Balance between saving money and making the most out of living in a big city - AIBU to ask for your help?

[TherapieTaxi]

Hi all,

Could I ask for your advice please?

In my mid-twenties and moved to London to start full-time work a couple of years ago (before then, I lived with family and worked from home).

Since starting full-time work, I’ve really focussed on saving as much as I can. I started to become a bit miserable though as I wanted to make the most out of living in my city (big city with lots going on). Also, rent and commuting is really expensive, although I’ve tried to find cheaper places to rent.

Any advice about the balance between making the most out of life now and saving for the future? Currently single and no dependents. I save into a work pension and also pay into a lifetime ISA, but would like a family eventually.

What's your goal? Is it to get on the property market? Save for early retirement? Save to leave the city? You have a pension so keep paying into that, have a cash buffer 6x months salary but anything more, needs to be reinvested.

Hi CookieDough - thanks for your post.

My goal is to save for a comfortable retirement (hopefully from early 60s rather than from 68 or older, as the current predictions show!)

I feel like I’ve become so worried about not being able to have a comfortable retirement (where I have the freedom to not worry about money) that I’ve focussed a lot on saving for that and haven’t prioritised enjoying myself now.

I’ve read so much about pensions not giving people enough to live on when they’re retired (work pensions rather than the State Pension) which has really worried me.

I’ve also focused within the last month or so on starting to build a buffer of at least 3 months’ expenditure in case of redundancy or an unexpected emergency happening. I’ll be adding to that over the next couple of years.

I’m really confused about how to make the most out of now and how to save enough for the future.

London has so much free stuff to do????

Make time and make the effort to find something new (and free) to do every weekend.

So long as you have a travel card (or equivalent) your out of hours transport is fully covered. As noted above London has years worth of free stuff to do.

When I moved here I joined meetup groups for cheap/ free entertainment and to make sure I got to see lots of places in case I moved away again. I think groups aimed at younger people may be on other social media type sites.

Honestly? Try to live a little bit more. I’m about 20 years older than you, and not everyone is lucky enough to live until retirement. I was ultra-cautious with money in my twenties and now do regret not taking advantage of living in some great cities. There are lots of free things to do and last-minute tickets to be had, esp if you’re on your own. It doesn’t have to be late nights in expensive cocktail bars and Michelin-star restaurants.

Thanks Crunchy and jay - that’s really helpful! :) I always knew there was free stuff out there but I’ve had a bit of bad patch the last few months and haven’t done very much. I do want to do much more over the next few months and make the most out of the free things in and around London :)

Such a good point Norm, and very true - thank you.

I think you’ve hit the nail on the head there, Norm - I’ve become very cautious with money. I think that can be a positive but it’s also something that can prevent me from enjoying new experiences.

My parents are and have been extremely frugal with money, which is where I learned that attitude, I think. They now have built a very, very large amount of savings but never use it - it’s sad to see, but as long as that’s what they want and they’re happy with. I realise it’s totally up to them.

Norm, if you don’t mind me asking, what’s helped you to change your attitude to money?

Thanks again for your posts and suggestions, everyone :)

Not sure if this would work for you depending on your bills I know how expensive London can be! But before I had children and was working full time I tried to follow the 50/20/30 rule. Basically 50% of your salary goes on your needs e.g. rent and bills, 20% into savings and 30% into your wants so holidays/socialising etc.
You could even swap the 20/30 around if you feel you need to save more.
It worked well for me when me and DH when we were saving for a house.

Thanks username - great idea! I’ve looked into that before and really agree with it.

At the moment, my rent, commuting and food are my biggest ‘needs’ outgoings.

Rent is £680, commuting is £135 and food is £120. Any advice on cutting back on my food bill? (Worth mentioning that I don’t always spend this on food every month - I’ve just budgeted for it).

Sites like londonist.com and secretldn.com are great for finding free / cheap things to do.

I think your food budget sounds pretty low already! Most of the big coffee chains offer a discount on takeaway coffee now if you take your own cup, I don’t know if that helps.

If you live in London, you probably aren't too far away from an Indian/Caribbean/Polish supermarket. You can often buy store cupboard foods cheaper than elsewhere.

Instead of spending your free time in Central London, try going out of London eg in zones 3-5 for example, you won't be paying London prices to eat out or visit attractions.

Get a 'free things to do in London' type book. If you are paying for a monthly travel card, it won't you much to get around.

Thanks Empress(es) :)

How far out do you live? Pre- DD I cycled to work (6 miles each way to central London). It’s actually pretty straight forward and generally similar time to taking public transport. Worth thinking about - good exercise and saves £££

If you're already paying for a monthly travel card, can you buy an annual one? It's cheaper than 12 X monthly and you get a Gold Card which works like a network railcard for you plus one (maybe two) other travelling with you. Then you can also use the two for one days out vouchers with your rail tickets.

That's on top of all of the free stuff in London - I second londonist, the nudge, timeout and Secret London for free stuff. Plus meetup and Eventbrite

OP, it’s been a combination of things. I met my now-husband, who has always been a bit more —careless— carefree with money and we balance each other out. My parents also very frugal. I wouldn’t say they’ve “lived”, and that makes me very sad.

As you get older and get a mortgage, pension etc you feel the weight of it. You lose freedom and regret not enjoying that.

But most profoundly has been experiencing other peoples’ illness and deaths, sometimes out of the blue, at relatively young ages. In recent years I’ve known a few men on the cusp of retirement die. You need to LIVE now, don’t wait.

Thanks Empress(es)

On the subject of Gold Cards, some workplaces offer a loan for them & then take the repayments out of your salary, which means you don’t have to find the lump sum but you’re still paying less every month. Mine does. It might be worth finding out?

Join up to somewhere like Central Tickets, a great website that offers late deals and promotions on theatre tickets and musical events in London & other areas too. You can book things a week or two ahead and they also offer last minute stuff where they have return tickets. I have seen some great plays and seen some good shows/singers for less than £10, often less. Big venues like The Royal Albert Hall to small clubs and theatres. One of the best things I’ve ever signed up to, I’m still getting good deals years later. (Can’t remember exactly when I joined, think 2/3 years ago)

I can understand that you want to save for the future but as others have said you need to enjoy life now too. The good thing about living in London is that there are lots of free museums, art galleries, exhibitions etc.

You might also want to consider mini breaks to some other places? I’ve had some fantastic (cheap) trips by using EasyJet or Ryan Air (I know, bad reputation) but can honestly say I’ve seen some great cities for the weekend, booking a cheap b&b & the whole break only came to about £200. You can eat cheaply too in most places if you have the lunch menu. I’ve eaten in Spain and Portugal for 8-10 euros for 3 courses, wine&coffee.

Although I was born in the 50’s I still have to wait until I’m 66 for my pension, that’s 50 years NI contributions by time I get there, so it’s not just you youngsters having to wait forever!

My parents also taught me to be frugal with money, so I guess it has rubbed off onto my children too. We hardly ever pay the full price for anything. I wait for the sales or go to places like Bicester shopping village, even charity shops, where I’ve picked up designer handbags for a fraction of the price.

Op, some great ideas on here.

I don't know if you have considered it, but volunteering at a food bank for example is a good way to meet people and build up a social life and find out about local events that might be free or low cost.