Why do people save?

Nationwide8 · 18 November 2017 at 2:28PM

It's interesting because you have two children with exactly the same upbringing being totally opposite about saving or spending

For me I'd class myself as a Saver and I think that's because 100% the buck stops with me and always has,no family get outs,no possible back up ever in a financial sense from anyone with anything.
In my younger years the majority of money left after paying bills,food etc went to pay off my Mortgage first ( secure the roof over your head,ill health,lost job can happen to anyone ) and then after that to supplement a pension so I could get out of the rat race ASAP ( even though you're talking working decades to do that ) and not be a slave to a job.
I still had some nice holidays *spent* money on non essentials but always saved to retire "early" and not be dependant on a salary.

Do think it depends a lot if you have a back up of family money *cushion* No matter if it's not assumed you have. You KNOW deep down if you lost your house ie through losing a job or not working because of ill health or got in a financial hole some family back up would step in either with somewhere to stay or with ££££

It also boils down to whether you will sacrifice the now for the future Wrongly maybe I see a lot of *now* with instant gratification being the preference.

RG2015 · 18 November 2017 at 2:41PM

Nationwide8 wrote: »

It's interesting because you have two children with exactly the same upbringing being totally opposite about saving or spending

Tell me about it, and it's not just with financial issues.

At least the spending one has never been in debt and at the moment has no plans to acquire a credit card. And yes, I know this is not the best attitude for anyone considering a mortgage in the near future but you can only give so much advice before they tune out.

RG2015 · 18 November 2017 at 2:51PM

Puddylove wrote: »

I do really feel for people who end up in financial trouble though - it's often simply bad luck. It could be any of us.

Thank you for sharing this.

You have seen both sides of the coin but your past does appear to have given you the motivation to work your way into your current favourable financial position.

Eco_Miser · 18 November 2017 at 3:02PM

I save because my income exceeds my expenditure.
I then invest because my savings exceed my likely need for cash over the next few years.

Having those investments meant that I could treat redundancy as early retirement.

And now that I'm fully retired,with all pensions in payment, I wonder if I should increase my expenditure to match my income - but on what?

justme111 · 18 November 2017 at 3:48PM

Eco_Miser wrote: »

I save because my income exceeds my expenditure.
I then invest because my savings exceed my likely need for cash over the next few years.

Having those investments meant that I could treat redundancy as early retirement.

And now that I'm fully retired,with all pensions in payment, I wonder if I should increase my expenditure to match my income - but on what?

Here are some ideas -
Health or appearance enhancing options- find the best doctors and pay them for comprehensive tests , early interventions, trearmentsb targeted for you and not just picked as a first line because they are the cheapest and other things that make a difference and NHS not only can not afford but would not even think of due tobit having to be cost effectuve in a population basis. With many conditions people are basically tild to luve with them while they can be helped if you fund right medical settings and pay for them. Chose the best for your teeth and eyes; you may have sime back or joints problems - osteopaths, physiotherapists, chiropractors do not come cheap as well. sport and training with an option of a personal trainer. If you have any sport hobby like squash for example organused squash holidays abroad. Endles array of beauty treatments that will help you and your other half to look the best you can - why would not you want to live your life looking the best you can or spend money on your significant other looking the best they can ?
Only organic ingredients to cook with, the best places to eat out can take care of a good chunk of that surplus money you have.
High quality clothes
Travelling
Anything related to your hobbies - I am sure any hobby could have money spent on it to give you options you did not know existed
I have not even started dreaming about how children cars houses and household appliancesvcan contribute fruitfully and enjoyably to emptying your pocket.
:T

Flobberchops · 18 November 2017 at 3:54PM

tibbles209 wrote: »

I save for my children (who do not exist yet - planning to start trying for a baby in 3 years or so). ... When I read this back it really does make me sound very strange but as cheesy as this sounds I feel like I was just born to be a mum, and my not-yet-existent babies are already the most important thing for me.

Not strange at all! Becoming a dad was the kick up the backside I needed to stop living paycheque to paycheque and to take a keener interest in my financial security and my own (and collectively my family's) goals.

I think saving for children is fantastic - it feels great to set a savings goal 18+ years into the future and then stick to it. Money was always a sore point growing up as it seemed my parents could never afford the little luxuries (and sometimes the necessities) my peers all took for granted; getting my finances in order is my little act of defiance towards them. In the nicest possible way, you understand... I'll probably be the one paying for their care in 20 odd years, after all.

RG2015 · 18 November 2017 at 4:11PM

Thanks for all of your replies and sharing your experiences.

I retired early with a comfortable pension and some savings. I have some modest investments (initially PEPs now ISAs) from the 90s but they were gifts from the grandparents for my children. I just left these for 20 years and only recently have been monitoring them. As they have done well and continue to grow I have never altered them.

Now I just make sure that I have the best cash interest rates and that all regular and capital expenditure are both good quality and good value.

As inflation now is eroding my savings I wonder if I should invest some of them. My current position is that I would really only be doing it to make a profit which I do not actually need. Yes, I know I am losing to the tune of 1% with inflation at 3% and my interest at 2% but as long as this does not continue for too long it is not a great concern.

So finally I find myself in the same position as Eco Miser and thinking that I really need to be spending more. It would never be the spend, spend, spend of Viv Nicholson but perhaps it could be works of art that both give pleasure and appreciate in value.

binaryuniverse · 18 November 2017 at 4:32PM

At present I am saving for two things:

1) Enough money so that, should I find myself out of work, I can support myself for at least 6 months, and not have to deal with the Jobcentre.
2) Deposit on a house.

I'd say I'm about there with target 1. Target 2 is pretty much a case of the more, the better. Even if/when I actually buy a house, I'll keep putting money away ready for the next place. Although I then may start investing that cash, rather than saving it.

It's quite nice not living payday to payday. I spent a lot of my 20s on minimum wage, which was a struggle, and felt like I was living to work, rather than work to live. Having money in the bank means I can actually live a little.

SamSam17 · 18 November 2017 at 4:56PM

For me its peace of mind. I don't have much saved now but before I would put away 70% of my savings in investments and 30% in savings account. Its so much easier to deal with emergencies, loved ones needing little help when you can do something about it.

I'm hoping to get back into saving next year and have learnt here you should have 3-6months worth of expenses saved so that will be my next aim.

Linton · 18 November 2017 at 5:22PM

Whilst working the purpose of saving (mainly investing) was to gain control over my life. Having significant savings enabled me to buy what I wanted when I wanted. It minimised the stress of struggling to deal with emergencies and of living in fear of redundancy. Long distance holidays were also important as they changed my whole perspective on the world. Finally serious saving enabled me to retire at a time of my choosing once work became a chore.

Perhaps paradoxically, being able to buy anything one wants seems to control one's wants. After all you can always buy it tomorrow. Just having more "stuff" provides little attraction.

Now in retirement I am in a similar position to the others - it seems a pity not being able to spend to one's means. This is partially ameliorated by being able to furnish, decorate and maintain the house and garden properly. In theory the basic purpose of continuing to focus on save/invest is to guarantee long term financial security. However to be honest the main reason is because it's interesting.

Why do people save?

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