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  • FIRST POST
    • Cotta
    • By Cotta 3rd May 17, 9:48 AM
    • 2,392Posts
    • 962Thanks
    Cotta
    How Much do you Save?
    • #1
    • 3rd May 17, 9:48 AM
    How Much do you Save? 3rd May 17 at 9:48 AM
    Hi All,

    I'm always interested in how much people save and if there is indeed a specific amount? Do people set X amount aside each month or is it a case of setting aside what you can afford after everything else has been paid for?

    I've just started to save after four years of living payday to payday, at the moment I am saving £200 per month into a Regular saver account which pays 5%. This £200 represents around 10% of my net salary. On top of this I have £2000 in my current account which is essentially for emergencies.

    Interested in your thoughts.
    Last edited by Cotta; 05-07-2017 at 3:54 PM.
Page 1
  • jamesd
    • #2
    • 3rd May 17, 10:36 AM
    • #2
    • 3rd May 17, 10:36 AM
    I have saved whatever is left after other spending. For the last eleven years it's averaged more than 60% of my net pay plus gross pension contributions. Because of investment growth the current value is a bit over 90% of my total since April 2006. That level of investments means that I can now afford pension contributions and VCT buying to eliminate most of my income tax bill and have something over £16,000 a year in investment income, mostly from P2P.

    I don't have a problem not spending much because I was used to life on benefits and low pay. Some people might need a set target instead. Just the different ways that people think about money.

    You're way earlier in the process than I was back then when I'd just finished debt clearing but it's a good thing to be doing. Try not to be put off by those like me who are much further along the path than you are, we mostly started from a similar zero point.
    • Bravepants
    • By Bravepants 3rd May 17, 10:48 AM
    • 224 Posts
    • 254 Thanks
    Bravepants
    • #3
    • 3rd May 17, 10:48 AM
    • #3
    • 3rd May 17, 10:48 AM
    It depends on what you are saving for.


    Your emergency fund is probably more important to get sorted first, and it looks like you have done so. A rough guide is to hold readily accessible funds to the equivalent of 3 to 6 months of necessary expenditure (or more depending on your job security, or whether you have a working spouse etc.). I have just stashed half my emergency fund (total fund currently £5k) into a Nationwide Flexdirect account, and the other half into a short term bond fund in my ISA.


    If you are saving for retirement, the younger you start saving the better, and the less you need to put away on a month by month basis. For retirement think half you age as a percentage to put away from your gross salary into a SIPP perhaps. You might want to do this on top of your company pension. You won't be able to access your SIPP until your are at least 55 though, but that's a good thing as you won't be tempted to spend it!. There are also perks like 25% tax free lump sum, and if you are a higher rate (40%) tax payer while working, you are likely to be a 20% tax payer in retirement, so you get the 20% "bonus" on top.


    I wasn't much of a saver when I was younger, as my salary was quite small compared to nowadays. When I first bought a house my mortgage would take a substantial sum out of my salary, but I always kept my mortgage to about a third of my monthly income, which is a good rule of thumb. Typically you see when your retire with a company pension the pension pays about two thirds of your working salary (if you have maxed the yearly contributions), and by then you should have paid the mortgage off - so your standard of living shouldn't really drop. Of course that's the theory!


    We have already paid our mortgage off, but we live in a modest house, as we have other things in life other than tending "Bravepants Mansion".


    I'm 49 at the end of this month and from age 40 I have been paying 10% of my gross into an AVC with my company pension. I have just increased this to 15%. I'm in the 40% bracket so it is worth me doing this.


    I am also trying to live on half my net take home salary and stash the other half. I currently have £500 per month going into an S&S ISA, but I have also made lump sum payments into that over the last year. I will increase to £1000 a month in a month or two once I have paid for some work to be done on our house. I also have a few hundred extra staying in my current account for sundries. If I get too much in there I will lump sum into my ISA.


    I would like to retire at age 55, but this depends on how my investments perform! I get roughly half my company pension from age 60, so I may phase my retirement to fund the gap between 55 to 60.


    You see how deciding how much you save really depends on your plans for the future. The best way to save automatically is to spend less, so don't worry about saving, just spend less. Of course the old adage is to "pay yourself first". When your salary comes into you bank account, the first standing order should be out to a savings account that you don't touch.


    Good luck!
    • warwickbears
    • By warwickbears 3rd May 17, 10:54 AM
    • 19 Posts
    • 5 Thanks
    warwickbears
    • #4
    • 3rd May 17, 10:54 AM
    • #4
    • 3rd May 17, 10:54 AM
    Hi All,

    I'm always interested in how much people save and if there is indeed a specific amount? Do people set X amount aside each month or is it a case of setting aside what you can afford after everything else has been paid for?

    I've just started to save after four years of living payday to payday, at the moment I am saving £200 per month into a Regular saver account which pays 5%. This £200 represents around 10% of my net salary. On top of this I have £3000 in my current account which is essentially for emergencies.

    Interested in your thoughts.
    Originally posted by Cotta

    By and large, it depends on individual circumstances. I happen to think your way of saving is a good way to go - that £200 per month is now effectively a bill which you budget for, but with the huge benefit of ending up with the best part of £2,500 at the end of the 12 months.


    I'd even challenge you to consider whether £250 per month could be achieved? You might forsake a few little treats along the way, but it'd give you another £600 in a year's time.
    • PasturesNew
    • By PasturesNew 3rd May 17, 10:57 AM
    • 59,613 Posts
    • 348,182 Thanks
    PasturesNew
    • #5
    • 3rd May 17, 10:57 AM
    • #5
    • 3rd May 17, 10:57 AM
    I've never "saved" because there's always something that you need the money for ....

    I've tried to always spend less than I earn, allowing the extra to accumulate - but then the car needs MoT work, or something in the house breaks. There's always a bill to pay, or a disaster to plan for.

    I own a house and there's always something that could/should be done to those .... they're an endless money pit, even if you don't have grand aspirations.

    Also, life changes ... circumstances do .... right now, for example, I am "living off my savings" as I don't have enough income to pay the basics, but I'm not worried as I've always lived frugally and have enough pennies squirrelled away to ride this one out a bit.
    • Bravepants
    • By Bravepants 3rd May 17, 10:58 AM
    • 224 Posts
    • 254 Thanks
    Bravepants
    • #6
    • 3rd May 17, 10:58 AM
    • #6
    • 3rd May 17, 10:58 AM
    ....have something over £16,000 a year in investment income, mostly from P2P.
    Originally posted by jamesd

    Wow! At 12% (typical higher risk rates) that's quite a substantial amount of income! You must have lots of faith in P2P to commit the capital required to generate that level of income!?


    I have £8k in Funding Circle, spread over 400 loans or so, to provide diversity. I'm sitting at 6.6%.


    P
    • longleggedhair
    • By longleggedhair 3rd May 17, 11:28 AM
    • 225 Posts
    • 303 Thanks
    longleggedhair
    • #7
    • 3rd May 17, 11:28 AM
    • #7
    • 3rd May 17, 11:28 AM
    I've saved hard for years , and always lived frugally. I'm another person who's never been on a high wage (usually it's been around 20k annually) started saving around 2005 and have managed to reach about £175,000. Now a good part of that is due to investment returns over the past 7 years which have been brilliant and a couple of lucky turns.

    But it wasn't at all that difficult. I have a car and a nice home, but no expensive tastes. I've dropped back to part time work and only pick up about £900 per month so my saving is now down to about £200 per month. But I recon I'm getting about £600 monthly in investment income which I let roll up.

    Modest savings wisely invested can make you rich fairly easily, you just have to give it time and keep at it every month. My aim is to leave work eventually and enjoy more of my free time (I've always hated work!) and that's been my goal.

    The thing overall I have found is the feeling of security and safety having money behind you gives. Both my parents worked hard and earned far more than I ever have but they both wasted their money and never had any money behind them, I was determined never to have that constant fear of job loss etc.

    Keep up the good work and before you know it you'll be surprised with how much you've accumulated.
  • jamesd
    • #8
    • 3rd May 17, 11:50 AM
    • #8
    • 3rd May 17, 11:50 AM
    Wow! At 12% (typical higher risk rates) that's quite a substantial amount of income! You must have lots of faith in P2P to commit the capital required to generate that level of income!?

    I have £8k in Funding Circle, spread over 400 loans or so, to provide diversity. I'm sitting at 6.6%.
    Originally posted by Bravepants
    Right, seldom less than £100k though I expect it to be around £200k in a few months after moving some S&S ISA money. More than £60k of stooze pot helps. I started out in P2P with Zopa back in 2008.

    From investments to stooze pot it just takes time and perseverance to grow the amounts.
    • Bravepants
    • By Bravepants 3rd May 17, 12:23 PM
    • 224 Posts
    • 254 Thanks
    Bravepants
    • #9
    • 3rd May 17, 12:23 PM
    • #9
    • 3rd May 17, 12:23 PM
    Right, seldom less than £100k though I expect it to be around £200k in a few months after moving some S&S ISA money. More than £60k of stooze pot helps. I started out in P2P with Zopa back in 2008.

    From investments to stooze pot it just takes time and perseverance to grow the amounts.
    Originally posted by jamesd


    I just started stoozing again! Got just short of £20k from two cards at 0% over average 2.5 years, with a one off average fee of 2.5%. Used half of the cash to fund renovation of my back yard and parking area, the other half is in P2P in order to "reclaim" the fee! So a free loan to get some work done on the house!
    • Fatbritabroad
    • By Fatbritabroad 3rd May 17, 12:52 PM
    • 160 Posts
    • 67 Thanks
    Fatbritabroad
    I think my saving rate is roughly 27 to 30% of gross income.

    Biggest savings vehicle has always been my pension I put 14% in and have done for years. My employer puts 4% in. Currently about 110k in this. I'm way above hrt threshold now so worth me doing this. I should put more in really

    I then save 400 a month into Saye schemes with work of which 150 is a sip where you get it paid out of your gross figure and after 5 years its tax free.
    Seemed like a no Brainer to me. 250 goes into a standard Saye for 5 years. Currently stand to make about 20% at the current figures

    I then save about 200 a month in to a stocks and shares and a further 200 Into cash. I'll lump sum the s and s as the cash grows. I've got about 17k in easily accessible cash and another 21k in S and s

    I've just put my first 1000 I to p2p with ratesetter to get the bonus. I get a 19k before tax bonus in January so I'll probably put 9 straight Into the pension and either put the rest in shares or p2p

    Increasing your salary helps massively if you can avoid lifestyle inflation. I've always upped my pension Contribution and like others just put money where I can't see it. I now allow myself some treats at age 36 (I lease a bmw420 which is a ridiculous expense and I like my holidays) but I figure I've earned some treats. You're a long time dead. But I don't allow myself to overspend and track my net worth and make sure it's going up not down
    • TheShape
    • By TheShape 3rd May 17, 1:06 PM
    • 988 Posts
    • 735 Thanks
    TheShape
    What I 'save' is simply my income - spending each month, it's never a set amount. Most months I will have 'saved' perhaps between £400 and £800 per month.

    I'm currently on holiday in Canada for my girlfriend's 50th birthday. We won't be spending vast amounts of money but for a 'special' birthday and my first holiday outside of Europe we won't have a limit to the budget. If, when I total up the spreadsheet at the start of next month I find I've 'saved' nothing or indeed spent more than my income then so be it.

    As long as the overall trend over time is an increase in my savings/investments/wealth, that is what I'm aiming for.
    Last edited by TheShape; 08-06-2017 at 7:09 PM.
    • Mrs Z
    • By Mrs Z 3rd May 17, 2:32 PM
    • 862 Posts
    • 847 Thanks
    Mrs Z
    I’m currently saving appx 1/3 of my take home pay; the rest 2/3 are for essentials (mortgage/food/travel/etc) as well as ‘fun’ money. I don’t have a separate ‘emergency’ fund as such but we have a small household pot for bigger expenses (new boiler, painting, unexpected repairs). The savings are a mixture of cash, P2P, S&S ISAs and can be readily accessed in case of emergencies. have also used some accumulated savings to make mortgage overpayments. Although I’m not saving for anything particular as such; my dream is to achieve an early retirement in about 6 years all going well and if that happens, the funds will be needed to bridge the gap between the early retirement and pension (although ideally, I’d like to be working part-time in a different field during that time, but that would be a bonus). Generally speaking, I just dislike, and always have, wasting money and having unnecessary stuff around the house so as a consequence, I get to save it
    • Bravepants
    • By Bravepants 3rd May 17, 5:20 PM
    • 224 Posts
    • 254 Thanks
    Bravepants
    I’m currently saving appx 1/3 of my take home pay; the rest 2/3 are for essentials (mortgage/food/travel/etc) as well as ‘fun’ money. I don’t have a separate ‘emergency’ fund as such but we have a small household pot for bigger expenses (new boiler, painting, unexpected repairs). The savings are a mixture of cash, P2P, S&S ISAs and can be readily accessed in case of emergencies. have also used some accumulated savings to make mortgage overpayments. Although I’m not saving for anything particular as such; my dream is to achieve an early retirement in about 6 years all going well and if that happens, the funds will be needed to bridge the gap between the early retirement and pension (although ideally, I’d like to be working part-time in a different field during that time, but that would be a bonus). Generally speaking, I just dislike, and always have, wasting money and having unnecessary stuff around the house so as a consequence, I get to save it
    Originally posted by Mrs Z


    After not having much savings at all when I was younger because of low salary and high expenses, I've started to adopt a minimalist approach to life. Not strict minimalist, but only concentrating on what is needed, or what brings joy. Not spending to "keep up with the Jones's" or for status symbols etc.


    I too am hoping to bridge the gap between early retirement and a work's pension kicking in, with perhaps part time work! I'd like to re-train as a chef!
    • economic
    • By economic 3rd May 17, 5:31 PM
    • 1,625 Posts
    • 768 Thanks
    economic
    ive averaged 80% saving on net pay. i was earning 100k or so last ten years and i spend very little. now i am retired and i am 34.
    • Ray Singh-Blue
    • By Ray Singh-Blue 3rd May 17, 6:28 PM
    • 322 Posts
    • 419 Thanks
    Ray Singh-Blue
    In the last 5 years my household's net income has exceeded gross expenditure by: 49%, 12%, 20%, 24% and 26%. So that's how much we have saved each year. I just transfer money to the S&S ISA accounts when the current account is looking healthy enough.

    I'm self employed, and have only a rough idea what I will earn. Once a year my accountant tells me what I earned the previous year, and how much tax I'll have to pay. I do however have a very clear idea how much my family will spend, and have a budget. Things have been good for the last 5 years, so I'm making hay while the sun shines - who knows, a bad year might be round the corner.
    • ARandomMiser
    • By ARandomMiser 3rd May 17, 7:27 PM
    • 1,680 Posts
    • 3,494 Thanks
    ARandomMiser
    Thanks to brexit i currently save about 75% of my take home pay (i came out of retirement last July to take full advantage of brexit). I expect to max put my Isa and my pension this year, have just bought a new car and booked several holidays.
    IITYYHTBMAD
    • ian-d
    • By ian-d 3rd May 17, 7:29 PM
    • 367 Posts
    • 87 Thanks
    ian-d
    Just had to look "stoozing" up. Seems like an entirely wreckless way of trying to profit if you ask me!
    • chucknorris
    • By chucknorris 3rd May 17, 7:35 PM
    • 9,061 Posts
    • 13,675 Thanks
    chucknorris
    We don't really save anything, we invest, but more to the point we have reached the time when we should be spending not saving or investing. It is definitely something that we are going to have to address.
    Chuck Norris can kill two stones with one bird
    The only time Chuck Norris was wrong was when he thought he had made a mistake
    Chuck Norris puts the "laughter" in "manslaughter".
    After running injuries I now also hike, cycle and swim, less impact on my joints.

    For the avoidance of doubt Chuck Norris is an actor and an ex martial artist (not me)
    • EachPenny
    • By EachPenny 3rd May 17, 8:04 PM
    • 1,626 Posts
    • 1,943 Thanks
    EachPenny
    Some very good advice on this thread already. The key to saving is to watch your spending. Try to have a set amount you put in to savings soon after you get paid each month, then aim to have money in your account at the end of the month which will also get saved.

    Always keep an eye on the interest rate you are getting on your savings and move them if it isn't a good deal.

    I am currently living on the interest on my cash savings, I've set myself a challenge to see if it is possible to do that for a full year without dipping into the actual savings themselves. It is amazing what you can save and get for free when you have the time to look for good deals, rather than being so busy working you just pay whatever you're asked because you don't have time to think about it.
    "In the future, everyone will be rich for 15 minutes"
    • EachPenny
    • By EachPenny 3rd May 17, 8:08 PM
    • 1,626 Posts
    • 1,943 Thanks
    EachPenny
    Just had to look "stoozing" up. Seems like an entirely wreckless way of trying to profit if you ask me!
    Originally posted by ian-d
    If it looks reckless then maybe you've looked it up in the wrong place?

    Bank gives you £X for Y months at 0%. You put the money in a savings account earning Z%. Coming up to Y months later you give the bank their £X back, and keep the interest earned for yourself. What's reckless about that?
    "In the future, everyone will be rich for 15 minutes"
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