Am I saving too much?

[Pensionpot123]

Hi all,
I'm always a bit concerned that I don't splash out - I am very frugal....am I too frugal?

Household income ~£100k in West Scotland. Wife and I are mid 30's.
One DC - 6 months.
Value of house - £600k, mortgage £200k with £50k savings. Plan to pay mortgage off in 10 years.

At the moment our pension is looking to be approx £76k/yr combined exc. state pension.
Long term plan would be to downsize on retirement to house maximum half the value of current home (if nothing changes, profit £300k from sale).

Should I be spending more? Am I leaving myself too much for later life?

At the moment we -
Don't eat out
Go on 2 good holidays a year (Florida, cruise, New York etc)
Don't do hotel breaks
Get a takeaway every ~3 months
Change car every 2-3 years to a new-ish budget car (Ibiza, Fabia, Clio etc)
Keep all other outgoings to a real minimum

Any opinions or serious advice about pension is welcome!
Realise there may be people who earn a huge amount more or have a much bigger pension pot.

Glad to hear it - although it sounds as though you don't go to the pub anyway... You just need to get your wife a proper Christmas present now!

@Pensionpot123 Good point nowadays. My 2 were at nursery before there was 30hrs free from 3yo

😂 I wouldn't be a regular, put it that way but would be the first to put my hand in my pocket. I'll make sure I get my wife a flake in her ice cream on holiday...honestly, she'll wonder what has come over me!

I'm not saying it wouldn't happen...and goodness knows how folk afford twins..but thankfully even if it did happen to someone it would only be very short term (and very expensive)

This is EXACTLY what I have been thinking
No way on earth that someone that is this frugal to the last penny and prides themselves on bring financially savvy needs to come to check if they have enough for retirement.

To be honest, your life sounds very much like a retired couple now, even down to the cruises so it shouldn't be difficult to assess what you need.

You're the 2nd person on this thread to accuse me of being old for going on cruises 😂😂. You don't know what you're missing out on!

I am well prepared financially for just now - but no-one teaches you about the future and how much you'll need. To put it into context Standard Life say to maintain my lifestyle I'd need £38,000 per year pension.

Well . You sure are Scottish. ( apologies for using a lazy stereotype but as they are apparently allowed on mumsnet......)
And don't get me started on the cruises in your 30's. You sound retired ( off on a cruise with your pension pot sorted) yet you have a new bub. Bit tragic all round really.
Why not lash out on a takeaway every 2 months pet. See if the world explodes.
This has got to be a wind-up. Does the "DW" get a say in all this? Don't answer . I don't want to know.

You can accrue your holiday but contractually can only take the accrued holiday out of term time, when you would already be on holiday. It’s virtually worthless unless you leave after maternity leave (and only then you get it if your lucky and you don’t owe then the enhanced part anyway)

You know you really can't have too much money at 60. It's not as if your life is over. Scrimping is grim especially if you are older. My husband has got a health issue in his 60s and we are grabbing the chance to travel now and enjoy ourselves and with plenty of financial security. BTW most people don't downsize to a house worth 50% of their current house. Smaller doesn't always mean cheaper if you want low maintenance and nice finishes in a convenient safe location close to shops and facilities. I have an ancient but very reliable and economical to run vehicle. I live in a very expensive four bedroom plus dining room and study detached house with a big garden in a lovely suburb with no mortgage and have put two children through university. We eat good quality fresh food and lean free farmed eggs, chicken, pork etc. I also give generously to a small range of charities. We also have a very spoiled cat who costs more to feed than most small children. We have a weekly cleaner. I mean I could go out tomorrow and pay cash for new flasher car but it's not important to me.

We scrimped when we were younger. The kids wore secondhand clothes and had largely secondhand toys and furniture. One of them tried a private school but told us most of the other pupils were awful with some mad form teacher and we ended up having to get extra tutoring in maths to get to our local state school standard. (The puzzled tutor told us it was the easiest tutoring he'd ever done with a really bright academic child who learnt really easily but was strangely behind in maths.) They had language and music classes as well as learning to ride horses. We overpaid our mortgage and paid it off decades ago. I told my husband we weren't wasting money on paper towels and freshly squeezed orange juice till we did. Yes, health issues can crop up as you get older but being poor doesn't make it better. We have always prioritised health insurance and private care. I've had elective surgery such as fixing my bunions without worries about waiting lists. When I got a skin cancer on my face a pathologist dermatogist spent hours working on my face to be sure they had clean margins and rearranging skin to give me an almost invisible scar hidden in my hairline

My husband largely retired at 60 and spends a lot of time playing golf. I'll probably work on till 65 because I quite enjoy my job. Also knowing I can quit at any time is a comfort.

If you are both happy with your choices keep on with it. I mean I wouldn't ever contemplate changing cars every 2-3 years but if it makes you happy, why not? A financially secure retirement probably uncrinkles my face more than my 6 monthly dermatologist visits.

Ps. just to keep the racial stereotypes going I am part Scottish but mostly Irish!

OP, I struggle slightly with a similar balance question - in my case, it's a bit different because I had a very difficult childhood and could have only dreamed of being able to live at home with minimal rent until 24! However, it has given me a compulsion to save as much as possible and not waste money to avoid ever being poor again (as in, not knowing how we were going to pay the bills poor) and as my income has increased it's been very difficult to allow myself to enjoy it.

The problem with that, is my dad dropped dead of a heart attack at 54 so never got to retire/ enjoy life/ etc. I try really hard to balance those two things. I would also say (and sorry, because I think you've got unfair stick on this thread for wanting to build financial security) that you need to have a really honest conversation with your wife about whether she is happy, about whether you're happy - for example - to say no to your child going to the cinema/ out for pizza with friends every time in a few years and endure the social consequences of this (tween girls are BRUTAL). If not, your mindset will need to change, so start working on this now.

As with everything in life, it's about balance. The 5 whys might also be useful for you to think about.

Exactly what I thought too.

That's an unbelievable amount of earnings, and I almost think the OP started this as a 'stealth boast".

Then stay frugal, but drink more. 😂

I'm very much of the "there are no pockets in a shroud" school of thought. Life is to be enjoyed, not endured.

That said, we have some non negotiables. We save a lot for retirement (I put the IRS maximum into my workplace retirement savings) and my husband does too. Our house will be paid off in retirement, and we have three kids who are (presumably!) college bound and as we are in the US, this will cost us around $300k (not a typo.)

We are high earners (around $300k gross p.a.) but once we've put aside retirement and college savings, we enjoy our money. We are not profligate but the idea of never eating out and only getting a takeaway once a quarter makes my hair curl. We love to travel, stay in nice places, eat good food, go to concerts/the theater.

I recently calculated that if we continue our retirement saving as is (not increasing it with pay rises or when our kids are done with college) we'll have about $100k a year. Also, social security benefits here are very generous (we'll get about $6k a month between us.)

Our financial advisor has advised us to put away as much as can but we prefer to enjoy our lives when we are healthy enough to travel and when our kids are young enough to still want to come with/are unencumbered by other obligations.

Your hair shirt existence sounds a bit miserable to be honest. It wouldn't be for me.

This post has absolutely baffled me... why are you trying to prove how much you're earning when the information is literally on google? Are people forgetting that a world exists outside of England? My husband is a classroom teacher (also mid 30s) in a state primary school and is on a little under £50k a year and takes home around £2400 ish every month and every month so I don't see why that bit was so unbelievable. I would also imagine it's cheaper to holiday when the English schools haven't broken up and the Scottish schools have. Plenty nurseries also accept term time placements. I guess for people to believe you you'll probably need to just start posting screenshots of your online banking 🤦🏼‍♀️
Anyway, can't take your money to the grave. I think it starts getting difficult to spend money when you've been so strict with saving but you need to find a balance that works for you. I think if you're finding that you're not allowing yourself to do things that you could easily afford then you need to relax a bit.

My mum died of a cardiac arrest at 61. Maybe it clouds my views. I enjoy life because saving it all for retirement doesn’t always add up. No one knows if they will be healthy enough or even alive to enjoy it!

I do have an NHS pension. I do save. I plan to save more once the mortgage is done.
But we go out, I go to concerts that I want to, I watch shows. A fancy cocktail when out for a drink. We go on holiday. We have odd hotel breaks. A takeaway if we fancy.

It’s not extreme spending as I’m now classed as a below average earner but I honestly don’t see the point I living for 40 + years working and not enjoying life at all just so you have a bundle of cash for retirement.

Everyone has different views of course in what they enjoy of life. I don’t spend £150 on sky for example. We use Netflix etc. I do r have a gym membership but I do have some workout equipment at home.

I know you have had grief but you and your partner need to look at what you want from life not just retirement which at our ages is further away and for less time than generations before us

I don't lash out on takeaways more often because they just don't bother me and to be fair I don't really enjoy them... Normally have them out of convenience rather than planning.

Good point - thank you!
Sorry to hear of what you've been through too - appreciate your honesty and contribution

Yes, it's not quite as I planned either 😂.
You're absolutely right... I spent my younger years being so disciplined with money and if now seems a bit foreign to spend it!

Do you think you are capable of spending such a large pension? Clearly you are on top of your finances and have an in built money saving attitude. But decades of saving by then probably a huge pot of savings and investments would you know or be able to spend it. Or is it going to your children.

@andIsaid - I was just about to suggest Mr Money Moustache! Link here www.mrmoneymustache.com/blog/ OP - welcome to the world of FIRE. It was too late late for me but a combination of the MMM principles and YNAB helped us to make sense of saving and budgeting.

Thank you 👌 there will come a day where I hear "dad can I have money for" and I can already see the face I'll make 😂 no doubt they'll get the money (within reason!)

That's not true for us but thanks!

That's exactly my question.... And as much as I love DC, do I really want to work all my life for them to be handed a huge amount whilst I scrimp. 😂

Then I would re calibrate your spending, go out and buy a coffee that costs £3/4.