1 year No Saving but I have responsibilities ?!

[Peachh]

I will be 30 in 2 years, I have a 7 year old and I am SP.
I want to buy a house but in London it’s very hard obviously and I only have £10k saved. Am I being irresponsible and delusional to want to have 1 year of no saving, just spending freely, buying whatever, going on holidays and treating DC. I have £5k in debt, tone of Student loans which I will be paying back for forever but now earn good money.

Convince me not to (I have some what already started as we went on holiday for the first time since the pandemic and I spent like there was no limit).

Yes I think this is partly why I have this attitude. Started my professional career on 18k so it has been a massive jump. But it does not justify my need to go all out.

But surely you’ve been living that life right now? You only have net 5k in savings and have been earning like 90k for the past 2 years and your fixed outgoings are only 1.6k.

To be frank a 7 year old isntgoingvto get much out of 2 x longhaul holidays, you'd be lucky if they can remember them in a few years.

How about a middle ground, pay off 5k debt. Do shorthaul, start saving.

Exactly, the OP says she's bored of saving, but she hasn't really been doing any?

On a £90k salary, tax and NI will be c. £30k. After fixed outgoings of c.£20k (£1.6k per month), the OP has approx. £40k of disposable income a year, £3k per month. And yet she's got £5k of debt, a £1k slush fund, and only £10k savings.

OP - you are already living the high life. You have no financial security if you lose your job, as £1k accessible savings is nothing! If you were to put a third of your disposable income in savings you'd have more saved than you do right now, and you'd still have £2k spare each month.

I also finding very telling that you are comparing yourself to people in a hugely different financial situation and effectively saying "Well they spend freely, so why can't I?"

It's a very childish way to approach things - your mindset really needs to change. You have plenty of money to both live well and save, but you need to learn to cut your cloth, and you need to realise that a £1k emergency fund would be the square root of bugger all if anything happened and you lost your job.

You have a child to provide for, so you need to ensure you have financial security - have you not noticed that there is a recession on the way? You need to have 3-6mths salary saved up, in an accessible account in case of redundancy or other emergency. No ifs or buts - you can afford it, and you need to do it for your child's security.

If it were me, considering you have a really good salary, I'd say go for it!
Call it your 'year of saying yes' and turn it into an educational experience for your DC too. Demonstrate that it's good to save and be responsible but it's also good to experience the works, and enjoy life and family time too.

As a kid, my dad instilled a real love of adventure in us. The details are very outing but in short, our parents sold up and took us on a mad 4 year global adventure. We learned so much and to this day, I'm thankful for the craziness of that childhood experience. Today, I save and try to be responsible but I'll never say no to an adventure. Life is for living.

Hi op I’m with you. Buying a home on your own is so hard I actually don’t think it’s worth the stress. Even when your on the property ladder it’s maintaining a home repairs etc which is hard on a single wage. On the face of it I have a house which I’m very fortunate to have but I’m a lone parent and the house is slowly falling to bits and needs so much expensive jobs on it I just don’t have the money by the time I’ve paid my bills etc. it’s constant stress as I know my boiler probably won’t make it this winter but I don’t have the spare 6 grand for a new one. So less stress when you have a property with a partner who can share the financial burden.

So basically I’m saying have as nice as it is to own a property doing it all on your own is a constant financial burden.

It depends on how much that single person earns though.

Your parents very obviously had substantial savings and assets before they went on that adventure. The OP has neither, really.

I'm all for adventures, I've taken time out of work to go on extended trips etc. But I've always made sure I had security and was able to keep a roof over my head first and foremost. With a recession looming, the OP should be making sure she has a back-up fund.

Those of us who have lived through several recessions know that plenty of people who thought their jobs were secure get made redundant.

The OP is a high earner though. She's in a position to maintain a house.

I put YANBU because life is for living, but I think you need to find a middle ground.

Set a budget for saving AND spending and stick to it. You have an amazing disposable income and can do both. Don't get caught up looking at what other people have.

We have a few lovely (UK or shorthaul) holidays a year, also different hobbies we all do once a week - we've spent less than 3k on the lot. You can still have a great quality of life without spending loads.

Just don't spend your money on "stuff". It won't make you happy. I think about how much I spent on make up and clothes at that age and feel sick about it.

@Octomore true I guess but if she’s buying in London even on a good wage your money doesn’t go far. Guess it depends on how high her mortgage is .

She has no mortgage. She rents.

She has plenty of disposable income, and it's not clear what she spends it on, but it's clear that almost none is saved.

Or are you referring to when she has a mortgage?

Either way, she'll never get there if she doesn't start living within her means (which does include saving for emergencies).

I had issues when I first started work around ensuring I had enough money at the end of the month, so I’ve worked out a system that works for me (and still does decades later!) I have have a spreadsheet which lists everything i spend or want to spend in a year, then split it into months. The buckets are approx:

• bills inc council tax, mortgage, utilities, phone, broadband, TV etc
• holiday savings (take cost of holiday and divide over the months)
• Car expense savings (insurance and servicing)
• Child savings (covers uniform, clubs etc)
• Long-term savings (aim for at least 3 months salary in case I’m unemployed)
• emergency house savings (e.g. if the boiler breaks)
• my spending savings e.g. for haircuts, dental appointments etc
• everyday spending

• I then have….

• a current account that is my spending account
• a current account that all the bills come out of. I put a set amount in each month that covers the bills and all the savings.
• The saving pots then go off to different easy access savings accounts

If you start with your monthly salary minus the bills and any other monthly commitments, you then split the rest across the pots. If you want to go on two holidays estimate how much they will cost in total and then split into monthly pots. Remember even saving an extra £10 a month or paying off a debt by an extra £10 can make a difference.

When I get a pay rise, I split it into extra spending and dividing across the other pots including increasing saving.

I make sure I track the bills account regularly and update the spreadsheet as things change e.g. bills go up, savings go down. That’s happening a lot at the moment…

Good luck!

@Octomore @luxxlisbon I think you both have interpreted I got promoted with a big salary jump 2 years ago. This is not the case, I got my promotion a few months ago and it doubles what I earned in 2020 eg. 2020=£10k, 2022=£20k.

I also have maxed out my pension contributions and I have student loan deductions both which reduce my tax home thus disposable.

I would have £20k in savings now but I moved into my own rental (this was a must) total cost of that was £6k ish (deposit, 1st months, rent, furniture, new wfh setup, removals etc), £1k charitable donation, £1.5k professional course, £2k in DC ISA and £1k ish on our holiday. The last three things I previously could not do/ or as much pre pandemic due to commuting costs, childcare and my lower salary. I am happy with how this money was spent.

Yes atm I am not super strict with money. This thread had given me a new perspective.

Regardless, it would be unwise to loosen your purse strings until you have managed to accrue savings that equate to 3-6mths of salary. Spending freely is fine.... once you have a rainy day fund.

Sorry, did you say your salary increase got swallowed-up partly due to a £1,000 charity donation and £1,000 on a holiday?