Spend, spend, spend

[Deleted User]

oh no swiss69, the money we have saved up will enable us to have choices now that we have retired. We choose to keep the bulk of our savings safe in index linked certs so that we can pay for medicines if needed or gold standard care in old age. We have enough to live well now and to go on holiday but with a bit of luck we have another 30 years in front of us and to have such a safety net is very re-assuring

Jennifer_Jane

swiss69 wrote: »

A top economist was on the radio the other day and he said that people should always have enough money to cover 3 months income, Should save for their pension and keep debts to a manageable level. Other than that he basically said that any more money should be spent to ensure a thriving economy! So he would agree with what you are saying!!

The recent interest rate cut will only help the economy if people who have an extra £50 or so in their pocket spend it!!

The only way we will get out of this recession is if people carry on spending. Signs are not good though with most companys seeing a downturn in sales.

Personally I cant see the point of having thousands of pounds when you are retired and dont need additional income. If your income in retirement is enough then why oard loads of cash? You might as well either spend it or give it to your children whilst you are still alive.

You need to keep the emergency fund in retirement even more so than during the times when you could perhaps get a second job - you need to maintain your house; there are health issues/teeth to be sorted; cars; and lots of other things that can come up and bite you! As well as having some money for the fun things - holidays; presents, and so on.

Jen

ed123_2

....I agree with the original post, it seems this country rewards the spend thrifts I've seen many cases where people that have saved & had a small private pension being denied benefits , while others that have spent it all on fags & booze get it all- penion credit, income support, council tax benefits etc etc. I also know of two people (one with debts of over £50k) who have cleared their debts in a year by declaring themselves bankrupt-cost approx £350 and debt free after one year....I think I will become a chav and take take take take from the system

isofa

Agree with the OP too, the irresponsible always get rewarded. It's a pathetic state of affairs.

I think it's crazy to think that if you have a bit extra you should spend it straight away.

If you have and you want things fair enough, but to spend just for the sake of it, is absolutely ridiculous. I thought this was MoneySavingExpert?!

It's certainly not the way I run my life, nor my finances, I save and invest for the future of myself and my family - I've no intention of frittering away my money on a whim to "help the economy" - when the government have been a large factor to blame for this mess we now find ourselves.

It is mainly because this government has encouraged people to borrow way beyond their means, that we are in this situation today, hardly surprising it's come collapsing around their ears. Now in typical labour fashion they are going to try and spend spend spend (and encourage us to do so), until it's all gone, and someone else is voted in to clear up the mess.

Financial prudence - more like utter financial irresponsibility. Same to with the greedy people borrowing enormous mortgages which they never had any hope of paying back - and the stupid banks for allowing it in the first place - greed, greed, greed.

People should be encouraged to save up for things, rather than just buying everything on credit. Other than a house, nothing I've ever purchased was on credit, I go without until I save for what I want.

In retirement you'll need all sorts of money to live a comfortable life, the state pension, by the time I retire, will be worthless.

Myrmidon_J

Broadback wrote: »

What is the point of saving?

... Why should you save when interest rates are less (especially after tax) than inflation?

Historically, it has often been the case that deposit accounts have struggled to 'beat' inflation. Thus, it is only relatively recently that saving (in this sense) has offered 'real growth'.

However, saving is by no means pointless. It offers protection against unforseen circumstances, such as redundancy or necessary capital expenditure, and is far more 'liquid' than money invested.

Index-linked gilts and savings certificates are an option if your goal is solely to prevent capital erosion. But it seems extremely likely that inflation will fall in the next year or two, perhaps to under 1% - this is what the Bank of England fears.

granville_2

Myrmidon_J wrote: »

Historically, it has often been the case that deposit accounts have struggled to 'beat' inflation. Thus, it is only relatively recently that saving (in this sense) has offered 'real growth'.

However, saving is by no means pointless. It offers protection against unforseen circumstances, such as redundancy or necessary capital expenditure, and is far more 'liquid' than money invested.

Index-linked gilts and savings certificates are an option if your goal is solely to prevent capital erosion. But it seems extremely likely that inflation will fall in the next year or two, perhaps to under 1% - this is what the Bank of England fears.

It depends on whether you believe the official (Government) measure of inflation!

Remember - inflation only measures the change in price... e.g. the price of gas increases 25% in year 1 and 0% in year 2.

Compare that to the average yearly salary increases (especially in the public sector - ~2%).

(The biggest con - Government preaching about keeping inflation low yet allowing house price inflation to run out of control).

We are becoming slaves to debt.

evenasus

swiss69 wrote: »

Personally I cant see the point of having thousands of pounds when you are retired and dont need additional income. If your income in retirement is enough then why oard loads of cash? You might as well either spend it or give it to your children whilst you are still alive.

Agree with you in part, already paid off sons mortgages, bought them cars etc. Spend on the grandchildren too.

BUT, it's nice to have savings in the banks/building societies too.

Myrmidon_J

granville wrote: »

It depends on whether you believe the official (Government) measure of inflation!

CPI, RPI, the pennies left in my pocket at the end of the month - I still expect inflation to drop significantly in the near future!

A point well made, though.

Remember - inflation only measures the change in price... e.g. the price of gas increases 25% in year 1 and 0% in year 2.

Compare that to the average yearly salary increases (especially in the public sector - ~2%).

Again, average yearly salary increases have (historically) outstripped inflation. This has only changed - and not universally, by any means - relatively recently.

Public sector workers, in my opinion, get a sweet enough deal with various benefits and pension arrangements. It's tough that the government is hammering them just now - but don't forget, this is the same government that has presided over a monstrous (cancerous) swelling of the public sector in the past decade!

LucyTheDwarf

Spend spend spend? Oh goody - I have £5000 worth of credit limit to play with

(seriously, why on earth have I been given the potential to spend so much? I didn't ask for that high a limit. I'm young, and that represents a huge chunk of my income.)

I'm so glad I never followed that path.

ExBanker_2

Time to move cash back into shares.