How to amass money?

[emotionwreckage]

This is a bit of a loose question! I am continually mystified by people's ability to pay for holidays and still save money. I see so many people who appear to have endless money to go out, holiday, new cars,even though thouhey can't be earning huge amounts. Also how do people amass saving? We both work full time, albeit not earning big wages. I save £100 a month but things break and need replacing so the money never grows. I find it so frustrating and wonder what I'm doing wrong! does anyone have advice/insight?!

I think a lot of people put things on credit cards which they never seem to pay off. .

Also, you never really know what 'assets' people have in the first place - we paid off our mortgage and have no child care costs which are huge expenses for many people so although we don't earn massive salaries we are able to save - equally we bought when property was relatively 'cheap' and sold at the high end of the market so were able to make investments. Just lucky timing.

We have amassed savings mainly by being happy with our lot - by sticking at a 3 bed house instead of upgrading to a 4, by only having one car, by not being that materialistic, by not being fritterers. We earn a few hundred pounds a year now from savings - that gives us a pretty decent holiday without having to dip into the capital.

We change utility and insurance suppliers every year. We save what we never had - so any pay increases, any things paid off - paid off the car - don't buy another straight away, put the money in a separate account and let it build. We paid off the mortgage, money goes to a regular savings account at higher interest, and it accrues quickly.

We have enough money now to do/buy what we want, when we want to do/buy it - it is just that we are not really doers or buyers - so when we do spend we buy the best (and people judge us wealthy on that) - we just don't spend often.

What do you want to save the money for? Is it for a house deposit, a savings cushion for emergencies, a dream holiday?

Do you have any dc?

Perhaps people have a higher salary than you think.
Dh and I have saved a decent amount and probably due to the following:
Attended university in 1980s so no fees and both graduated with no debt.
Had children later so time to build up a cushion of funds and I was able to stay at home so no childcare costs.
Save money at the beginning of the month, not the end, so the money has already gone and cannot be spent.
Attitude to money- always saved some, even from Saturday jobs and saved up for things rather than putting the item on a credit card. Also not interested in lots of things which are expensive - Sky TV, iPhones etc.

Maybe people earn more than you realise, or have lower basic outgoings?

We earn very good money, our mortgage isn't huge, we have no childcare costs. We own both our cars outright having bought them with redundancy money and a small inheritance so we have no car finance.
We don't live extravagantly day to day - no endless days out, meals out, the DCs get new toys at birthdays and christmas, we don't smoke.

We spend our money on nice holidays, nice wine, and good quality food, and we save.

As soon as I get paid money comes out my account and goes to 2 savings accounts and our joint ac. One of the savings ac I can't access. So the funds build and earn higher interest.

The money left in my account is used for stuff and things I might want. Joint ac pays for bills mortgage food etc.

We don't live extravagantly. But don't go without. I've budgeted for things I might need. Rarely buy new clothes (eBay is my friend here) and have started looking carefully at what I have before getting new.

I'd echo somewhere's comments about buying a house that is the 'right' size. Our first house was a 2-bed Victorian terrace which we knew could last us until we had 2 DCs - so at least 5 years (we bought it 4 years ago and DC1 is currently on the way, so you could say it's more like 8 years!). Other friends went straight in for the 'big, forever' house and are paying much more despite there only being 2 of them in it. Our smaller mortgage payments mean we can overpay on the mortgage and also put money away in savings, so we'll be in a stronger position when we do come to move.

Some may say we have an extravagant lifestyle - we enjoy our 'big trip' holidays, I have expensive shoes and we eat at some incredible restaurants but that is just the way our priorities work, we love good food and seeing new cultures. Plus I have tiny feet and high street shoes just don't fit me! BIL and SIL are always complaining that they have no money yet fritter it away on lots of (IMO) cheap clothing that needs replacing very regularly and other material things - they are always buying new phones, laptops etc yet I've had the same phone for nearly 5 years now!

Also agree with PPs about not 'seeing' the money - I have SOs set up into joint account and savings accounts for the same day I get paid so I never even see the money I might fritter away.

I don't think it's that much of a mystery. Either they earn more than you, have money in accounts accruing interest from inheritances or windfalls, live a more frugal lifestyle or get themselves into debt for the luxuries.

Personally I have managed to save by living an extremely quiet boring life. I now make about £500 a year from my savings and as a SAHM it gives me money to buy presents etc. We are lucky that DP has a pretty well paid job and can take care of day to day stuff but I am always prepared for that to change and me to start working again.

We are not big spenders and live well within our means. We don't spend a lot on clothes/shoes for us until we need them and save up for larger purchases rather than put them on credit. We keep an eye on our bank accounts and utility/insurance providers to make sure we get the best deals and interest rates. No store cards and if we use a credit card, we get a long-term interest free one or pay off the full balance every month.

I check eBay for things we are happy to get second hand and will probably start selling a bit more on there in the next few years as DC start to grow out of toys etc.

Probably most importantly, DH and I have the same approach to spending/saving and a generally transparent sharing of info about our finances. We were taught similar financial values by our parents, the biggest one being "don't put anything on credit that you couldn't afford to pay off tomorrow if you needed to".

Oooohhh yes, and we're were very sensible when it came to getting a mortgage. I sometimes wish we'd borrowed another 10-20 grand to get slightly bigger place. Then I look at our current balance and comfortable repayments and actually think the extra stress/cost would not be worth it. We'll do a loft extension in a few years instead!

Thanks everyone. We live very frugally too. As a holiday for the three of us would cost over a £1000 we can't do it as it would take all the savings each year and savings would never accrue. I guess the problem is were not big earners. I have a small mortgage with £100,000 equity so that's good but it doesn't equate to money now if that makes sense. last month the telly broke so what I'd saved over the last 4 months was wiped out. had to replace the car too and used some savings and car loan to cover that so savings depleted again. How do you all allow for this and still grow savings? We have no debt apart from mortgage and car luang and if I hadn't saved then we would be in more debt.

I keep thinking there must be a trick to it that I haven't mastered!

car loan! !

I think a lot of people earn deceptively high salaries, get a big annual bonus, have inheritance or parental help - but still live quite modestly. Some people have been very lucky on the housing market. I think if you saw us (family of 5) on the street, you probably wouldn't guess that dh earns a 6 figure salary + bonus - because we're not blingy/flashy looking - we have nice cars, but not v expensive ones, we take fairly expensive holidays, but not excessively so.

It is easy to fritter money - are you on the best tarriffs for elec/gas? How do you manage the money? We have a savings account, plus investments/ISAs - and I find myself often dipping into the savings account, for this and that, whereas I'd never dream of dipping into the ISAs etc. Make a proper household budget, then have a savings account that you don't touch/can't access - it will grow because you don't see it as money you can spend.

I am quite interested in this question too - especially regarding holidays. The reality is that most overseas holidays are expensive - like over £2000 for 4 people if you travel during the school holidays (package and then needing spending money on top) so you would need to save another £200 on top of your £100 and which looks like this has to be earmarked as your contingency fund for breakdowns, not savings. I put aside £100 a month for the bulk of holiday spending (European city breaks ie. to secure flights, accommodation) because we can usually fund breakdowns out of our discretionary monthly spending just by being a bit frugal (we don't go out much at all) and cover holiday spending in the same way.
You could pay for a big holiday on a zero % credit card and pay the balance off over the zero % period.
People's finances can be complex - I imagine with one or both getting a bonus or such like; DH does get one but we don't earmark that for holidays - we buy sofas/bought new bathroom suites!
Sometimes I think it depends on your expectations when you were growing up - we didn't always have a holiday and DH's family went carvanning with a tourer and neither of us especially have wanderlust... the DCs however are starting to crave holidays in the Med, whereas I crave culture...

My savings come out of the account the same day I get paid.
Little amounts amass to something in the end.
For instance, one of my saving accounts ( First Direct regular saver) pays 6% interest. The money are locked for 1year. This money get put in an ISA at the end of the year.
I have a bonus saver account as well. Basically, you get a bonus for not withdrawing that month, on top of a small interest.

But, I have some very strict rules about money.
The joint account gets topped monthly with a budgeted amount. Say bills and rent, food and petrol amount to £1500. We each put £750 in. We spend that, there is no more money, unless we agree to top up, but we try really hard not to.
We also add £100 each for entertainment as a family: movie tickets, restaurants, books etc. Some months we agree not to spend anything/less on entertainment because I don't know, christmas is coming, we're going abroad etc.
If I really must go to an exhibition/meal out with the girls, I take the money out of my own savings.
Any big purchases (sofa/fridge/car) are only done if we save together. But I am known to just work overtime 6 days a week for a month, sacrifice myself, next payday I have £££ extra to just go and buy what I need if it's urgent.
Holidays are saved for as well. We adopted a continental way of doing things: we pay 12% of our salaries in a holiday fund for 10 months. January to October we add to this pot. Come November we each have one extra salary, a 13th month if you like. We book our holidays between christmas and new year/beginning of January, when the sales are on.

We don't spend more than what's on the nectar cards at christmas. Basically, December is an expense free month. Deliberatly, so we don't get swept with the hysteria. I start my Christmas shopping in september, by 1st of Nov it's all wrapped and finished with. We all get 3 presents each (something you want, something you need and a surprise). Family and friends get one thing each. I put £50 aside each month for birthday and christmas presents, it rolls from september to august. But we're not a new tv/sofa for christmas type of family.

I have a high interest saving account, locked for 1year (I use FD regular saver-6% interest.) On the anniversary I would have saved £3600-the max they allow you. I then transfer the money into an ISA and keep it for emergencies.

I appreciate not everybody can afford to do what I do, my pay isn't bad. I also made my H play by the same rules, which was very hard, as he's a 'chuck it on the credit card'/'it's ok, my parents are well off' type of person.
HTH

Been writing this for the past hour, sorry for repeating myself

Well, I have 4 credit cards and between them, if I wanted I could have access to about £50k of credit, which I wouldn't be really able to afford to pay back, I don't use this available credit and pay off every month but I guess some people do. I earn about £20k a year.

We are lucky, I work from home but get paid very well however if you passed us in the street you wouldn't know. We don't have an extravagant life and don't buy designer clothes or stuff, we have bought our cars so no finance on them and our mortgage is quite small. Because we don't have an extravagant life we can save quite a bit each month and when one of us gets a bonus it just goes in the bank as we don't generally spend money.

we also don't feel the need to keep up with the joneses, we don't care what other people have or what they do with their money.

Being mindful about money seems to be the key - it's a finite resource after all for most of us.
I actually think about money all the time .

emotion it sounds like you are doing really well! Holidays abroad are not mandatory. We never went abroad as a family and rarely holidayed on this country either and I survived!!

Is there any scope for either of you to earn more?

high interest savings accounts aint what they used to be!

'high' is about 1.5% these days :(

A lot of the money I save comes directly out of my salary. I invest in two different share schemes (one pre-tax, and one post-tax), and make AVCs to my pension (as well as buying childcare vouchers) in this way.

I also buy premium bonds via standing order each month and stick 1/3 of my earnings into a savings account (although this money only really covers school fees/extra curricular activities for the DC).

On the other hand, I hardly ever go shopping. My clothes are mostly several years old (I'm currently wearing a top I bought in 2001, with trousers I bought in 1999 and shoes I bought in 2006). I possess a grand total of 3 bags. I don't buy magazines, newspapers, etc.

So a combination of saving money before I see it and not spending much and earning a reasonable amount, although I appreciate this is more difficult to achieve for many people

We save what we never had - so any pay increases, any things paid off

That is such a good tip! I'm starting to worry about my lack of a decent pension fund, trying to work out how to amass 600 a month at the moment.

We have what would prob be considered a low income. About £22k/yr.
We choose our luxuries with thought and decide where we actually value the experience. For us family days out and holidays are more important than fancy meals or designer clothes.
We don't eat out often, choosing to just go for dessert in indie cafe down the rd instead of fancy meal in town. If we are in town shopping and need to eat out, it's almost always with tesco club card vouchers.
We have classic, well made clothes that will last several seasons or even years ( though shops selling these are getting harder to find :( )
We cook from scratch often.
We anticipate needs and stay on the lookout for eg offers on car tyres, white goods, paints etc.

We have our main joint account and a pocket money account each.
On average we save £400 pm, and use a slightly complicated method of bouncing money around accounts to earn as much interest/rewards as possible. Last year we earnt £800 in rewards ( like switching bonus and cash back ) and interest.
We have a big holiday every 2 years but again it's carefully chosen based on money available, not find one we want and then stick it on a cc.

A friend recently commented that I must find it hard being so restrictive but actually I don't see it that way at all. I feel empowered by our choices and I prefer having a buffer than ( in my view) wasting £60 on a family meal out when we could feast for a tenner at home.