To wonder if I’m being too frugal?

[utterlybutterly8]

DH and I had an extravagant year in 2018 and spent about £6k beyond our means on a holiday, weekends away and various other treats. The £6k came from our own personal savings, so we were fortunate in that we didn’t take out any loans or credit cards.

This year I really want to boost our savings pot and am determined to pay the money we spent back into our savings account. We’ve paid back just over £2k so far (£450 per month).

We’re both self-employed, neither of us are high earners and paying this much into our savings each month means we have about £40-£50 each per week to spend on “fun” after everything else (except about £10-£15 each on travel fares) is paid. It’s obviously a reasonable amount but not huge - and it rules out holidays, makes it difficult to buy new clothes when old ones wear out and so on.

If we continue on this financial regime we will have paid back all the money we spent last year into our savings account by February, at which point we will obviously have a combined £450 extra spending money a month - a great amount.

However, DH is fed up with my strictness over this and says we should reduce the monthly payments and take twice as long to pay ourselves back - if not longer, as he thinks life is too short. Whereas my view is that I’d rather have eight months of relative frugality, forego a holiday and treats this year and clear the debt (to ourselves!) quicker.

AIBU to tell DH that I would really like to stick with the plan? We currently have £8k in savings and want to use the money to make improvements to our house.

I'm with you op but I'd also re arrange how you spend.

You should split that 450 pm into different savings for different things. Then you will have money for clothes, and fun etc but.... It may take longer to replenish the original expenditure.

Not the question you asked, but with only £8,000 in savings (2 months of living expenses), £50-60 meals out once a week sound pretty extravagant to me.

Wow - and no pension??

I think your DH needs to put numbers to his lifetime expenses. He is borrowing against his future, forget living beyond current means.

Are you saving for something? Other than vague bullshit about 'your old age'? If not, FFS enjoy being alive now. Saving for the sake of saving is a miserable and pointless way to live. Unless you are both high earners, saving at all is pointless at present unless/until there is a radical restructuring of the economy.

£40-£50 per week to spend on "fun" seems an enormous amount of money to me! Surely there are things that you like doing or could try doing which don't involve spending money or, at least, not as much money as that. I think your DH is equating "fun" with spending money and that's the problem.

Why didn’t you put the profit from the house sale into your new house, reduce your repayments and be better off each month as a result?

£40-£50 each per week to spend on “fun” after everything else (except about £10-£15 each on travel fares) but surely that would only leave £25-40 a week?

It sounds like you're the one who's good with money, and your plan makes sense. Could you both agree to compromise by continuing with the plan but taking a one-month 'holiday' from it during August so you can have a bit of summer fun?

How does your plan cover paying for Christmas presents, btw?

Take a small amount from each weeks £ allocation and go camping for a few nights this summer, budgeting for a day out and meal out on your break as well. Will make the world of difference!

On MSE, they have a form to help you sort out your budget. It's called a Statement of Affairs, or SOA. It's mainly used by people in debt, to see how much they're spending, and on what, but it's a good tool to budget, even if you're not in debt. It does allow savings for Christmas and birthday presents, hair cuts, clothes, car maintenance, etc, and "fun" money. You should have a look at it.

I think you should be splitting your savings up, so that you're putting money away for each of those things, as well as general savings. However, £200 a month, is plenty for buying new clothes when needed, and you can still afford to go out, just not spending £60 twice a week on meals out. It's important to do something enjoyable, fairly regularly, as it makes life worth living, and you never know what's around the corner, so you should have fun while you can. You just need to be sensible about it.

Holidays don't have to be expensive either. My husband and I, have 2, week long holidays each year, a week in May and another in September. We rent a flat on the coast (UK), and as we go before/after the high season, it costs around £350-£400 a week (minus spending money). You should be able to afford that even on your reduced disposable money.

You really need to sort out pensions though, because there's no guarantee that there will be a state pension when you retire, so you may not be able to retire at all.

You've had plenty of advice about coming to a compromise, so I won't repeat it. You would be unreasonable to insist your husband continues this level of saving, when you can compromise, and still be saving money.

200 £ each a month for fun pays for a cheap frills holiday...
. I've done it many many times before when I ve been skint as I've prioritised having some fun too.

SGB
Saving is pointless and miserable ?
Funnily enough it isnt.
Having no debt and 6 months expenses easily accessible doesnt make me miserable at all.
Its not like they have a £0 fun budget.
£50 is fairly good.

Why didn’t you put the profit from the house sale into your new house, reduce your repayments and be better off each month as a result?

We did our most of the profit into the new house, but kept some back to make some much needed home improvements. That’s why I feel guilty that we frittered part of it away on treats.

Not the question you asked, but with only £8,000 in savings (2 months of living expenses), £50-60 meals out once a week sound pretty extravagant to me.

Oh dear - really? How much would you consider to be a “good” amount of savings?

NO pension provision! and both self employed and £8k is only 2 months’ salary.

Saving should be a high priority, and it’d be unwise to spend the £8k on your home.

Ideally you should have 6 months living expenses especially as you are both self employed. Think how long it might take you to sort things out if one of you couldn’t work or the business stopped being viable. It buys you time to recover or work out your options.

I’d stick it all in the house now and overpay the mortgage by £4K a year.

What’s your food budget like? If that is quite frugal, I can see why your DH would be struggling with spends. If it’s too tight, you’re less likely to be saving in a sustainable way and you need to start saving for pensions really.

Personally, I’d probably try and do the following

£100 extra spends so you can go out for a meal each month and have a bit more wriggle room.
£250 pension (and ideally upping this over time)
£100 repaying your savings or mortgage overpayments.

Your pension situation is

Your pension situation is a big risk and if you really have nothing you are putting yourself in a precarious situation in later life.

I think you need to work out a budget together. We’ve used Martin Lewis’s Money Saving Expert budget planner which can be downloaded and includes pretty much every household expense. Then, you need to think about what you should aim for in savings. As you are both self-employed, the general rule of thumb is to try to have 6 months’ income put aside. Also, how much are your house improvements going to cost? You will need to budget for this. Also, it seems daft to rely solely on the state pension, unless you have assets which you hope to realise in retirement such as other properties, but in any case it makes sense to reduce your tax bill and pay into a personal pension. I think if you do this, you will both really know how much money you have to spend on fun stuff. Good luck!

Six months worth of salary... so that means we need to save another £16k plus extra for home improvements! A huge amount!

Ok with a bit more detail it does sound like you’re not in as secure a position as I was thinking.

You probably should have spent half as much last year, and half this year. That would have made more sense. You could have recouped that more easily without feeling deprived.

You really ideally should have at least 6 months living expenses covered. And you need to sort out a pension too.

Saving for the future and old age is not ‘vague bullshit’. It’s important! But it is possible to find a balance and live well now whilst also being sensible with your money.

There are plenty of fun things that you can do that don’t cost £50 a night. Maybe your husband should try to broaden his horizons beyond meals out and the pub.

You are mad to have no pension.

I think a compromise is best here. Agree on a halfway point.

While I agree with this
Yes it’s good to have a savings buffer but the amount and timing seems to have been plucked out of the air. You are essentially paying yourselves back so why suffer in the process?
I would hardly say that £50/week each fun money is suffering. You mention that you can't replace worn out clothes for example. Really you easily can for that amount, and anyway how often are your clothes wearing out. No one "wears through" £50 of clothes per week.

You're going to think this is nuts, but have you considered gamifying saving rather than grinding through it?

You start by agreeing a reward eg a new gadget/ weekend away/ dinner out etc.

You each have to save twice the cost of it, when you've got that amount saved you buy the reward and sweep the remaining money into your savings or pension accounts. You can be competitive about who gets there first if your DH is that kind of person.

It kind of forces you to save the money to buy things you want but changes your splurge/savings ratio so you spend 25% and save 75%.

It'll make the eight months go faster because there's still stuff to look forward to.

I know you borrowed from your savings account to do nice stuff last year but you couldn't really afford it if it left you uncovered for self-employment emergencies.

Isn't it strange how having the money to pay for something isn't the same as being able to afford it?

DH and I are self employed, we do have at least six months in savings and have needed it more than once!
To those saying pay your mortgage down, it depends on whether your mortgage is your biggest expense or not, if other expenses add up to more it's safer to have savings due to the flexibility.
OP, I think you need to go and see a financial advisor to talk about pensions or regular savings like ISAs.
Eating out is an expensive habit, I'd swap to M&S meal deals or breakfast out at the weekend instead.

I haven’t bought any new clothes for years and also have quite a minimal wardrobe - so some items have become worn and need replacing.

That’s an interesting concept youmean. It could make saving a more palatable concept to DH.

I actually quite enjoy the delayed gratification of working hard, saving up for something that you want and then enjoying it. But DH is more a carpe diem kind of guy.