Balancing conflicting spending concepts

[TheDefiant]

I hope I'm going to explain this well. I grew up in a family with little money and some unknown level of debt. My childhood and teenage years were influenced by a parental death and then an alcoholic step parent.

Remaining parent did best they could "wasted" some money (in my eyes/opinion) and didn't have the happiest of lives. This parent has also died with a large bucket list unfulfilled.

As a teenager I lived with housing insecurity.

My DH and I have had no family help, indeed we've supported other family members financially.

We've done our best. We have a mortgage but still have 20 years to go (this will take us into our 60s and I'm so worried about that). We overpaid when we could and now have about 50% equity in the house. We plan to stay here as long as we can. We both have pensions. Not massive, but not tiny either. The state pension remains an important part of our retirement plans.

Apart from mortgage, we have very little debt and all of it on 0% (I think less than £4,000)

We have some savings. For emergencies. Not the sort I'd want to dip into and not the sort to make any significant difference to our mortgage or pension.

For the next 8 years we'll be supporting DC through Uni. 2 x DC, Scotland so 4 year degrees. One will finish as one starts. We pay a small amount each month into a pension for them and I've set myself a goal of them having £10,000 each for end of Uni for a house deposit (that's hopefully what they'll use it for).

My conflicting spending wants stem from parent dying with unfulfilled bucket list wishes. Small to large (getting a tattoo, visiting family around the UK, a trip abroad).

I've never left the European continent. I'd like to visit Canada or New Zealand. Maybe New York.

I'd have to take on debt to do any of that and I don't want to!

How to people balance wanting to spend money and experience things with not wanting to get into debt and having a secure, sustainable lifestyle?

I'm torn between saying "fuck it, let's all go to New York" (we've always restricted ourselves with flights for both environmental and financial reasons) and being terrified of getting into more debt with the long term consequences of that.

We won't ever inherit anything. So it's all on us and our planning.

We both have jobs that are secure for now but both in industries where that could change in a heart beat.

I have savings pots but all ear marked.

If I was suddenly given £10,000 should I spend that on a trip? Or be sensible?

What would you do to balance conflict spending/saving/security wants?

I know this isn’t exactly what you are asking. But if you are getting the kids through Uni and helping them with a flat deposit , you don’t need to also save into their pension.

I think the first two are more than most kids get and they should be able to save for their own pension. That would free up a little cash for your own bucket list.

That’s fine if you are rich and can afford it without sacrificing so much yourself. You should be able to go on a trip around the Uk to see family, for example.

Also, I would NOT give £10k unconditionally to my kids , so I’d not save it in their name unless it’s in trust until they are 21 and then I’d move it .

Id not be “ hoping “ they spent it on a flat - what if they blow it on a fancy holiday for their mates or a car while you have scrimped and scraped to save it over years ? That kind of gift from me would be conditional - I’d need to approve where it’s going . I don’t care if anyone thinks that’s controlling - it’s my money.

If I won £10k I’d spent it on several cheaper holidays, not just one very expensive one. But that’s just me, I have more annual leave than most people.

Are your kids taking the loans from SAAS and / or working weekends / holidays? If they are doing both of these they shouldn’t need a huge amount of help from you ( unless they are in Edinburgh / St Andrews where rents are very high).

I don’t think you should be saving every penny for their future if they are dossing around all summer from May to September.

Not sure of any of that is helpful.

Useful post @S0CKPUPPET, thanks 🙂.

I'm also trying to think about my financial goals across both the short and long term. I watched a Meaningful Money video recently, and he made the point that you shouldn't not do things now because you're saving everything for the future. I think he gave the example of getting £10k unexpectedly, and should you splurge or save it - he suggested you could do both, maybe £2.5k on a holiday now, and save the rest.

I'm trying to get the balance right between saving for a new house, saving for DS at university, and saving to bridge a possible retirement gap between different pensions kicking in.

The amount I/we save in their pension is teeny. £20 pcm each. I'm going to keep doing that.

I can't put their money in trust as we've used their JISA (best interest rate) so once they reach 16 it's theirs. It's a combination of savings from us and monetary gifts from other people over the years. I really can't put restrictions on how they spend it. We've had lots of conversations about trying to "create family wealth" and that a house deposit is important as part of that goal.

Yes taking loans. Yes they work. Have saved £2,500 for first year.

I don't want them to miss out on Uni experience the way I did. Stayed at home and worked 3 jobs in order to pay my parent crucial dig money.

That's interesting about the example for spending £10,000. I'd want it to be for all 4 of us and we're three adults now so expensive (wouldn't manage for £2,500)

I'm just so fed up being the sensible one. I want to have a go at not being sensible. Ugh.

Yes it's the "shouldn't not do things now because saving for the future" tension that I'm experiencing right now.

My mum died suddenly when I was very young and she not yet 30.

I watched my Dad not do things (in later years) due to funds. He did have 2 x once in a lifetime trips to 2 continents though so 🤷🏼‍♀️. I can't do that now! 😆

I'll just have to keep being sensible and hope for a lottery win. 🤞🏻

Yes, IKWYM. I'm quite sensible too, but then there are holidays that we're not having etc. I want to try to get the balance right between saving for the future, but also enjoying now.

I am camp sensible. I've been made homeless several times through no fault of my own. It's horrible, I would rather live debt free. We downsized to be mortgage free. It wasn't a huge place,a 3 bedroom semi, to a 3 bedroom unmodernised cottage. Did it up as we could afford, ourselves. We don't have credit cards, I had one 49 years ago, for essentials food,petrol, bought a bicycle with seat for ds. Lost my job,banks weren't reasonable in those days. I've never had another one. Financial security means far more to me than any holiday or country I would like to see.

Why don't you and your husband agreed on a trip I na few years time, once your youngest is at university. Then you only need to fund the two of you going and can go outside of school holidays. I am generally in the captain sensible camp, but occasional fun won't bankrupt you. I totally understand that you don't want your kids to have the childhood you had. It sounds like you have set them up nicely, so time to focus on yourselves once they fly the nest.

@SprigatitoYouAndIKnow we talk about that all the time. We will do it in some form. (DH and I taking a trip).

We also try and fit in smaller, cheaper experiences/moments all the time.

I think I want to have some unbridled craziness and spend without a care in the world.

That will never be me though!

If I ever come into money I think I'll take an amount (£5,000?) and go crazy. That's what I'll do. 😆

They can live away from home, have the Uni experience and still have a part time / summer job on most courses, esp if they study in a cheaper city.

My two only do summer jobs because of their courses and they still earn good money . One does security /car parking / hospitality at events , he just earned nearly £1000 working 6 long shifts in a week at the golf.

@S0CKPUPPET DS fully intends to get a job during term as well as working when he can over the summer.

I still anticipate having some sort of monthly commitment to him. At this time not sure of the level of that. I'm hoping less than £250 per month.

We'll know by December I expect.

18 Summers - with children you have that long, sometimes less, until they go off on their own and/or don't want to come on holiday with you. So you don't want to go all in on saving for the future without having some to enjoy today.

I can't think of which video you refer to, maybe it was a podcast episode such as Big Mistakes: Not Spending Enough https://meaningfulmoney.tv/BM9

If DS is off to University, then how much help does he need? You may be able to put a figure on that... such as you will give him a certain amount each month and beyond that he needs to be working to have money.

You may not be able or want to work until retirement age. So creating that bridge fund to enable you to work less in the run up to retirement you may want to prioritise over giving DS more money to spend at Uni.

Look at what is likely going to happen over the next couple of years. DS goes to Uni, so how is he funding that? What financial help might you be able to contribute. With him no longer living at home, does that mean you could downsize property, move somewhere else as not tied to being near a particular school.

We won't downsize.

We didn't really have a big home to begin with so downsizing isn't something we're considering until really old and even then I'd hope we can stay here (our neighbours are in their 70s and still on top form so I'm hopeful we will be too)

Our house has always been a squash and a squeeze with 2 DC but we made it work as didn't want to take on a bigger mortgage.

I have the smallest house of all my friends.

Anyway DD still has 4 years left of school

I grew up with financial insecurity as my Mother was widowed when my stepdad died, I was 13 at the time. I understand the sort of fear financial insecurity gives. DH was the opposite and grew up incredibly privileged.

You have been more than generous and been very sensible with your income. But you do really need to separate the assisting children with having some sort of life. You get one and then that’s it. Because DH didn’t have the fear of money that I had he was insistent we did do stuff. I probably would have done less as rather like yourself.

Don’t go in to debt for a holiday but please do plan a decent trip for yourself and your DH. I am in a far better financial position to you and have put exactly zero in to a pension for my DS. DS will be given money for a house deposit, amount to be determined and thrashed out by DH and I who on a fundamental level completely disagree on the amount, DS has no idea at the moment. He is 23 on a degree apprenticeship and is saving hard for his deposit.

I am the saver, DH is the spender so we have to find a balance.

I agree you don't need to help your DC with a lump sum at the end of Uni.

I wouldn't worry too much about the mortgage, the last few years always feels so much easier than the first few. My advice would be to up the payment every time you get a pay rise, by say 50% of the pay rise. Also if interest rates go down, continue paying at your previous level. We did this, plus paid off some lumps with redundancy payments etc. and the last few years was seriously reduced.

I like a spreadsheet; we have a 'lifetime' financial plan and the more I plan, the more I permit us to spend, because it is in my plan and I know what we can afford (& what we cannot). It's about control I think and knowledge.