Struggling to save 3-6 months salary - how did you do it?

[Lovinglife45]

I initially posted in Money Matters but thought I would get more responses in chat.

Despite having a decent household income (not high earners though), we have never been able to save 3 to 6 months salary. We save every month and transfer on pay day, however we dip into it to top up petrol and buy a food shop near pay day. We also help both parents who are struggling financially.

We have a monthly personal allowance of £120 each which covers clothes, socialising, hair and beauty. Not nearly enough!

I polish my own nails, dye my own hair, buy shaving kits, pluck my own eyebrows. I do not buy newspapers/magazines, food or drink on the go lunch at work. I rarely spend more than £30 on a pair of shoes or item of clothing. I buy non-leather shoes and only shop in sales.

Our dc attend one extra curriculum activity each.

We are constantly buying dc new clothes, shoes as they have growth spurts.

I use an Excel budget sheet and update monthly.

I stay awake most nights worrying about our lack of savings. I am also on anti-depressants for increased anxiety.

How long did it take you to save 3 to 6 months and how do you leave the savings untouched?

How much do you give to your parents?

We'd never been able to do it either, the money gets saved and then something breaks or needs buying. We have finally managed to do it thanks to the pandemic. We both worked throughout but obviously couldn't go anywhere to spend anything so we managed to save £4k. It's a bit miserable but it's what worked for us and it does feel great to have that buffer.

Also, if clothing is a big expense for you have a look at vinted. You can buy and sell on there. Very easy to use.

If you aren’t able to build a small savings buffer, you can’t afford to help your parents,

Sounds like you’re buying too many clothes and shoes

Well, the short answer is you either need to spend less or earn more.
The long answer is more complicated. Are you prepared to put a list of outgoings up here? People may be able to spot places you spend more than average.

Clothes, socializing, hair and beauty at 120 a month sounds like a lot. Socializing is the only thing on that list I would spend monthly.

Also keep quiet that you are trying to save, as someone will ask you to lend it to them, but they will have no intention of paying it back.

Put away slightly less each month but Save the savings away somewhere you can’t just dip in. It will take longer but will eventually happen

I use an investment app for that. Moneybox, but there are others like it. It would take a couple of weeks for me to withdraw the cash from it.

When I put aside money in an accessible
Account it of course comes out again because it’s not making me change my habits enough.

If you’re happy with/can’t change your outgoings, then you’re trying to save too much on a month.

As PP said - spend less or earn more, or save less and stop dipping in to let it build it up

I always found it hard to actually save, but I did find that I could pay off money owing. I decided to put that fact to good use - when I was in your position I borrowed the required amount of money from the bank as a personal loan. I put the money into a term deposit which couldn't be touched . I then paid the required payments back to the bank. Bingo ! I had six months money in my term deposit and it was pretty painless to pay it off.

Difficult to say without posting your income and outgoings.

With saving, make sure you always transfer on payday, preferably to an account that is more difficult to access. No buy months can be good, really go for it with no extra spending but ultimately, you can only save what you have left after outgoings.

I actually think it's quite rare to have a 3-6 months saving buffer. Most people probably have too little coming in & too much going out.

Put at least a chunk of the savings into an account where it would take time to withdraw them ?

We’ve never been able to do that, I know it’s advice bandied in money advice forums and no doubt great advice but it’s just not something most people are able to do. It’s not something we stress about though, lots of people can’t even afford their next meal so we consider ourselves lucky having what we do. Have you considered counselling or treatment for your anxiety?

If you’re dipping in to savings to pay for regular stuff like food and petrol then your budget is unrealistic.

I’m currently saving for a deposit and my biggest tip is to have separate “pots” and annual budgets. It helps with smoothing out expenses which fluctuate. So (for example) my yearly clothes / shoes budget is £600. Most of that is spent in April and September because the weather changes. My yearly car budget is £1000 - mostly spend at MoT time and when my insurance is due.

I don't think you're necessarily doing anything wrong...you just don't earn enough and everything is so expensive. I'm similar to you...rarely but myself clothes and shoes but my dc constantly seen to need new shoes, school uniform, sports kit etc etc. Theoretically we're doing ok but saving is hard

@starrynight21

I always found it hard to actually save, but I did find that I could pay off money owing. I decided to put that fact to good use - when I was in your position I borrowed the required amount of money from the bank as a personal loan. I put the money into a term deposit which couldn't be touched . I then paid the required payments back to the bank. Bingo ! I had six months money in my term deposit and it was pretty painless to pay it off.

I've found this out about myself too.

I am amazing at paying off debts, I budget and cut back to repay debts early. But can I save? Not a chance!

If you're dipping into your savings for food and petrol, you're either spending more than you think/need to, or your budget is unrealistic.

Have you accounted for the recent price rises? How much do you spend on these items? Obviously if you're spending say £200 pw on food, you have a lot more scope to cut back without going hungry than if you're spending £80 pw.

For fuel, do you need to do the journeys you do, or are you driving more than you need to? Is it possible to swap to a car that is cheaper to run?

Without further detail, it's impossible to say whether you have the income to save money or not. Only you can tell, but if you haven't reviewed the cost of bills, subscriptions etc, you might be able to cut down to free up money.

Have a look at Moneysaving Expert's budgeting advice and do everything that's relevant. You might be able to free up a few pounds here and there which will be available to save. Although it's difficult at the moment with prices of essentials rising so fast.

www.moneysavingexpert.com/banking/budget-planning/

Grazingsheep
We give parents at least £150 a month. Though there have been months where this has doubled.

The parents are adults. They are responsible for their own finances. Stop giving what you can't afford.

You can't afford to sub the parents unfortunately.

What position are your parents in?

If they're typical 70/80 somethings who own their homes outright with company pensions, they might not be struggling as much as they make out.

Lots of people that age complain about the cost of living, but what they really mean is that they don't get the interest on their savings that they used to do and things are a lot more expensive than in 1980. If they do have assets, is there scope to downsize or release equity?

Of course if their early 60s and can't work because of ill health and aren't yet eligible to draw a pension, and are still paying a mortgage or renting, that's an entirely different position, but they still shouldn't be relying on you, at the detriment of your own financial security.

Redo your budget but be more realistic regarding food and fuel.
I have a separate account for food and fuel, I put enough money for 5 weeks of food and fuel. If I overspend on food one week we know we need to be more careful the week after.

We do the following, we have about 8 months in easy access savings we do have more in an ISA for our house deposit but we can't touch that)

-Use the handheld scanners at the supermarket, it much easier to keep track of your costs as you go round, especially if you set yourself a budget before hand, if you see you're getting close to budget either take some things off or you at least know to go for cheaper options for the rest of the shop
-Use Oodies and hot water bottles instead of putting the heating on (ours hasn't been on all year, theres only been two occasions where we've been cold)
-Only buy clothes and shoes when needed and as they need replacing (for example I see people on here sometimes buying a new wardrobe every spring and winter....why? Use your clothes and shoes until they start falling apart then replace)
-Meal plan (its so much easier shopping and getting exactly what you need rather than grabbing a lot of different stuff that you may or may not eat)
-Free socialising (instead of going for dinner, meet a friend for a coffee in the park instead that sort of thing)
-Free or cheap alternatives for the kids (or look into annual passes for places, yes you pay upfront but then have a years worth of access)
-Check your bank statements, this sounds really dumb i know but ive had friends before who say they have no money yet when they check their bank they're paying for gym memberships/subscriptions/ect that they thought have either been cancelled or have auto renewed.

We also don't drink, don't smoke and haven't been on holiday for a couple of years (hoping to go somewhere this year) as we've been plunging everything into our house savings. We tend to save between £800-£1000 per month, both work full time, neither of earn the UK average of £31k (although collectively we do okay),

@ForcingSmiles do you have low housing costs?

Stop giving your parents money - you cannot afford it. You are also struggling financially - with no one to bail you out.