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.

ShotsFired wow I am in awe of your financial organisation. I wish I could be like that - right now I'm a 'see money spend money' person as long as I know I've paid what I need to into the joint account so the mortgage, bills and DC are covered. I rely heavily on my DH being organised and good with saving and I know that this isn't sensible in the long term and I should know how to budget and save myself.
I aspire to be more like you - it is very disciplined to not see any of your pay rise and is what I'm planning to do on the advice of Chewbacca here

@avidenjoyer ShotsFired wow I am in awe of your financial organisation. I wish I could be like that - right now I'm a 'see money spend money' person as long as I know I've paid what I need to into the joint account so the mortgage, bills and DC are covered.

Then I think the "pay yourself first" idea might work for you too!
Set up account/s which have specific uses and add them to your monthly requirements alongside mortgage, bills and DC.

If you think you will struggle to not dip in, don't even sign up for online access to see them, or have the card or passbook handy. Just send the money into the black hole until you need to spend it (e.g. my holiday pot is about to be rinsed as I've booked some expensive trips and the cc bill is due in June!)

(If it helps, OH was exactly like you and he is now a born again saver, spreadsheets and all! You can do it!)

Maybe aim to save £5k in the next year? Then you will be able to spend a bit more freely at the same time as saving up a nice sum.

It sounds like your extra money is a one off as it's while you are working full time temporarily, so you will also have to cope with less money when you drop back to part time - make sure you don't get used to spending all your extra money or the year after will be a big shock or you could risk getting into debt.

You could look at a regular savings account (some banks allow you to have these if you have their current account - they pay a bit more interest and you generally can't withdraw the money during the year).

Maybe save £200 pm in a regular savings account and another £200 by Standing Order (sorry, bugbear, when someone sets a payment up like this, it's a standing order. This is not the same as a direct debit like the one use to pay the gas bill etc) for £200 elsewhere.

The interest payable on these savings won't quite make it up to £5k, but it will be pretty damn close so you could try and keep a bit extra in your current account so you can make it up to a nice round £5k after a year. Imagine what that would feel like, having £5k in savings? Your DH would probably be pleased too.

If you're really determind, £200 pm into a regular savings account that you don't look at for a year and buy £200 pm in premium bonds, so the money will not be easy to spend.

@RemainOptimistic 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.

Amongst others, I have savings for:
Holidays (got expensive tastes there!)
My car (servicing, tax, insurance, plus funds for when/if it dies, as its 14 now...)
Fun (the aforementioned guilt-free piss it up a wall fund)
House (any decorating, DIY, appliances, furniture etc)
Hobby (kit, parts)

Having ready money to fund all those things is precisely how I DO enjoy the nicer life.

It sounds like your extra money is a one off as it's while you are working full time temporarily, so you will also have to cope with less money when you drop back to part time - make sure you don't get used to spending all your extra money or the year after will be a big shock or you could risk getting into debt
This is a good point I hadn't thought about. I guess it's essential really that I don't spend the extra as if I'm part time again I might get in a pickle.

I will definitely look into an account where I can't withdraw the money for a certain length of time.

'born again saver' haha this is a great phrase and what I'm aiming for!

ShotsFired when you say you have all these different pots are they actual physical different accounts or are you just putting it in one account and mentally assigning it to different things?

I have actual different accounts. They are next to nothing interest, instant access, easy saver with my main bank, so when I go online I see my main current account followed by all the savings accounts.

But OH has just one savings account and uses his spreadsheet to keep track of what the overall total is broken down as.

Whatever works for you is fine

I tried all the different pots and/or spreadsheets thing and got fed up with it in the end. I'm not particularly bothered about actively budgeting and we have a reasonable disposable income that we can just pay for what we want/need from the current account or savings.

That would include up to a car for a few grand, a holiday or a small building/renovation project (maybe about £10k total). We're not likely to want to spend on moving house or a big extension so don't need £££s.

We now just have some money in premium bonds, some in regular savings, some in Tesco/TSB current accounts which pay 3% interest

Most spending is actually done on credit cards (cashback and paid off in full every month) and then the bills are usually paid from the current account, topped up by other accounts if necessay. As well as the above accounts our current account is a Santander 123 account, which pays 1.5% on up to £20k so it's just about as good as you can get on instant access.

Wouldn't work if you're the 'spend everything in your current account' type, but we don't touch ours during the month, it's for bills only and spending is done on the credit card and we both have a cash account that is topped up by about £100 pm for small spends.

In this low interest rate enviroment, I'm aiming to put 'formal' savings into premium bonds as well as what's in the other accounts, as it seems as good a way as any without getting into shares etc.

I also love premium bonds for this sort of saving. You'll earn peanuts on most other savings accounts but you are fairly likely to have a small win on the PB in the year which is very satisfying! You can get the cash back out in a few days if you really need it but not instantly.

I’d start by transferring a set amount eg £250 in a regular saver account as soon as you get paid . That’s £3000 in the first year . Then increase it in future if you feel you can . Having money in the bank to buy what you need when you need it is the best feeling in the world . Imo

I would set up a standing order to go into a savings account just after pay day.
Also do “rounding” transfers. So check your bank balance regularly and transfer the “loose change” amounts of the balance (eg £1.93 of a £1001.93 balance) into your savings account too.

I didn't know you were "allowed" multiple bank accounts. Can I just go into Barclays and ask for 10 instant access accounts?!

Yes, move £500 on payday. It sounds eminently doable.

Saving is quite addictive, hopefully you'll enjoy it pretty quickly. I second allocating your money so you know how much you have for lunches, treats etc.

Re knowing what you're saving for, I really recommend taking a very long term approach. Think about the lifestyle you'd like to have in 5, 10, 20, 30, 40, 50 years. When would you like to retire? (Well done for contributing to your pension!) Would you like to work part time from age 50? Take foreign holidays? Go to the theatre and afternoon tea regularly when you are 60? Be able to pay for decent carers to come to your home when you are 80 so you don't need to go to a basic care home? How much income would you need at each of those points? Where's that coming from? Doing this changes the money you are saving from random figures or dresses you are not wearing now, to tea at the Ritz when you are 60, a weekend at center parcs with your grandkids, never worrying about whether you can afford to leave the heating on high all year if you like. Or a personal shopping experience at Selfridges when you turn 70 if you prefer :)

The automatic millionaire (book and audiobook) talks about Pay Yourself First. This is a good way of thinking about savings, instead of saving what you have left at the end of the month, make a decision on the amount to save and have it automatically come out of your bank account shortly after your pay goes in. I do £400 a month this way going into Stocks&Shares ISA. It just happens automatically, it's just like a monthly bill/mortgage payment.

Tracking spending is essential at first, as you will find areas where you overspend. Lunch, coffee (I had a £400+ per year Starbucks habit), clothes, shoes, electronics, stationary supplies. Be intentional about your spending, set yourself a budget for particular categories so you have money to spend on things you want but when you do spend that money you think "Do I need this". It can help to have categories that you overspend in as cash - harder to part with cash than to touch a debit card.

Look back over the last year and try to build a list of those unexpected expenses and repeating expenses which may only come up once or a few times a year - dentist, opticians, car insurance, spa day with friends, wedding gift. Create a budget which enables you to put aside some money for known future expenses and those that are variable. That fund of money can sit in an instant access savings account so it is out of mind but ready to be used when the need arises - don't let it get too big as you won't get much interest on it, you want your main savings to be elsewhere so they work more for you.

Look at childcare costs and other children associated costs. By working more your childcare costs may change, you have mentioned getting funding but that may not cover all your childcare cost. Consider children's growing needs - clothes, shoes, larger bed and plan for those in advance.

Set goals - save x amount per month. Track goals - chart on the fridge so everyone in the household can see progress, such as savings increasing, mortgage decreasing, kids entertainment fund increasing (enables children to see how a trip to a theme park will happen but you need to save to get to it - so do their bit by reducing costs, turn off lights, don't nag for icecream.

Save and Spend - reward yourself and your family by setting goals and then having a treat: a family experience. Experiences are more valuable than stuff.

Thanks so much for all of these- I'm really glad I started this thread as I feel much more motivated ! I definitely want to be able to do things when I am older and also be able to help my DC if they want to go to uni / buy homes.
Although my full time job doesn't start till September I've done my online shop and bought myself nice materials to make my lunches for the days I work this week. Trying to get into good habits from now!

If you really want to save 'pay yourself first', which means as soon as you get paid, transfer the money you want to save into a savings account. This works because if you try and save later in the month you'll have spent more money thinking you had plenty left to spend. Even if it's only a tenner, paying yourself first gets the money out of temptation's way.

OP, you have received some good advice here.
On a different note, may I suggest you look at why you need the instant gratification buying a dress/shoes etc. on a whim.
Have a good look at your wardrobe and see what else you need. Fair do if you actually need new clothes, but if you have a full wardrobe, have a cull: what fits, what doesn’t, what you love/hate etc.
As a teacher you need to be presentable, chuck a hoodie and some leggings on is not going to cut it. So look at some sort of system/uniform you can rotate/mix&match. I wear dresses, 80% of them are navy/black/grey, I accesorize with scarves, jewellery etc. It can be done.
I also buy clothes twice a year, in the sales, but high end, items that are eye watering even in the sales. But I don’t mind, I know they’ll wash well, fit well and make me feel good.
So rather than spending £20-30 here, there and everywhere, I’ll buy a couple of dresses at £150 down from whatever, a pair of shoes at £150 down from whatever, you get the gist. Yes, with my latest £40 I could have bought 4-5 tshirts in H&M, but I bought one linen one from White Company that looks, washes and fits amazing.
There is a lot to say about delayed gratification, if you save for something you’ll cherish it more.
HTH

My top tip is take your packed lunches, refillable bottle for water and leave your purse at home, just leave it! When I go to work I go to earn it not spend it.

I have no spend days too, so a work day is always a zero spend day.

It's not much BUT my goodness it adds up, I squirrel away any 50p pieces and £2 coins into a pot whenever I get them. When I have a tenner or 20 in coins, I put them into a little account. Last year I saved nearly £400 doing this. Pretty much paid for Christmas.

I'm a big saver, always have been so it's easy for me, but I could go mad spending fortunes, especially on my kids, but I don't.

I set up 3 accounts and when I get paid I have a certain amount that goes into an account for outgoings bills mortgage etc, 1 for savings and 1 for what's left that I can spend and not worry about overspending and getting into more debt. I snowball my debts from my savings account so I've recently paid off one debt only another 2 to go!

I know I could pay more but my debts are on 0% and I shift them if I run out of time. I'm not the most savvy saver but it works for me and I don't feel the pinch too much.

Another vote here for YNAB (you need a budget). It has totally revolutionised the way I think and behave with money, in a way that many, many financing and budgeting books never had. Since using it (only since September) I've not been into my overdraft, have paid off my credit card, and have actual savings. It's BRILLIANT. Good luck OP