To spend pay rise on fun?

[Payrisethoughts]

My husband has received a pay rise, it will probably end up being 150-200 a month.

We currently save/pay:
£600/m bank
£300/m mortgage overpayment
About £150-200 invested.

Our biggest outgoing is holidays, we save around the same for holidays a month as our base mortgage cost. We aren't very stuffish people, and we save higher end things for gifts, but obviously we do spend quite a bit on holidays so not trying to say we aren't spendy.

We also save every month for annual bills, Christmas etc.

Lately I've been thinking about how we put so much time/excitement/planning into holidays, but not so much into actual life. We do lots of low cost days out, we love hiking, visiting NT places, the beach etc. but we don't do many big spend activities, we very rarely each out, occasional concert etc. so my main concern is we aren't spending money on having FUN. We both really enjoy our day out, but more spenny fun fun activities are things we reserve for holidays.

AIBU to suggest we use the payrise for this? Or should we be saving more?

We are both mid-30s, no children, no debt (apart from mortgage/student loan though his is almost paid off). We share all money.

Can you do a bit of both? Save some spend some?

Interested in any answers to this as I’m in a similar situation and having grown up with very little money I always feel I should save for “what if” …at what point do I enjoy it?!

I'm the same! We have savings and are actively saving. When do we get to have some fun!?

I mean yes, but at present it feels like our whole life revolves around saving (mostly into pots for things, but obviously also the locked away money/mortgage overpayment too).

How much do you have in savings now? If low, I’d build them up first.
How are his pension contributions?

Around 40k.

Pension does probably need work, he's nearly paid off student loan (1.5k left) so the idea was that that money could go in pension potentially too once paid off (he's 36).

You don’t have kids and save a decent amount a month. The only thing I’d say is how are both your pensions looking? If good then yes I’d spend the pay rise money. If not then £100 extra a month into pension and the rest spend.

Fuck it, have some fun! You have 40k more than me in savings! 😉

Life is for living!

You say you have no children, but do you plan to have some? If yes, I’d say keep the pay rise for more saving.

If no children planned, so long as you feel comfortable with your current outgoings and current savings, then I’d say life is for living - enjoy yourselves! Don’t wait until you are old and in declining health before you put your money into fun usage.

I've posted this a million times on MN before but my very first boss in a proper serious job told me not to flitter away pay increase.
(1) A third on long term/pension,
(2) a third on savings or debt reduction and (3) A third on fun or lifestyle creep. It's always worked well.

You seem to put everything into 2 above.
Is the 600 going to any purpose or would it be better to divert some to pension depending on the savings balance and likely short-medium term requirements?

Pension and fun seem to be neglected!

I guess because pension is 30+ years away, it doesn't feel so imminent though I take the point. We hope to have paid off mortgage by mid 40s so would theoretically still have 20 years of pension-paying.

I'm honestly not sure what is a good amount pension-wise.

I have a lowest salary but decent benefits and pension, husband's salary is 20k more but he doesn't get the benefits.

We are not a super high-earning family (80k + side hustle of a few k a year).

I do expect to (sadly) inherit some money this year too and it's probably that that's got me thinking (though my relative had a wonderful life and travelled a lot!)

Your pension will gain far more than you'll save in mortgage over repayment!

You can probably find calculators online to prove this or any good financial advisor should have a package to prove it.

It's false logic to think you can catch up on the pension when early investment results in compound growth.

You aren't making your money work for you in the best way.

I didn't say it wouldn't, but I'm not as worried about when I'm 65 (if I make it that far!) as I'll likely have come into other money by then but the period between hopefully that'll be far off when I'm 43, if you see what I mean.

To work out what your pension target is you need to work out what lifestyle you want in retirement and what that will cost. In today’s money and assuming no mortgage, a net income of £45k is enough for a “comfortable” retirement for 2 - some meals out and a couple of holidays a year.

it takes C£300k to generate £10k of annual income, so assuming you’ll both qualify for full state pension you’ll need in the region of £700k in pension savings for that £45k

Just spend it. You’re in a fantastic position, you seem very sensible and have planned enough to cover regular expenses and keep savings topped up. Life is for living, go have some fun

CoL keeps rising so it may end up going on essentials anyway.

But why not save half and spend half? That way, you know that every couple of months you have around £150-200 for fun - you can get tickets to most gigs for that price, or good theatre seats, or dinner in a good restaurant. Or go for cheaper seats/standing room at gigs, lunch deals instead of dinner at fancy restaurants etc and try to get as much from the money as possible.

I split any payrises - increase savings / investments and spending.

It sounds like you save enough. Have some fun.

Thank you, some good advice here!