getting the balance right

clutterydrawer

I was wondering, for those of you who are frugal in order to put money into savings, rather than because you absolutely have to be, how you decide what's the right level of frugality? (For want of a better term!)

I find myself always frantically trying to save every last penny to deal with hypothetical future emergencies, to the extent that I feel annoyed with myself if I buy the slightest unnecessary thing, because it's money no longer in the bank.

It just occurred to me that I could get hit my a bus and die tomorrow and all those years of stashing the pennies would have been a complete waste of time :rotfl:so how do *you* determine your level of fun today, vs. security tomorrow?

Not sure if this is even the right forum but hey ho

liz545

It might be worth asking this question on the DFW board, but I'd suggest making a list of all your fixed expenses - rent/mortgage, travel, utilities, debt repayments etc. Once you've worked out what you've got left over once you've paid for the things you can't change, then you know how much "wiggle room" you've got. I'm putting 20% of my takehome pay into savings at the moment, but my goal is to get that up to 30% by the start of the next financial year, so I can increase it in line with the increase in the ISA limits. It's good to have a stretch target because it makes you work harder towards your goal, but at the same time, if you set yourself a reasonable budget, with an affordable amount for having fun, going out etc, you shouldn't feel bad about not saving every last penny!

geordie_joe

clutterydrawer wrote: »

I was wondering, for those of you who are frugal in order to put money into savings, rather than because you absolutely have to be, how you decide what's the right level of frugality? (For want of a better term!)

For me, it's a case of if I like it then I do it. If I don't like it, or don't think it's worth the bother then I don't do it.

clutterydrawer wrote: »

I find myself always frantically trying to save every last penny to deal with hypothetical future emergencies, to the extent that I feel annoyed with myself if I buy the slightest unnecessary thing, because it's money no longer in the bank.

For me being OS/thrifty is about enjoying what I am doing. Once you cross the line into saving money even when it makes you miserable you're in danger of becoming a miser.

clutterydrawer wrote: »

It just occurred to me that I could get hit my a bus and die tomorrow and all those years of stashing the pennies would have been a complete waste of time :rotfl:so how do *you* determine your level of fun today, vs. security tomorrow?

Exactly! You could get hit by a bus tomorrow, so don't aim to be the richest corpse in the graveyard. Tomorrow never comes, so don't save everything for tomorrow.

The way I look at it is "Being OS is not about spending as little as possible, it's about getting what you want while paying the least you need to". And also about making things yourself that are better than you can buy.

clutterydrawer wrote: »

Not sure if this is even the right forum but hey ho

I think it is.

ChocClare

I've posted elsewhere on this subject so sorry if you've read it before!

I read years ago something which has always stayed with me: most people think the way to financial security is to have a budget, pay their bills and save whatever they have left at the end of each month.

According to the book I read, this is not successful: you will never save (or never save much), because there will always be a bill to pay which eats into the amount left at the end of each month; and because you never save, you will always worry about future bills.

The better way (the author alleged) was to do things the other way about. He proposed that the first thing you do when you get your monthly pay cheque is to give something to charity. Whatever you like. Whether you put money in the collection at church, support the wonderful Eddie Izzard's brilliant efforts for Sports Relief, sponsor a child through Plan, buy a copy of The Big Issue or sponsor a donkey - it's entirely up to you. There are always people worse off than you. Always. Give something away first and you create good karma that brings good things back to you.

Secondly, you should put money into savings. Again, whatever you think you should be saving regularly. Save it.

Now - and only now - pay your bills; buy your food, spend the rest of your money how you want to.

The theory is that people spend the money that they think is available to them. For example (and I hope you get more a month than this! :rotfl:) if you get £100, you think, "I have £100 to cover all my bills And I'll save £5. Oh, but actually, I've forgotten the car needs servicing. So I won't save £5 this month. We'll try again next month." However, if you first give away £5 and save £5, you think, I have £90 to cover all my bills. Including that car service. End of story. AND YOU ADJUST YOUR BUDGETS SO THAT YOU MANAGE ON THAT £90. Apparently, it has been proven that people do somehow do this without huge amounts of effort.

The good thing is that you end up with savings which you've already put aside, so you don't have to worry about the money you're spending. Your savings are already safe. If you have £5 left over, go for a curry (OK, a cheap curry - I'm using small figures here in case you haven't noticed! ).

At the same time, you are giving to others regularly which a) is great for them, b) makes you feel good about yourself, c) undoubtedly brings good things back to you, even if it's only because of your improved feelings because of b)!

And if you get hit by a bus tomorrow, people will still have benefited from your generosity; you will have savings to leave to/help out your family and your bills will still all be paid - and hopefully you will have enjoyed yourself a little along the way.

maryb

I do understand how you feel because I was the same for a while. I think with me it was feeling dread about the possibility of unemployment, losing the house etc but feeling powerless at the same time because you can never save enough to avert real disaster. Then I would get manic mood swings where I realised it was all hopeless trying to save enough to be secure so I might as well spend!!!!

Eventually I managed to get a more balanced approach by focusing on specific medium term goals eg save enough to replace the car in x years' time and stopped thinking I must save enough to make sure I am all right if the world comes to an end

Mrs_Thrify

Getting the balance of money right is easy for some and harder for others.
Having a rainy day fund/holiday savings account is a good idea. I like to put a little away each month so have a savings account as well as bank account. Watching the pennies means not giving away more than you have too.ie. why buy things at full price when another place has an offer or sale. I play it as a bit of a game now to see how cheep I can get a needed item.

mizzbiz

We don't have any urgent need to be frugal but for some crazy reason, I enjoy the challenge. We live as frugally as possible, have a multitude of spreadsheets and try to monitor where every penny is spent and if it's neccessary to spend it.

Why? One, I despise the materialism of today. I enjoy getting my designer clothes from charity shops, or buying surplusses for decorating rather than pay full price for 'the one'. It's an achievement of sorts.

Two, we hve big plans for the future and every £60 I spend on an item of clothing now, compounded in both terms of interest and the number of items this amounts to over the years, is money away from the lifestyle we are aiming for.

We're not hard-up, but we live like we are. We'd hate to get to 40 and realise all our spare cash went on loans/cars/clothes/posh meals and we haven't improved the quality of our life one iota.

I do agree about the knocked over by a bus thing, but if you enjoy the process of living frugally/squirreling away, then you'll never know the difference.

We fritter away so much and don't get much retrospective pleasure out of what we've bought. Life is for living, yes, but not spending and accumulating items we don't really need. If I die tomorrow having saved, I won't mind. More to the point, will I even know?

clutterydrawer

Thanks everyone, some interesting ideas here. Part of my "problem", if you term it thus, is that I'd like to buy a house one day as I hate the instability of renting, but I earn a pittance so will only achieve it through pretty hardcore frugality.

But then when I think "I won't go to visit my friends this weekend, because that's money I won't save" it starts me wondering if it's worth one day having steady accommodation if I've achieved it by sacrificing all the things I enjoy.


Think I might relax a bit more actually. I can't tell what the future will bring so there's no point making my present life miserable for the sake of a future that might not even happen. (I do enjoy beign thrifty - just think I might have taken it a little far recently!)

thanks again

GavB79

Why not change your goal from saving more to earning more? Work towards a promotion or career change so you no longer earn a pittance. There's more than one way to skin a cat.

FrankieM

You can have anything you want, you just can't have everything you want. I guess its looking at what your priorities are and then going from there.
There are ways of seeing people etc without spending alot of money....

Also if you enjoy not spending money, then there isn't a problem. If your feeling miserable then its good to look at what you think is making you feel that way.

clutterydrawer

GavB79 wrote: »

Why not change your goal from saving more to earning more? Work towards a promotion or career change so you no longer earn a pittance. There's more than one way to skin a cat.

no way :rotfl:I just changed careers from one that was poorly paid to one that is very poorly paid...I love my job and wake up each morning excited to be going to work so there's no way I'd change it