If people actually save 20% of their income ?

[Designerenvy]

Just that really !
I read that it's recommended to save 20% on your income ( after tax)
Not sure I could ever manage that with 3 Dc's.
Does anyone manage it and if so....any tip to help me manage it !
Need to clear debts and save ..... TIA

We technically save 23% of our monthly salaries but they're not savings in the true sense of the word, it's savings for short term things like holidays, Christmas etc. We really need to sort some long term savings but I think I'm going to prioritise over paying the mortgage as it seems pointless putting too much aside while battling a mortgage! We have things like critical illness and income protection as a sort of back up but I do worry if something went wrong.

(That's not including mortgage over payments or pension).

Its all about life stages, when we had ds there was no way we could save, but we made sure we didn't get into significant debt and any spare each month went into mortgage overpayments, even if it was only £50/month. We didn't holiday or replace car etc unless it was well within our means.

Now (we are old) mortgage is paid off, ds is 14 we save a good chunk each month towards either ds uni/house deposit/driving lessons or our retirement.

Theres a blog called fun cheap or free thats been so helpful to me.

funcheaporfree.com

The lady who runs it has a youtube channel and there's so much information on it about how to clear debts, and generally keep better track of your spending.

It's all quite American but the concepts are defiantly translatable. Little things like how to budget etc.

When I worked I saved at least 20% but I'm complete tight arse and other than mortgage don't really have any debts. The blog/youtube channel helps you prioritise debts vs savings etc.

Hopefully I have gotten my math right, but if you are on minimum wage that is close to £200 a month.

We would be laughing if we had that spare a month

Yes I do, and always have. That said, I imagine it's much much easier to do so from the beginning rather than trying to start when you're in a position where it's tricky to change many things about your lifestyle.

I think having a strong reason for saving really helps. When I was single, the main incentive behind the high savings rate was a love of travel. This meant living in houseshares from where I could walk to work, taking packed lunches every day and shopping in Aldi. Now I'm married, our priorities are being able to afford to live comfortably on a single salary as we hope to have children in the near future. This has meant we've bought the cheapest 3 bedroom house we could that was still within walking distance to work rather than the much more expensive house we could "afford". We intend to stay put in the house long-term and not move up the ladder. Currently, we are able to save an entire salary (my husband and I earn almost exactly the same amount of money, post-tax/pensions). We intend to take a full year maternity/shared parental leave between us and are not sure if one of us will be a stay at home parent (most likely to be my husband) or not, but this set up will allow us the flexibility to decide based on what's best for our family and not on what we have to do because of finances. We've also prioritised pensions, I'm NHS so have a decent pension and my husband pays 13% + 3% employer contribution into his pension.

We are both on good salaries (a little over £40k each) and live in a pricey town in the South East. If we'd taken out the mortgage we were offered by our lender there's absolutely no way we could afford to save anything close to what we currently are!

I don't think a lot of people can save 20%. Mumsnet tends to have middle and higher earning pp.

However, most pp except those living in poverty, on nmw or UC can save something, even a few pounds adds up.

Shopping around at every renewal, not paying for tv and subscriptions and being clever with a food budget, all add up.

I live on a small budget as do many of my friends but we all go away on days out or holidays, as we save when we can, even pennies.

But on a low income, it does not tend to be long term savings, it's small amounts that get used as and when needed. But at least it's better than not saving at all or getting into further debt when an appliance breaks or car needs repairing.

We have a good income but spend too much, in fact I am horrified at what we deem as a need in the last few years. It’s irresponsible and every time we have an increase, we spend up to it.

It's pretty difficult to save early in life

Depends on how you live. If you just have to have a decent car, a house bigger than you need, foreign holidays, latest gadgets, etc., then of course it's going to be difficult.

We saved half the price of our first home, £50k between us, by carrying on living at home for a few years, buying old cars, limiting holidays to "last minute" cheapies, not falling for the hype to buy gadgets, and only eating out in restaurants on special occasions, etc. Yes, we started saving a lot more once we were qualified in our fields, but we still managed to save something when we were both on starter/trainee wages. I saved a quarter of my first wage packet of £32 (equivalent to national insurance threshold today of around £160).

We spent pretty much all of our savings last year on moving. We have a £4K dire emergency pot that is always untouched.
I need to get £10k together for Mat leave, managed to get about a third so far excl the dire emergency fund.
There is no chance of us saving 20% for the next few years though as will have childcare costs.
Hopefully we will though further ahead. I have final salary local government pension though and a BTL so asset wise ok, just short term cash poor!

I think a lot of people with young families are in that position. I try not to stress about it.

We save £1K a month.
But we live well within four means. Our mortgage is currently £450ish for a newish build 3 bed semi.
As I'm pregnant with no 3 we know we want to move in around 3 years so we're trying to save as much as possible.

We cut all unnecessary bills, we lowered how often we got take away, we split our shop between Aldi & Farm food instead of just Tesco and we paid off one of the cars.

I save 17% of my take home pay (more into pension). I have done since my child was born to give us a buffer. 20% of that is locked away for her aged 18, the rest is easily accessible. It feels a small amount when I look at my savings account though. I hope to get a year's take home saved, so that should the worst happen we have time to adjust. I'm half way there

But I'm a high earner. It is a lot easier for me to save this much now than a decade ago when 50% of my income went on mortgage/ rent and the rest on other essential bills.

My mortgage now costs the same, but is only 20% of my income. A big difference.

I think as someone pointed out, this is an old fashioned / American middle class idea. Seem to recall, 1/3 bills and rent, 1/3 spend and 1/3 save. But we live differently now, here and there.

A lot of middle aged Brits will have an occupational pension, own their own home and a small savings reserve. These have been the conventional routes to plan for wealth acquisition and security in the uk. Americans traditionally rented or relocated to cheaper states to retire. But things have changed, in the US and especially here.

I’m not sure what the best advice would be to millennials and younger. Certainly yes to building a pension from first day of working and keeping it going as much as possible. I don’t know if they will secure much benefit from house price increases that would allow for downsizing later in life. Plus consumerism is way beyond anything experienced in 70s or 80s.

Unfortunately I can't at this stage of life (single parent, 3dc) but I think it's a great goal. My biggest goal is to have a decent emergency fund so that changes in situation don't sink us. Experts recommend 3 months to 6 months depending if you have 2 income earners (and therefore unlikely to have both lose your wage at the same time) or 1 (when they recommend 6 months). I feel like once I have 6 months emergency fund together then I will feel like I'm doing well and can begin to save long term.

I feel stressed about money a lot despite always being hard working, not needing a lot myself and trying to not ever get carried away with trends. I think I have the skills to focus on savings but not the income to make it easier. Whereas lots of people have the income, but spend a lot of luxuries.

About 10 years ago I had a 20% cut in my salary due to the recession. I am only now back to what I was on prior to the cuts. While I was always a decent saver this really put it in perspective and now I do save 20% every month just in case something like that happens again and I will have back-up.

Depends what you mean by saving. We put about 15% each month away into savings account, but a lot of that is saved for less than a year for birthdays, Christmas, holidays, etc.

We probably save about 10% longer term, not including pensions.

DH and I were both brought up with an expectation of saving some of our pocket money, Saturday job money, etc and have saved our whole working lives. It would probably be harder to suddenly start saving if you weren't used to it (similarly with charitable giving).

Kazzyhoward, it also depends on how much support you get, if you could find part time work around studying or get a full time job at 16 etc.

I know of kids who have to help the family out with their paper round money.

I can't help my DD out with driving lessons, so she's paying £27 an hour. She has LDs so it will take her longer, as has studying.

We don't all start off the same.

We do have quite a bit of disposable income but only because we paid off the mortgage and don't have any debts. Part of that was that both my husband and I never got into any sort of HP or loans (massive interest is just money down the drain) and whenever we got any bonuses or anything we paid it into our mortgages. Then when we got together we sold my house and put it into getting his totally sorted (new roof/windows etc) so that we wouldn't have any surprising outlays for a while.

Not saving anything.

Thanks to our poor incomes, living in a high rent area and hobbies (mine I really can't give up despite what anyone thinks), we can't afford to save. It sucks because thanks to the company we work for paying us severely below average for the UK (and less than lower renting areas), we basically have to choose between saving and enjoying life. If we want to save, we can't enjoy life. If we want to enjoy life, we can't save. I picked enjoy life rather than sit and be miserable with nothing to do.

But I am looking for other work too, and looking at moving to a lower priced rent area too. And my partner is possibly getting a new job soon that pays better. So hopefully this year we can get higher salaries and start saving.

When I was in debt, I always paid that debt down first every month. When that debt was paid off, I continued to pay it, but into an ISA. I’ve only recently heard of the “pay yourself first” thing, but thats what I do. 16% goes into that ISA which is a long-term saving thing. And £150 each month goes into an “emergency/big bill account” which is mostly there for insuring, MOTing and repairing my elderly car. I’m dipping into it this month to pay my share of the balance of our Easter holiday, which wasn’t part of the plan, but I figured it’s better than sticking it on credit card.

Saving is definitely our financial priority this year as we have wiped put our savings paying off debt (home improvements) and our only remaining debt is our mortgage.

We aren't high earners by any means but we live pretty frugally, always get the best deal on insurance, budget, meal plan etc. Keeping a note of of EVERYTHING you spend is an eye opener. Apps like YNAB or GoodBudget are helpful for keeping track and making a conscious decision before you spend anything.

Our aim this year is to keep spending down and put everything left over each month into a stocks & shares ISA. We're also planning on increasing our pension contributions so overall we'll be saving at leat 20% of income hopefully.

But it's taken years of living frugally, cutting back, paying off debt to get to this point, it's not easy. A few years ago we suddenly had drastically less income and we managed.

Currently 2 and a half per cent a month, (which if spent equates to enough to buy a couple of lattes and cake). But my circumstances are about to change and I will probably be just breaking even every month.

Pinknsparkly

Why does your husband have a private pension? If nhs he'd get 14.38% employer contributions on top of his 9.5% contributions (the 12.5% employee contributions kicks in when earning over £47,846. If just over 40k salary he'd only pay 9.5%) . Got to be a better deal than a private one. Even accepting the government will keep changing things!

Downside is lack of portability if employed out of nhs in future, granted. And the lack of a "pot" that you could withdraw

I don't. I have a workplace pension and I save £125 a month into an ISA plus £20 a month into a children's ISA for DS.

I'm a single parent and I literally cannot afford to save more than that.

Most people aren’t going to be in the position to save 20% of their income even without debts. I think outside the middle class mumsnet bubble most people with children are going to be barely breaking even let alone having that sort of money to save. I have no debts other than my mortgage and I put 13% into a pension and then save another 5% so I’m close to 20% if you include pension as savings but I couldn’t manage anymore and we’re relatively well off compared to some of my peers. I.e. low mortgage cost, only one set of childcare costs, no debts