To ask how people built up savings of £5k to £15k?

[ThatOpenPoet]

For those who’ve managed to build up savings of around £5k, £10k, £15k - how did you actually do it in practice? Was it consistent monthly saving, cutting back, a one-off boost or a mix of things?

I would like to hear what realistically worked for people rather than just general advice.

Thank you.

I so wish i had started investing earlier. Those calculations that show you what you could end up with at 60 if you start investing at 18 are painful to see when you’ve only started to think about it in your 30s. I never felt it was worth it when I couldn’t put a ‘decent’ (subjective of course) amount away every month but actually even small amounts would have made a huge huge difference over the years.

Consistent monthly savings.

Budgeting for EVERY spend (hair cuts, holidays, Xmas, BDs, school uniform) then ensuring we lived below our means. You really have to know to the pound where your money goes.

It's important to build and emergency funds first for if essentials break...like cars and washing machines. So a few thousand. The we increased to 3/6/12 months of bills.

So I know people won't agree. But I don't really consider gaining a lump sum and then holding onto it the same as putting money aside regularly. Hahaha

Regular high interest savings accounts . I have two and out the money plus interest into my isa when they mature. Don’t buy coffee or lunch out very often. Buy good quality timeless items of clothing in the sales. I’m rarely in shops( other than for food shopping ) tbh so I’m not tempted to buy stuff.
Ive never gotten into the habit of spending more as my pay increased. Saved the extra when I got backpay.
I don’t buy a lot of stuff! My kids are country kids so don’t expect to be entertained constantly in the same way that townie children seem to expect.

From the age of 16 when I started earning at a part time job while I was at college, my parents told me to ‘spend half, save half’- good advice. I still now (mid 40s) have my wages paid into one account and have a SO to my ‘bills’ account where mortgage, utilities etc come out of- and I always transfer extra if I can. Whatever is left at the end of the month I transfer into an ISA, with a buffer in both accounts. Also good advice from my Grandad- look after the pennies and the pounds will look after themselves! No need for the expensive coffee etc

Spend less than you earn.

Account for irregular spending in your budget. Money that will be used for Christmas, holidays, insurance, car repairs etc needs to be saved for, but shouldn't be classed as savings as such because it will be used up within a year at most, so isn't really spare money.

Set a comprehensive budget that includes all expected spending for a year and savings on top. If the budget doesn't balance you need to increase your income or reduce your spending.

Always worth reducing costs where possible anyway because there's always deals on things like broadband and spending less on this means you have more money leftover to spend or save.

Also be aware of how much little regular spends add up. A single daily weekday coffee at £4 is £20 a week, £80 a month, £1000 a year, £10k a decade or more once interest is included. I'm not saying never buy anything non essential but if you have no savings and non essential spending, its an obvious place to cut down to free up money to save.

Put money away every month. Most people will take months or years to build up significant savings but obviously that depends on how much spare money you have.

@Bjorkdidit- agree so many people I work with buy lunch every day - I take it 95% of the time. It’s a very rare occasion where I won’t. Mainly if there is a team lunch out planned. When I was in London people would be grabbing coffees as well
on the way in.

I could technically afford it but basically I have better things to spend my money on. Days I can I get to the station to swipe in before 6.30 - that saves a couple more £ a day. My journey to work would usually cost between £13-£20 - I always went the cheaper route even though it could be less convenient as limited trains.

it depends on where you are investing. With something like a low fee global ETF (such as Vanguard) it is very very likely to make significant gains if you can leave it for a long timeframe (10+ years). Investing in a cash ISA always loses money due to inflation.

I do agree with you. I only got a Stocks and Shares ISA in my early 30s but I'm still glad I did, it's made me FAR more money than keeping it in cash savings!

If there's a sum of money you can afford to lock away for at least 5-10 years or just make small monthly payments to it's a no brainer really. I've got a long timeframe for mine, I view it as my "early retirement" fund which even saving £100 a month to....over decades is projected to be a very good sum in my 60s.

It was a poster on here that originally encouraged me to open a S&S ISA and I'm so grateful to her.

Pay yourself first and get on board with investing. People in tne UK are terrible for keeping savings in cash.

years ago, I was a child, my neighbours (who were pensioners) grew vegetables in their garden, and they showed me what the Americans call “canning”.

i still practice this today as the years I don’t do it, or I’ve had a bad growing year, my food bill goes through the roof, I’m hoping that this year we do not get blight - but I bet we will though.

We don’t have a huge amount of savings, I always saved extra into my pension, cos if I payed 20% into it, the company paid 10% so I did, and there is another thing at work I saved £5.75 a week into which should pay out a few thousand.

i have worked out what our yearly expenses are and I saved extra into that into a separate bank account which pays everything out direct debit/standing orders etc.

My husband and I give ourselves an allowance each week, and he saves into Moneybox rounding up the change thing, and I put a little bit each week into Moneybox isa account, but let’s be honest, I don’t get too hung up about savings, you’re along time dead. My late mother who died when I was 16, Enjoy your life, Enjoy your family, Enjoy your life, and if you find you’re not enjoying it, work out what’s the unhappy, and make it happy!!

Good luck.

Earn more and don’t allow lifestyle creep to take it all.

I’ve increased my salary 4 fold over the last decade or so yet lead a remarkably similar life to the one I had at the outset.

If you do that for a while you soon end up with a huge investment balance.

Whilst i do invest, i don't think its for everyone.

Investing carries risk and if you re unlucky you can see substantial losses in the short term (which could take quite a while to make back)

Then there is "Are you likely to need these savings in the next few years?" if so or you you don't know, then stick to savings accounts.

I had a small monthly mortgage payment (£200) so when it was paid off I continued to save it for home improvements/repairs. Also at the end of the month I also transferred any surplus to another savings account which I saved £100 monthly. I didn't touch the £200 monthly account for at least 5 years so had a good amount saved up. I've now been spending it on home improvements so it's quite a bit less but I still save the £200 every month.

Thinking about it, even though I work part time on minimum wage I should save any overtime I get instead of spending it.

A mix of redundancy/ settlement payouts (both me and dh) and monthly saving.

A variation of regular amounts on and off but more chunks. Lots of moving accounts around over my whole life. Santander 123 account used to pay 3% that was a good rate for the low interest times that we lived in so even though a current account I used to have my money go round as I called it as you had to use it for direct debits. I think my wages went through three accounts at that point,

I have never had any loyalty to any institution, I think I have had accounts with almost all major banks and building societies. My main thing for money was investing though and over many years I have made far more than if it was just sat earning interest. It’s a risk though and we had a day many years ago where DH was down 25k in one day. No high risk stuff now.

That Santander account was great, it paid that rate up to £20k. We just kept it full and it served as normal DDs, emergency fund and even money earmarked for our mortgage overpayment, which had a rate well below 1% at the time (we didn't spend from that account so there wasn't a risk of seeing £20k in our current account and thinking 'woo hoo, long haul holiday here we come'.

Hahaha. What?

@Brokentoes85 i would consider that saving. I don’t consider pension contributions as savings or my company shares as savings either though. I never include them in my savings amount. No idea why

How do you know where to invest? I wouldn’t know where to start.

Your cash isa will hopefully keep pace with inflation, but if inflation is 3% and the rate is 4% your spending power is only slightly increasing year on year. Broad market indices have historically returned 6-10% per year. The thing that could catch you out is timing risk, eg if you needed the cash the day after a market downturn (which is why older people prefer cash in general or start to cash out their holdings later on in life as they don’t want the volatility / fluctuations).

Some people would build up say 1-3 months/emergency fund cash first, and then start to look at financial markets.
On the other hand if you have £200 per month for savings, it’s worth considering £50 or £100 of that into markets.

Unless you’re in a job where you get decent bonuses then I think the only way to build up decent savings is a monthly transfer into a savings account.

I have other investments too, but about 12 years ago I set up a regular saver where I pay in £500 a month. Most accounts like this have a bonus rate for the first year. I’ve never dipped into it and I’m amazed at what it’s accumulated (I know it’s basic maths, but I don’t check the account very often and it’s always a nice surprise!).

This. And also, every time I got notice I upped the amount by a proportion of the increase, so a hit for me and a bit for future me.

You also need to figure out what the savings are for. If you’ll need them in the next couple of years then shopping around for the best interest rate is the best thing to do. But if you’re happy to look them away for a bit longer, say 3-5 years plus, then you really should invest in a stocks and shares ISA.

I had money transferred on pay day gor a start.
After that I became obsessive until I reached my target.
I would use ( and still do) use sites like Topcashback. Its a slow burner but over the years ive made over £1000. Don't expect it to happen overnight though.
I went without unnecessary things in the week and put what I previously would have spent into savings as I went along.

I have automatic round ups. Again a slow burner but pennies make pounds!

Covid time really benefited me. Dh is really sociable and loves us going out to the cinema, meals, day trips, weekends away etc. Once covid hit he had no where to spend the money so I managed to save loads and invested it. Dh didn't notice money was gone from rhe account until I told him!!!

I generally live day to day quite frugal and dont spend anything usually apart from petrol Monday to Friday.

Just look at a historical graph of a simple global tracker fund. And zoom out. There are always dips caused by major events but if you can keep calm and don’t need to access cash during a dip, then it will go back up again.
I’ve been adding to a passive global tracker since I started earning and it’s without doubt set us up for a secure financial future.