Savers you've never had it so good?

Nomad25

ok I've read all the extremely logicial explanations, I am in the older, careful, worrying about long term drains on our savings and not very financially astute group.

HOWEVER, I would raise few points:

1] That personal inflation thing is a bit too complicated for me to access.

2] The items on my monthly DD list [e.g. insurances, gym membership, BT, electricity] have all/or are going up by 20 - 60% but do not get included in CPI or RPI.

3] I should be looking to spend my money on big items [like cars, furniture, etc.] which I may need [but do not] in the future, because it's more for your money today?

4] As previous posters have said this really is a mindset thing, I have to get my head around this [still having great difficulty] my 'cautious saver' mentality and become a 'clairvoyant savvy spender'.

5] If I do this by digging into my capital, who is going to support me when it's all gone - the state will keep me? Oh right, that's something to look forward to and no doubt it'll pay for a really comfortable lifestyle.

And, I have to persuade my OH that spending our savings is potentially a good thing! Don't think this is going to happen.

gozomark

Nomad25 wrote: »

The items on my monthly DD list [e.g. insurances, gym membership, BT, electricity] have all/or are going up by 20 - 60% but do not get included in CPI or RPI..

what makes you think they aren't included ?

gozomark

all you have to remember is that every year your savings dont go up by inflation you are eating into your capital - ie you've probably been digging into your capital before, but it was disguised by inflation

Nomad25

what makes you think they aren't included ?

Are they? I'm happy to be put right. You are more in the know than me. I thought CPI covered 'shopping basket costs'.

I am interested in any observations that add to my scant understanding of this topic, as I said I'm in the not particularly financially astute group.

gozomark

as per Andys earlier post

CPI and RPI baskets - all the items you list are in the CPI and I presume in RPI as well

http://www.statistics.gov.uk/article...ticle_2008.pdf

1. Private health club / gym membership

2. Fixed line telephone charges – eg line/instrument rentals, call and operator charges, Mobile phone charges

3. Insurance
House Contents Insurance
Home contents insurance premiums
Health Insurance
Dental insurance Pet insurance
Subscriptions to private medical plans
Transport Insurance
Vehicle insurance

Foreign holidays insurance


4. Electricity - Average of the electricity companies’ tariffs

lukekelly_2

tsmlion wrote: »

This advice is fundamentally flawed and for the non professional, downright dangerous.

Why is it flawed? And why does your professional status matter? The subtext of your post appears to be that you shouldn't tell people that in some situations it is okay to spend capital because non-professionals are too stupid to understand in what situations this is the case.

gozomark

tsmlion wrote: »

This advice is fundamentally flawed and for the non professional, downright dangerous.

Unfortunately, the "beautiful people" surrounding the very well meaning Mr Lewis will not entertain any criticism.

explain how its fundamentally flawed please - this is basic mathematics

BTW I'm neither beautiful nor surround Mr Lewis, thank you very much.

More dangerous is pensioners cutting expenditure when they may not need to, but only do it because of a misunderstanding of inflation

unitedwestand

Wow!

Savers have never had it so good!
Borrowers have never had it so good!
Investors could potentially never have it so good!

Credit crunches are truly awesome!

Who wants to have a stable economy when can have the amazing joys of a credit crunch!

If you’re at risk of loosing your job or already have, or you’re an OAP with limited savings, or you’ve received no bonus, no salary increase or had working hours cut back & now your savings rate has been slashed….

….one thing you’ll no doubt be rushing out to do every night is fill one of Martins virtual baskets full of goods.

Go credit crunch!:j

gozomark

um, borrowers are not doing well at all as in real terms they are paying very high rates - its the same illusion of looking at nominal not real rates - this applies to both borrowers and savers

koru

Nomad25 wrote: »

ok I've read all the extremely logicial explanations, I am in the older, careful, worrying about long term drains on our savings and not very financially astute group.

HOWEVER, I would raise few points:
....

4] As previous posters have said this really is a mindset thing, I have to get my head around this [still having great difficulty] my 'cautious saver' mentality and become a 'clairvoyant savvy spender'.

5] If I do this by digging into my capital, who is going to support me when it's all gone - the state will keep me? Oh right, that's something to look forward to and no doubt it'll pay for a really comfortable lifestyle.

And, I have to persuade my OH that spending our savings is potentially a good thing! Don't think this is going to happen.

No-one is saying you should stop being careful with your spending. If you can make sensible economies, by all means do so. If you can avoid eating into your capital, then great. But don't take this to the extremes of cutting out meals or turning off the heating, just so that you don't contravene the often-repeated (but fallacious) "rule" about never eating into your capital.