To think you can’t save if you simply don’t earn enough?

[MyAmberBird]

A lot of advice around saving focuses on habits and discipline but it feels like that only goes so far. If someone doesn’t earn enough to cover their basic living costs with anything left over, then realistically there’s nothing to save.

AIBU to think income is the limiting factor here? I don’t think habits play as big a role as people like to think.

Absolutely this
There was a great thread about how even small amounts accrue interest and how a long term apptoach to saving gets you an astonishing return
The PP Vinted idea is brilliant

Do you have the link to the thread please? I’d like to have a read if so

I think pp might be thinking of the thread about compound interest?

Here's a link to a compound interest calculator: Compound Interest Calculator | Hargreaves Lansdown https://share.google/2a2rXU4no6YVJTmgs

It shows how your money grows and snowballs the longer you keep saving. This calculator also allows you to work out how much ypu need to put away each month, or how long you need to save, to achieve your savings goals. Relatively small amounts over a long period can give you a really nice sum, much higher than what you contributed.

Electricity costs more from a pay as you go meter than billed

Even the government likes to get in on the act and blatantly exploit poorer motorists who can't afford to pay a year's VED in one go. If you can only afford to pay monthly, they take advantage of you and pump you for extra over the course of a year. It doesn't even cost them any more in admin, as all the payments are automatic.

Of course, its basic maths.

My entire food budget used to be £12 a week, I didn’t have hot water as I couldn’t afford to heat it, as I was on a water meter I had most of my showers at work, the only way to save would have been to eat less or default on either my rent, council tax, electricity or water.

I used to be able to save and put aside £500 a month. Not only have I not had a pay rise in 3 years, everything has gone up in price massively. I’m fed up with it all.

Whilst there are indeed some people who do make very unwise and careless spending decisions, a lot of people genuinely do not understand what it's like when you don't have enough money coming in - or just enough but none at all to spare.

They do it the same if you ever mention that you don't have a pension - all the wonderful 'advice' about how it will be harder for you when (if) you retire, so you really should get a pension - as if they have them in a big box in the park and you can just take one.

It's always a giveaway when people give you all the 'tips' about how much you could save or redirect to something better, if only you stopped buying all of the little regular luxuries that they believe everybody buys - which you couldn't hope to be able to afford anyway! If you don't have a spare fiver to give to Starbuck's in the first place, you also don't have a spare fiver to spend on anything else!

We had years where we were on the bones of our arses. Could not save as could barely meet expenses.

Things got better and we now have substantial savings. You cannot save what you don't have in the first place.

I know some people who claim to be poor yet they also have a flat-screen, colour TV!!!

Everyone can save- some can save £1000s a month, others may be only able to save 1p a year.

Well it very much depends. Of course a significant minority of the population don't have enough to cover very modest basic essentials let alone save money each month.

But many other people could save, if they reduced what they spent on what they see as 'essentials'.

Is their phone SIM only with a cheaper smart phone, eg £100-200 value, changed every 4 years, so average cost under £10 a month, or do they have the latest high end phone with a £40+ monthly contract?

If they had £50 left at the end of the month, would they save it or spend it on a takeaway?

Is their hair cut and colour £100+ at a salon or do they spend £30-40 on a cut and finish at the local hair dressers and use a £5 box dye?

Etc etc etc.

I was discussing this with my other half just last week. My view won't be popular...

Leaving aside people who have no possibility of increasing their income (e.g.too disabled to work) if you need more money in order to put some aside for savings, emergency fund, pension, you HAVE to take on better paying work. That usually means longer hours, more responsibility, being in a decision-making role where you are accountable if things go wrong.

Partner and I started our working lives in NMW jobs but now in our 50s we have more stressful jobs and get paid commensurately for that.

Sure, you're going to have periods of your life where you have bugger all income and are just treading water, but as life goes on and kids leave home you have more time available to retrain, seek higher paying jobs and take on more responsibility at work.

If you do NMW work your whole life you'll have NMW money your whole life.

I think sometimes there is an over focus on saving small amounts and not eating avocados and not enough on the bigger picture -

Your income - I find it incredibly depressing how many people have written themselves off as having low earning potential from a very young age. I'm not saying everyone has the potential to.earn 6 figures but almost anyone without an intellectual disability can do something to better their earning prospects

Your living costs - lots of people haven't been very thoughtful about where they live and why. E.g. moving might mean you don't need to run two cars, might have better childcare options so you can work a different job. Or on a more basic level getting the very best deal on utilities

Financial literacy is very poor. I have seen people say it's not economical to work because in the school holidays they would pay more in childcare than they earn - not really counting the fact that they could cover some weeks with annual leave and they should average out the cost over the whole year.

There will always be some people who really can't save a penny but I don't think there are that many.

100%. I’ve never understood the MN obsession with saving. What are you saving for? To pay your own care home fees when your friend who had nice holidays and Starbucks coffees gets hers paid for?

To be honest if I had nothing left each month after paying the essentials, I'd be desperately looking for any way to increase my income.

Well it all boils down to what is considered 'essential living costs' really.
Brutally, housing, commuting costs, basic food, chilcare and household bills are 'essential'.
All of the other add-ons which are seemingly 'essential' such as two newish cars, family days out, activities, soft play, date nights etc because 'we live in one of the richest countries in the world' or 'I refuse to let my children suffer' or 'I work hard so should be able to afford a coffee when i want one' or any of the other reasons often given on MN to justify discrentionary spending as essential, not so much.
Lifestyle creep has meant many things which were definately luxuries even 20 years ago are now regarded as everyday spending.

I think people do look for ways.

But they’re not machines. They can’t work every hour.

Plus the unemployment situation is quite bad.

Save?
I’ve never even earned enough to live within my means.

100% this. We're all told we need to pay into pensions. But if you can't earn enough to meet your monthly expenditure (I'm not talking a daily coffee, I literally mean rent/utilities/food), how the hell can you afford to pay into a pension?

I think quite a lot of people could work a few more hours than they do though.

A parent who could fit in 3 hours baby sitting each Saturday night while their spouse was at home with own kids, could easily add £150 a month.

Yes it’s true. Poor people don’t deserve downtime with their families.

What a wonderful idea! It never occurred to me to 'just get a better job'. Obviously there are more than enough middle management and upwards positions for the entire working aged population in the UK.
Unfortunately most people are of average intelligence at best (I include myself in this) and we are not all cut out for years of studying/training. The country runs on workers doing the basic NMW jobs, 15 managers sat in an office won't actually fill the pot hole, look after the elderly, stock the shelves or pick and pack products in a warehouse. We need management but we need more people actually doing the job!
The reality for most people is that they will find a job role that they are good at/can stick with and live their lives accordingly based on that income. Every full time working person should be able to cover the basics with a few treats etc, full time work should not leave you on the bare bones of your arse and this is the problem that needs solving, not telling people they should 'just work harder'.

Gosh yes…the absolute extravagance of a mobile phone!

I had a period of time working 7 days a week. Existing just to earn to live. Not tenable. Depressing.
I’m now dipping into my savings every month until something changes.
Lone parent, modest lifestyle.
It’s an employers market.