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How do people manage to save much these days?(32 Posts)
My dh & I earn decent amounts although I am part time now so not as much as it was.
Once we've paid all our monthly bills, debts we owe, food shopping, childcare we have a fairly small amount left for everything else to get through the month.
I feel awful that we have no savings as we just don't have anything left to save. I know this is not good and it makes me feel financially insecure.
We are not frivolous, it's just enough to get by each month.
I hear of people having 3-6 months worth of salary in savings and I just don't know how they do it. I worry that it's only us of our friends who are in this position although of course I don't know that is the case.
How do others manage to have a decent (but not extravagant) standard of living and still save?
By not having debt to pay down.
DH and I had debts, we never had any spare cash, but once they were paid we started saving all that money instead. We now have a healthy amount in the bank, enough to keep us going for over a year plus have overpaid the mortgage.
You'll get there
Thanks Ali yes we do have debt to pay each month and it will be a long time before it's all gone. My DH had the debts from before I knew him and we've just had to accept it will be a long haul. Much as I love him I do feel a bit upset at times that his mistakes have now had a pretty big impact on my financial security. For richer, for poorer I guess..
We don't have savings. Could use the credit card in an emergency or borrow from parents if the roof blew off or something as they are very generous and comfortably off.
We have debts mostly from paying for IVF and I don't view savings as a priority until they are paid off.
Agree with pp, it's not having debts to pay, if you could instead put they money in savings each month, that would soon add up.
Also living below your means generally, there's another thread running at the mo that's asking "head or heart?" On buying a house/flat, the op could get a smaller place in a cheaper area that would still suit their needs and mean they could over pay the mortgage and be mortgage free by 45, obviously rather than over pay, they could save that difference as well, however it's interesting just how many people are saying "buy the biggest/best property you can afford", it's feels very "00's" to take the view you should borrow the maximum you can and stretch yourself as much as possible to get the biggest property, (and biggest repayments) you can. A lot of people have gone the "head" option and are living in cheaper properties than they could technically afford, so over time can save that difference.
Make sure you're paying off the debt as efficiently as possible. Check out Money saving expert. It has loads of tips. The faster you pay that off, the better.
For me,doing monthly food shopping (meat order through online butchers and everything else through Tesco) saves me an absolute fortune,more so than anything else tbh
It's often 'accidental' spending that builds up and not seeing where the money has gone.
Obviously debts play a part but it's not always the biggest one for quite a few people.
Everyone prioritises their money differently too
Pay off debts
Learn to live within your means
buy the time the youngest child is at secondary, stuff like child care reduces
THEN you can start to save - at least that is what I've done
and I hit "debt free" day last month
We have no debt - that allows us to save.
Also we do live in a smaller house than we can afford - that way we can go on nice holidays where we can spend as we wish rather than scrimp - everyone has different priorities.
We pay council tax/water rates over 10 months not 12 - so 2 months of that goes straight to savings. Half of anything extra (over the last 10 years) has gone into savings... so car insurance went down by £25 a month - £12.50 goes straight to savings. Insurance policy no longer needed £19 straight to savings.. Child benefit went up - half straight to savings... Pay rise of 1% - straight to savings... £25 win on premium bonds - again - straight to savings... even just little drips - the coin jar gets emptied and half goes to savings...
what you don't get used to having, you don't notice not being able to spend - it is a mindset we have got into and gives us much more than having an extra (usually empty) bedroom.
I pay the savings account first and then budget around the rest. I've had times in my life when I've only been able to put a few quid by and times when I've been able to top up the ISA with hundreds.... but I always keep that Standing Order open.
Definitely don't build up big savings if you have big debts.
I paid off all debts a few months ago and it's made a huge difference. We're now able to save much more.
The only way to save is to have no debt. Concentrate on that and the savings will come.
we have no debts or childcare costs (DH works around school times so does all wrap around care), our mortgage is not too bad (thank you low interest rate) so we have more coming in then going out.
We don't have lots of large electronic toys (Ipads/iphones etc) or sky and we haven't had a holiday overseas for a few years.
I have a reasonable salary so money just builds up over time
It is pretty impossible to save if you have debt. The debt needs to go first, is there anyway to incerease payments? How is your DH planning on paying it off can he do more hours, sell on ebay?
I wouldn't accept that it is just tough luck he has debt I would be expecting him to do something about it, as you say it is having a negative impact on your life together.
I find the best way to save is by what I call 'squirrelling'. I have an old account (that I don't have a cash card for - less temptation). Every couple of days/every week or so, I log into my internet banking and check my current account. If my balance is say £124.35 I transfer £4.35 over into my other account. It's a small enough amount that I don't notice it's gone but it all adds up. I do the same at home with a change jar, every night anything less than a 50p gets thrown in and counted and banked once jar is full.
Our savings took a bit of a hit recently as we just moved house but generally we have about 5k put aside for any emergencies and then a further savings pot for holiday/large purchases. We generally don't do debt and would rather wait, save and buy than by on credit.
OP I really feel for you as we are in the same boat. Servicing a lot of debt makes it nigh on impossible to save.
Our only debt is the mortgage which we are overpaying. We are fortunate to have good salaries, and so pay a set sum every month into ISAs. I don't see this money, and don't miss it. Over the years this has added up to be a significant amount. We are having some work done on the house, and this will be paid for out of savings.
More generally we live fairly modestly given our incomes. One car, about 10 years old, rarely used as we cycle to work. One blow out holiday in the last 15 years....usually we have cheap holidays in France. We could afford private education, but are very happy with the state options so are not intending to spend money on that.
A lot of people spend up to their income and beyond and we are not in that category. Sorry if this sounds a bit smug - it isn't meant that way.
Thanks everyone. DH's debts were so big that we had to get help from the consumer credit counselling service. They were great and dealt with all the creditors and set up repayments with no interest. Each year they review what we can afford to pay. Our mortgage payment is not too huge so we think of this debt payment as an extension of that and just pay it & forget about it. We need to check how long it will take to clear but I know it will be a long time.
I feel better knowing that not everyone is able to save until later ie children at school so hopefully things will get better.
It's definietly about debt.
DH has always been scrupulous about this. Never bought anything he couldn't finance in cash on the spot.
He has also been scrupulous about saving/investing every penny left over each month. Never blows it for the sake IYSWIM.
We're now quite comfortable and enjoy spending our money, but even now, DH will watch the finances very carefully.
Just to reiterate
with interest rates the way they are , savings returns are a fraction of debt costs.
If you can afford an extra £100 a month, pay down debt.
Ignore saving for now.
Then when the debt is gone, transfer ALL of the money you were paying off debt over into starting to save - you'll build up a decent cushion surprisingly fast.
For mutual support on debt, feel free to come and join in the big debt thread
as there are lots of people at all stages along the journey
That is a brilliant point Talkin
I have a friend who is always telling me that I should put money by for Christmas etc and I think she is wrong as any spare cash should go towards paying off the debt as the interest is so much higher.
Has your husband changed his attitude to money since or is he still spending money he doesn't have?
Cherrypi oh no he doesn't do it anymore, he doesn't spend anything really on himself. We nearly split up over it, although we hadn't been together that long. He made mistakes when he was young, single & foolish! I told him I would stand by him as I loved him and we sorted it out together and he's never done it again. It's just hard sometimes, the impact it has had and I feel a bit sad about it, but it's happened so got to deal with it.
Oh that's good. I had a similar thing with my husband but it's all cleared now. I do keep an eye on the finances as I'm better at it.
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