can say with some certainty, if we’d have moved into that £400k house, I’d have felt trapped by the high mortgage payments and the worry of not being as financially secure as I’d have liked. In the end, the decision was made for us as Mr. NC was relocated with his job to another city, so we continued to rent as we were sure the relocation wasn’t going to be permanent.

Whilst we were saving to move, we amassed £30,000 by being really strict on ourselves and denying ourselves a lot of things. Looking back, our approach was the wrong one, as we ended up getting really frustrated, stressed and demoralised with saving. We couldn’t see the achievement of having saved a bloody impressive amount of money in about 8 months – we focused on the wrong perspective of how restricted we felt. However, I’ll forever be grateful to our past selves for hustling and being strict to amass that cash. It taught me a couple of things I still live by today

  • it’s important whilst saving to not deny yourself everything.
  • having a good base of cash is everything. Money gives you options. It’s not about being rich – it’s about having the options to do what you really want to.

live for yourself

I think it can be hard when you see people around you, people you went to school with or people you work with getting a new car or new house or the latest gadget or continuous luxury holidays. You feel the need to keep up. And I think society makes us feel like we need to keep up.

It’s like you’re in the ocean after your boat capsized, treading water, desperately trying to keep your head above the water. But for what? If you’re not happy with it, then you’re living for others. Or for society’s expectations of how you should be living life. Which is stupid. Because really, why should you care about what Barry from Accounting thinks about the square footage of your house or where you took your last holiday?

It’s a vicious cycle of interdependence. You feel the pressure to upgrade, so you do. Which makes your friends envious and think they need to keep up, so they do. But that makes you feel the need to impress people with a Facebook album of snaps from your tropical getaway. And on, and on it goes.

If you want to travel and see the world, then make it happen. But make it happen if it’s truly a life goal and not because you think it’ll make for some pretty amazing Facebook gloating.

It took me a while to figure this all out and to just truly live for myself. I’m glad of the clarity that relocating has given me for what I want in life. Which definitely isn’t a big house with an even bigger mortgage to boot. I want to buy my freedom.

–NC

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