How Much do you Save?

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  • stoozie1
    stoozie1 Posts: 656 Forumite
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    Apologies Jamesd, I think from your response that I have miscommunicated. I was aware from your other posts that you have a modest lifestyle.

    I think my regular 'emergencies' requiring liquid investments would be health-related (of my family members), if I were wealthier. So 35k-40k to bring forward someone's operation, if i had a investment pot of 750k would be something i would want to do. I appreciate that the other 40k emergencies discussed above are less likely and less expensive or can be offset in other ways.

    Useful discussion. Many thanks all.
    Save 12 k in 2018 challenge member #79
    Target 2018: 24k Jan 2018- £560 April £2670
  • jamesd
    jamesd Posts: 26,103 Forumite
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    You didn't miscommunicate, I just got a bit evangelical about the benefits of saving a lot. :)

    Yes, health issues even in the UK can cause a lot of spending, particularly if you want things that the NHS doesn't provide or doesn't provide as early as would be beneficial.
  • Anno88
    Anno88 Posts: 17 Forumite
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    Thank you Gingercordial for detailed advice and thankyou James's for inspiration!!! If I could achieve what you have in 10 yrs.... ....
  • Martinslovechild
    Martinslovechild Posts: 1,560 Forumite
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    The most important point is to take away from this discussion is that saving something is always better than saving nothing. Clearly there are always people who are better able to save, either because their incomes are higher or otherwise, but even those people with modest incomes who deposit £10/week into a savings account or ISA will accumulate more than £500/annum.

    I don't think it matters to the original poster if I am saving either 5%, 75% or nothing of my income, the important thing is to set a target which is both achievable but also slightly painful, i.e. you may want to think about cutting back on certain discretionary purchases - or cutting certain ones out altogether.

    The rule I follow is one of Albert Einstein's, who said: "Compound interest is the eighth wonder of the world, those who understand it will earn it, those who don't will pay it."
    Mortgage Feb 2001 - £129,000
    Mortgage July 2007 - £0
    Original Mortgage Termination Date - Nov 2018
    Mortgage Interest saved - £63790.60
    ISA Profit since Jan 1st 2015 - 98.2% (updated 1 Dec 2020)
  • pricew1970
    pricew1970 Posts: 1,061 Forumite
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    Crystal_Pixie wrote: »
    I realised I missed the "k" off! Indeed I wouldn't get out of bed for that amount...

    You wouldn't afford a bed on that amount ....
  • savings_my_hobby
    savings_my_hobby Posts: 363 Forumite
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    50% of net income, anything extra is a bonus.
    Earn, Save and Achieve
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    Save to spend. Hadn't had a need to borrow (other than mortgage) in over 2 decades.
  • elephantrosie
    elephantrosie Posts: 467 Forumite
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    longleggedhair- inspiring post!
    Another night of thankfulness.
  • Bravepants
    Bravepants Posts: 1,503 Forumite
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    stoozie1 wrote: »
    This is very interesting. So if you had a £40k emergency, this would be ok because you could draw on your investments without worrying that you could have done so at a bad time, growth-wise?

    I should think that if I had a £40k emergency my investments returns would be the least of my worries!
    If you want to be rich, live like you're poor; if you want to be poor, live like you're rich.
  • elephantrosie
    elephantrosie Posts: 467 Forumite
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    jamesd wrote: »
    I could pay all of my regular living costs and have change from £12k. :) I set my could retire income target at about £18k because that was then median average retired household income, it's more like £22k now.

    It's worth a read of the book The Millionaire Next Door. It does a good job of explaining and illustrating the differences between everyday US millionaires and living a millionaire lifestyle.

    I'm not a millionaire in US dollars or pounds, though if I don't spend more I might be a pound millionaire in ten to fifteen years or so even if I had no job between now and then. I'm idly contemplating doing it just because I can, courtesy of having saved so much, and because I never dreamed, coming from a background of poverty by UK standards, that I might.

    how can you be a pound millionaire if you dont have a job in between now and then? is it through compound investment?

    as for myself, i save around 65% ish of my take home salary (post-NI contribution and tax). I still wish i have a larger pot of savings. i started working FT in my mid 20s though. prior to that i was a FT student.
    Another night of thankfulness.
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