Savings

[UnaCorda]

It seems that very few people have a financial cushion of any sort and I'm curious as to why this is. I understand that some people are on a low/minimum wage or perhaps have unexpected outgoings, but there must be a lot of people to whom this doesn't apply.

Is it simply a matter of priorities? Is the cost of living simply too high to allow most people to save? Or do most people just spend most of their salary every month, regardless of any pay rise?

Or am I wrong and most middle-income or high earners do have a decent amount put away for the proverbial rainy day?

Disclaimer: I'm not asking this from the position of having a six-figure salary (or even a particularly high five-figure one) or a high-earning husband or a trust fund, etc.

Also, obviously people's financial situation could be completely different at the moment, so I suppose I'm referring to a pre-Covid situation.

I think a lot of people just don't think they will ever need them, just in the same way people don't think anything bad will happen to them, only to other people. We have 2 savings accounts, one for using on the house/car etc and one we don't touch, it has 6 months of dhs wages in. In some ways we are lucky he earns enough for us to have saved that and in some ways it has taken a lot of careful planning and being frugal in other ways. As soon as work on our house is finally done, that money will go to overpaying the mortgage.

I know I need savings but how do you actually expect people to save on min wage?

I am a saver but my hubby is a spender. It’s caused problems ever since I had DC 1 and became reliant on him for money.
When I got back to work I opened a bank account in my name only and had my wage put in there ; )

Its not about other people "expecting" you to save Mydogisthebestest and that's why you haven't done it.

Of course it's not easy but it's all relative. Saving "something" is better than nothing, so think about what your spending (if you really want to save). For example, if I had no savings at all, I would never buy a takeaway coffee or anything to wear or go on an evening out until I had a small emergency fund. Some peope will think that's too big a sacrifice and that's their choice, but it's also why they don't have savings.

@UltimateWednesday

Its not about other people "expecting" you to save Mydogisthebestest and that's why you haven't done it.

Of course it's not easy but it's all relative. Saving "something" is better than nothing, so think about what your spending (if you really want to save). For example, if I had no savings at all, I would never buy a takeaway coffee or anything to wear or go on an evening out until I had a small emergency fund. Some peope will think that's too big a sacrifice and that's their choice, but it's also why they don't have savings.

I never buy a take away coffee.

I ordered a bra this week for the first time in over a year. Other than pants and socks that’s the first thing I’ve bought myself since Christmas when I spent £14 on a going out dress. I have not been on a night out since that work night at Christmas, except to friends houses.

£4000 a month seems a heck of a lot to me.

I bring home about £1’600 (I work part time, 25 hours) and my husband brings home about £2,400 (he works full time).

It’s all relative I guess - I imagine to some people on here that a monthly bring home pay of £4’000 is actually quite low

My sister and BIL earn around £110-£120k combined, they have a few hundred pounds in savings and neither of them has a pension. Their mortgage is around £800 a month. I don't get it.

@UltimateWednesday the reason some people on minimum wage can't afford to save is because they have literally nothing after their outgoings. Those people aren't buying takeaway coffees and going on nights out, some of them can't even afford to put the heating on in winter.

I don't earn much more than minimum wage but I'm fortunate to live in a cheap area of the country and I get a lot of child maintenance from my ex, so I can afford to save some. But I know that someone else in my situation might not be able to afford to and it's not because they're buying takeaway coffee.

This idea that some people are able to save because they "prioritise" is silly.

What do they spend £8k a month on ?

canistillcallitbabyweight

[quote Waxonwaxoff0]@UltimateWednesday the reason some people on minimum wage can't afford to save is because they have literally nothing after their outgoings. Those people aren't buying takeaway coffees and going on nights out, some of them can't even afford to put the heating on in winter.

I don't earn much more than minimum wage but I'm fortunate to live in a cheap area of the country and I get a lot of child maintenance from my ex, so I can afford to save some. But I know that someone else in my situation might not be able to afford to and it's not because they're buying takeaway coffee.

This idea that some people are able to save because they "prioritise" is silly.[/quote]
Thank you.

It wasn’t a matter of prioritising - I had no money for luxuries or extras at all. I am aiming to have £1000 saved for dd to go to uni. I did the same for the other two. I don’t eat out. I don’t have take away bloody coffee. I have three kids, two I still support, on min wage. Take. Away coffee is a luxury I cannot afford.

I’ve got about a year's worth of ‘cushion‘ if I’m frugal. Just as well as I may need it soon.
If DH lost his job we’d have about 6 months.

I am able to save 900 a month currently with savings of petrol and the reduction of meals out etc. I am fortunate as my partner pays half the bills, if not then as a single mum every penny would be accounted for...I then maybe would be able to save 100 a month.

I know of course it's not easy but it really is a case of look after the pennies. And maybe (I know you're not allowed to say it) even prioritizing an emergency pot before you have DC. There must have been times in your life when you could have saved something, if you'd wanted to, but you chose other priorities. Which is fine, if it suits you.

I've had times when I haven't been able to add to the pot and I've had times when I've had to spend some of it.

@UltimateWednesday

I know of course it's not easy but it really is a case of look after the pennies. And maybe (I know you're not allowed to say it) even prioritizing an emergency pot before you have DC. There must have been times in your life when you could have saved something, if you'd wanted to, but you chose other priorities. Which is fine, if it suits you.

Yeah. Left in the middle of the night with fuck all.

Shoulda prioritised an emergency pot.

Ffs.

I think yabu and either very naive or goady.

My initial response is that either:
A: People are earning enough to save but are enjoying their income out of choice or just not money savvy.
B: People dont earn enough to save even if they wanted to

Those who dont earn enough cant do much about it, those who do could if they really wanted to.

@HowLongCanICallitBabyWeight

My sister and BIL earn around £110-£120k combined, they have a few hundred pounds in savings and neither of them has a pension. Their mortgage is around £800 a month. I don't get it.

That’s just financial illiteracy, no excuse for it.

I’ve seen loads of my friends been absolutely screwed financially by the lockdown .
All of them were high earners in various jobs or self employed but none had any savings at all Most had a few k on the credit card .
A few have had to get UC to pay rent and get money it’s been a massive shock to all of them how little UC is .
All the ones that owned their own homes have have to do the mortgage break and will probably need to do it again.
None of them had any savings at all not even enough to pay the rent for a month without going into debt on credit card
I do find it difficult to chat to them atm as I got the self employed money and a big refund back from a holiday so I haven’t really been affected financially by the lockdown plus I have a decent amount of savings and no mortgage to pay and DH carried on working as well
But being self employed both of us have always kept a large amount of money back just in case as I’d we don’t work we don’t earn

My grandad once told me - don’t save what you don’t spend, spend what you don’t save.
We treat savings as a bill so on payday- standing order takes X amount straight into our savings accounts.
I’ve found this the easiest way to do it.
Then what’s left over at the end of that week gets moved over into a little online “easysaver” account. Online banking makes it much easier in my opinion.

Shrug

Adult life is expensive.

I have savings. And they are at the "unexpected car repair" or "new boiler required" level, but not loads more. I usually manage to save about £300 a month, and that's living frugally. I don't have extravagant tastes, but I like to have money available for weekends away and the like.

I get paid weekly, so when that money comes in, I round the amount in my current account down to the nearest 100, and put the excess into my savings account.

In younger life I was a spender and then I bought my first home, ending up buying the ex up and borrowed even more to sort out that mess.

I had to grow up and pay that back, everything from asking for a pay rise, getting a lodger and the make £10 a day challenge on MSE - Swagbucks, pigsback, Quidco, free bingo etc, eventually managed to pay off the non mortgage debt by the time I got serious and moved in with DH.

The saving continued and despite him earning a good salary and mine being quite good we live very frugally but don’t have a mortgage, have moved into a lovely home and have a lot in the bank.

For anyone saying that they can’t save. I have an account in it where I put unearned income, anything sold, won through free completions, survey money, copper jar etc and it does add up slowly. There are ways of making a little extra here and there.

Saving can be quite addictive so I would encourage anyone who isn’t saving to look at opening a new account using one of the get £xxx free when you open a new account and look at MSE and the money matters thread on here for making money and generally be a bit creative with how you make a bit extra and also to review your bills and haggle with mobile phones and sky when out of contract. Shop around for electric and gas and use cashback when you can.

Why does takeaway coffee always get sniffed at as some horrific indulgence? Costa as one example employs about 18,000 people, and offers hours of work outside the 9-5 for those who need them, such as students. There are thousands of independent cafés which offer somewhere to shelter from the rain, meet a friend when you're 6 weeks postpartum and feeling a bit wobbly, or to work when you need to get out of the house. Would we rather they didn't exist?

Of course, ideally you should have savings - we do, though I am the first to admit that 60% of it is inheritance. However, I don't agree that you should never allow yourself coffee and cake or a new jumper just because you like it unless you have them. It is very hard to save unless you budget yourself an amount to spend freely in your outgoings.

I agree with what im5050 posted.

Being self employed, we were always aware of the position we were in and also created a buffer in case our business hit hard times. It has paid off. Hopefully many will learn that bad times do happen as again many will find that they havent factored this in and now are struggling.

I hope many find their feet again.

Why does takeaway coffee always get sniffed at as some horrific indulgence?

Someone said nobody ever got rich by skipping coffee. True.

But some take that to the extreme. My boss always came into the office with a take-away coffee and breakfast roll. £5 I reckon. Then lunch was take-away too, say another £5. Add in an afternoon coffee £2. That's £12 a day, 5 days a week, say 45 weeks a year. That's £2.7k. He can afford it so why not. But if I had the option I'd rather save say £2k of that and have an occasional coffee.

If you can give me any pointers how I can save money whilst relying on carers allowance (£67/week) plus a few hours in a NMW job when my severely disabled DD is in school, I would be most grateful. Or how to find affordable wrap around childcare for a disabled teen so I can try to return to my pre child well paid job I was forced to give up. You seem to know something I don't about earning money and saving.