becoming the kind of person who saves

[avidenjoyer]

I am a spender by nature, but married to a saver! My parents were terrible with money so my role models are limited. I am 32 and I have two DC 5 and almost 3 - the younger gets 30 hours next year so I am using this as an opportunity to return to work full time and have a bit more money - I am a teacher in a private school. Since I've had the DC I have worked a mixture of part time and not-at-all so take home pay has been much lower and saving impossible.

I have used a couple of sites to calculate my take home pay and depending on the exact salary I will have (tbc in complete detail) I should take home between £2000 and £2100 pounds per month after tax, student loan and pension contribution of 7% (salary sacrifice). My employer pays in 4% on top of this.
My contribution to our joint account will be £850 which will cover mortgage, bills and kid stuff. DH pays in a similar amount and we get child benefit in here too so tends to cover all that stuff.
My personal outgoings are £60 on my contact lenses and phone bill and realistically another £100 on clothes/hair/waxing. I also like to meet up with friends or go out in some way a couple of times a month and this will add up to another £100 a month. I don't have any loans or credit card payments anymore so this is everything I have to spend, although I always seem to need more for miscellaneous like dentist, birthday presents, extra social things, twice yearly spa day with uni friends.

I would like, however, to save around £500 a month. I have no personal savings although we have an emergency fund of 10k that my husband saved from an inheritance, and a further pot that DH has saved himself that he would like to use to pay down the mortgage next year when we can do that again. (we did it once this year). Am I being unrealistic and would anyone suggest a different figure. My full time contract is only 1 year (a maternity cover) so I'd like to take advantage of the extra money incase I have to go part time again.

Thank you wise money-savvy mumsnetters.

Going from saving nothing to £500 a
month is a big jump, is that realistic, if you have nothing left at the end of each month currently?

I’d aim for half that at the moment with a plan to increase it in the near future.
Set up a DD so the £ goes into a savings account as soon as you get paid.

19Lottie possibly not realistic.
Right now I take home 1350. My contribution to joint account is less- £700- theoretically leaving me with 650. Once above described expenses come out I am usually left with £150-200 but fritter it on things I don't need like lunches at work and extra shoes/clothes. This spending could easily stop plus I will be earning quite a bit more so I was hoping £500 was doable but as I'm not in the right kind of habits it could be unrealistic for sure .

You need the Moneysavingexpert website. Sign up to the weekly newsletter to become 'the kind of person who saves' by osmosis.

There are different ways to save, it is a combination of increasing your income, cutting essential costs and reducing the amount of money you waste on crap. And if you get into the habit of doing all these things, the effects multiply and you have more money to save.

It might not seem worth doing something to increase your income by a fiver, something else to cut a bill by a fiver, and making your lunch instead of going into Pret, but if you do all those three things, you effectively have an extra £15 to put into savings! Literally, look after the pennies and the pounds will look after themselves.

Sounds like you need to start from scratch with the Budget Planner

Also have a play with the Demotivator to slap you in your face about how the cost of a daily coffee and lunch from a shop instead of making at home can add up to a couple of hundred pounds a month, thousands a year, or about £20k or more in ten years.

I read ‘The No spend year’, about a journalist who hardly spent any money for a whole year to cut down her mortgage. She was drastic - no alcohol, no haircuts, she cycled everywhere! Too much for me! But it did inspire me to cut my spending down.

We ‘save’ with mortgage over payment. Use a calculator to check it out. We will potentially save 70k by doing this, more than we could save it the time scales

I would set up a standing order to transfer the £500 to a savings account straight after you've been paid. If you havent got it in your current account you'll be less tempted to spend it.

If you end up really short after a few months of this then adjust down, but start as you mean to go on!

Thank you for all these ideas. My husband put a (lighthearted) bet on the fact that I'd still not have any saving this time next year despite earning more so I'd like to be able to prove him wrong! He is right that I love spending whatever I have left and am a 'live for now' person and he is the direct opposite so it is going to be a hard change. When I have spare money I start googling what dress to buy and he relishes the chance to put it aside. But I really do want to start saving once I earn more so I am very interested in your thoughts on this thread

Reallybad that's a good idea - if I never see it then I guess I can't miss it too much.

Hi OP - if you want to stay saving you’re going to cut back on your spending! The coffees and lunches are going to be a killer.

You need to list everything you want to spend on, hair, presents, entertainment ect and put money away for it monthly.

Another vote from me for money saving expert. Check out the debt free wannabe part of their forum. Even though you’re not in debt, the posters will help you create a statement of affairs (what you spend your money on) and advise where you can cut back to save more! They are fantastic, but you have been warned, brutal!

PS maybe just try a no spend (bar the essentials) month, you will be shocked how much you’ve got left!

Once you catch the savings big there will be no stopping you!

I'm a 'natural' saver. Anxious and tight!
DH isn't. One thing that helps him is knowing what he is saying FOR. He's not good at saving for 'the future'/ old age. So I do that, he saves for a holiday / new car. You mention maybe going part time in future - is that the goal or something that might go wrong?

I'm going to need brutal!!
Yes lunch and coffee is a total killer. I work on the high street in a beautiful market town with an array of overpriced sandwich shops and fancy coffee houses and my self control is limited! I absolutely know that I can and should make lunches. DH does it and resists the temptation of his nice town !

Love51 not a goal. I currently work part time as a job share- the other person goes on a year-ish of mat leave in September so I am working full time for the duration of her maternity. When she comes back I will in theory go back to my part time role or use that moment to find another full time role.

Re lunches and coffees at work. Maybe allow yourself one coffee and lunch out each week and the rest take from home.

Have a think about what nice packed lunches you could make that you will enjoy instead of dull sandwiches and make sure you have the ingredients in. Also maybe make 2 lunches at a time, so you don't have to prep every day. I usually take leftovers anyway, but if I don't have any leftovers, I take things like fresh pasta rather than cold food.

Current favourite is to put half a pack of filled tortellini (stock up when on offer in supermarket - usually lasts a couple of weeks, or freeze), a grated courgette, spoon of pesto and a spoon of veg stock powder in a tub and at lunchtime add some hot water and microwave for a couple of minutes.

If you spend a lot on coffee, you could make it at home and take it in a nice leakproof cup like a contigo (expensive but if you cut down on coffee spends it will pay for itself in no time).

£60 on a phone and lenses is a lot. Have a look into how you can reduce both these items. Should be easy enough to cut this spend in half if you are not in a contract and don't have specialist prescription.

Re the coffee and lunches, make them and home and don’t take cash / cards to work with you. It will be hard but unfortunately if you don’t have any willpower things will never change.
I also agree with the “a little of what you fancy rule” maybe allow yourself a coffee on a Monday and lunch on a Friday?

I got into the savings habit by saving half of every pay rise - so I still had a bit more spending but also had a good savings habit. Our joint savings are now £1100 per month so it can be done

The biggest area I waste money is buying lunch and hot drinks. Like others have said, try and cut down here apart from planned spends - no probs doing it, but budget for it. Buy nice ingredients for lunches, you're more likely to sustain the change if the food is just as nice as bought stuff, even though it will be slightly more expensive than going for the absolute basics.

I spend about £40 on lenses and phone a month, I have quite fancy lenses but it's worth it me for eye comfort, I've tried loads of options. My phone could be cheaper but I used to use a lot of data in my old job which I no longer do, so when the contract is up I will assess what I actually need and expect to be able to cut the spend significantly. I get corporate discount on my phone plan, is that something that might be an option for you?

If your income is rising by £650 and your outgoings by £150 then £500 is vey achievable if you live comfortably on what you have now. Do you?

If so, forget about the pay increase, set up a DD for £500pm on pay day direct to savings a/c and continue as normal, pretending you had no pay rise.

If you're struggling a bit now and could do with another £100-£150, then aim a bit lower and see the DD accordingly.

Chewbacca yes I live comfortably but as I said, I tend to waste what I have left at the end of the month. I think a DD is the way forward, if it isn't there from the start haven't got the opportunity to think of all the things I'd like to spend the extra money on!

I like the idea of having a savings goal. 'The future' isn't enough for me to be motivated but maybe a 'house fund' as we'd like to move in the next few years and saving 500 for a year could be the solicitors and moving fees...

I'd highly recommend YNAB (you need a budget), it's really helped us get a handle on what we actually do with our money every month!

It's a paid for subscription, but if you google YNAB 3 months free trial you can have a look for free.

I've just come to the end of our trial and have decided it's worth spending the $89 annual fee for the amount we've saved over 3 months!

Kind of doesn't matter if you fritter the rest of your money, don't beat yourself up about it. It won't affect your ability to save the extra £500 that you never see will it?

If you want to save more than £500, you'll need to adjust your spending habits but I'd stick with the £500 and continue to enjoy your ££ for now if I were you.

@avidenjoyer good on you for recognising you want to change.

Here's my story/tips:
I've always been on the more frugal side, but really became a proper saver through being single and having all the responsibility for running my home on my shoulders, so it was necessary to have something set aside if the (then ancient) boiler died, or the roof needed redoing etc. That just snowballed.

Since then I have really embraced the "pay yourself first" concept. On payday, I have about 20 different payments set up, which fire money off to various different savings accounts for example my car, hobby, household, even a "piss it up the wall" one for guilt free spending! These all get paid as equal priority along with the household bills. So 3-4 days after payday, everything, including my savings, are paid and any cash left in my account is used on groceries throughout the month.

Come next payday, any residual gets sent to overpay the mortgage even more, so I always start with a clean slate.

Last year I received a very significant pay rise. But I have not seen a penny of it, as I have increased my tax-free pension contributions so the extra gets sent there, and I also get a nice little booster from HMRC (HR taxpayer) - my takehome is still what it was before the rise.

I added up all my various accounts recently. If necessary, I have instant access to approximately 6-8months of living costs, with more tucked away in fixed term savings, and of course my pension (eventually). I also have many thousands pounds worth of credit card spend available and a pristine credit rating, as I have been so diligent over the years. This enables me to do things like take out 0% finance on large purchases and keep (admittedly now fairly paltry) interest on the cash I'd have otherwise spent upfront. This was more useful a few years ago when interest rates were higher!

So it's really more of a living below your means and if and when your means improve, don't expand your lifestyle to fit if you don't need to. That, and compound interest.

Oh and I am massively overpaying the mortgage each month too. I am aiming to clear a 25 year term in 10.

Chewbacca thanks, no I guess it doesn't. More than 500 would be pushing it for me I think. I will have a try at 500 a month as it seems doable after this discussion, and I suppose I could adjust down if I've miscalculated.

oreo thanks I'll take a look!

Definitely dd it away. It is the only way that works for me!

Not that I'm saving, I'm making overpayments on credit cards...

The problem I always get stuck on is what am I saving for? Apart from covering an emergency or losing our jobs, which are boring grown up things that no one in their right mind would want to think about. Surely the point is to have a nicer life not work for the sake of a number.

Maybe you could talk to DH and put the money half to savings for emergencies and half to overpay the mortgage. The savings over the lifetime of the mortgage are insanely massive. Think MSE have a page on it.