Spend or save, spend or save ...

Barros

Hi Everyone

I wondered what other's experience was of this is ...

I'm mid to late 20'sand very fortunate in that I have a stable job, no debt, decent salary.

I have no travel costs
no debt

by the time i've paid all my bills and expenses for the month I have about £1K left over.

This month I saved nearly all of this just to be stubborn and see if I could live off the £12 a week for food challenge.

I have still maintained a social life with friends, going out and about 3-4 nights a week. But now, i can't bring myself to spend on ME.

Sounds daft I know, but unless i really need something i just dont want to buy it - i wouldn't go and buy a new jacket for the sake of it etc. gift wise im generous with my friends and family - but has anyone else experienced this? I'm not miserable because i don't feel as though i am denying myself anything!

had a look at threads but didn't see anything about it.

moz86

Hi Barros,

Sounds like you're in a very similar boat to me situation wise. Difference being I have about £1200 spare a month after essential bills, rent, council tax, mobile, broadband etc. You may notice from my signature however, that I am still in a little debt, and therefore manage to spend that £1200 and then some!

Once this debt is clear, I'm planning to save £425 a month to fill my ISA allowance for 2011-2012, then spend the other £775 on myself.

Within a few months I will have closed this down and shall be living within my means again, but Im still very much a spender on myself. A question for you... do you live with your parents or are you living totally independantly, and secondly, what does that remaining £1000 have to buy you in a month?

dawyldthing

Barros - it sounds wise. I don't spend very much money, haven't done for a long while as I have enough clothes to fill a shop, don't drive so walk or use public transport to work and to go out and always shop around for the best offers. But, it will mean that you can save the most so that when you decide to buy your house (i'm assuming here) then you'll have a nice deposit to put down on a house (as, like i read the other day, for every pound you save its like saving 2 pounds off your morgage)

Loughton_Monkey

I applaud your general approach.

It would probably be wrong to say I did the same. Basically I didn't set out to, but I was fortunate enough to have 'forced' [to an extent self-imposed] savings in my early career - in the form of an excellent pension, and a very early start into buying my own house on a relatively large mortgage.

And after that, I sought to save extra, but found this reasonably difficult until mid 30's. I was meticulous, though, and kept detailed accounts of incomings and outgoings so I always had a direct control over finances - which is extremely important.

Unlike you, perhaps, I tended not to wear a hair shirt and deny myself what I wanted. If I wanted something, I would buy it - subject only to knowing whether/how I could afford it. I like some of life's luxuries. If I buy a car, I want the leather seats. If I go out for a meal, I will have the full bottle of wine and a decent one. I was lucky enough to be able to afford this and save even more for my retirement.

But you get (I got) to a certain lifestyle where you can say 'great'. I don't need any more. I can afford to leave lights and appliances on all the time. I don't care about the cost of gas to keep my pool at 90° even though I could save £500 by keeping it at 85°. So the 'extra' keeps piling up and then you work out at what age you can give up all the 'carp' called work and continue - inflation linked - to continue living like that until you are 90. I managed that at age 56, and now 5 years on, I don't regret it one bit.

The only difference (as compared to working/earning) is one of 'contingency'. When in work, a major unplanned expense can usually be made up over time. There's always a payrise - or higher paid job - round the corner. Hence your retirement figures need to be 'fat' mine were. And you need to continue to 'manage' the budget agressively because income is a bit more 'fixed'.

Yes, I use the time to 'save money' on things like broadband, utilities, mobile etc. but only because I can and these savings are not depriving me of anything. But I don't choose/need to turn lights off, turn down my heating or pool temperature. When I feel like a glass of Champers (more likely Mrs Loughton Monkey does) then I open a bottle. If I need to buy more cigars, gin, wine, or beer (as I do now) I'll go to France to buy it all in bulk. I'll save £850 on cost, but spend £19 on the ferry and £180 for a nice lunch in Calais. Totally unnecessary, but 'nice' and well within 'budget'.

So my main point is that saving is well worth it. Exactly the same principles and relative financial scale applies just as much to anyone who earned half, or a third of what I did - or indeed to anyone who earned twice or three times what I did (of which there are many!).

Hope you do well.

DavidHayton

Hi Barros,
I can identify with your experience. Quite simply, I don't enjoy spending money on myself. To take one of your examples, if my jacket is worn out, I'll buy a new one but I wouldn't go and buy a new jacket just for the sake of it. I don't think that I'm a miserable old **!*! : I give 15% of my income to charity, I go out with friends and buy my rounds, and my children are well provided for. But I just don't have any interest in buying stuff that I don't need just because society says I should want it ... because I don't. Best wishes, David

wriggly

I'd say you've discovered that just being a consumer of material goods is not the recipe for a happy life. At your age, you may have big expenditures ahead of you (house, wedding, kids?), and paying for these will be much more pleasant if you have savings rather than going into debt. (At least, your interest rate will be lower if you start with a bigger deposit).

On the other hand, you're in your prime for having worthwhile experiences, whether that is just spending time with your friends, or more adventurous (skydiving, travel, etc). Don't deny yourself if there's something that sounds worth a go.

Jake'sGran

Hi Barros, I enjoyed your post. It made me realise that my way of doing things is not strange at all. I have no debt and can't remember when I last had any.

One thing I am annoyed about is that my investments have done well but all the accumulated money will go to other people as I don't have the health to enjoy it. I keep trying to think of something I could buy and enjoy but there isn't anything except perhaps an orangery across the front of the house but I could not handle having workmen coming in and out for weeks.

I have lots of clothes but don't go out enough to enjoy them. The people who will get my money are all big spenders. My daughter thought nothing of stripping out her very good en-suite, bathroom and downstairs loo and having them refitted. And the old stuff goes on the tip. It horrifies me.

Last year I bought a DVD recorder/player,hard-drive thingy and it sat on my bedroom carpet for a week and then I sent it back. I just kept looking at it saying to myself "how often will I use that?".

I could go on for ever but finally must tell you something funny. I offered my friend of many years a holiday to anywhere she would like but then remembered that she won't travel on planes or trains or travel in a car on motorways. So, it was another "no spend" idea.

Imnoexpert_2

Things change.

I was, and am a saver. By inclination I am tight with money like you.

1. I got married (luckily to someone else sensible with money), now there are three of us spending the savings, including a youngster to educate and give a good start in life.

2 I became disabled and probably won't work again. I'm very glad I saved, but equally I am so glad that I travelled the world with my backpack, played sport, went on skiiing holidays and bought a house. I never have to look back and say,if only I had done........

3. My father saved for his retirement and invested in a pension. He died before he could do all the things he wanted to.

So life's about balance. If there is something you want to do, or have, go for it while you are young, but if you can, also plan for the future. My only caveat is that you don't do it on borrowed money!

Barros

moz86 wrote: »

Hi Barros,

Sounds like you're in a very similar boat to me situation wise. Difference being I have about £1200 spare a month after essential bills, rent, council tax, mobile, broadband etc. You may notice from my signature however, that I am still in a little debt, and therefore manage to spend that £1200 and then some!

Once this debt is clear, I'm planning to save £425 a month to fill my ISA allowance for 2011-2012, then spend the other £775 on myself.

Within a few months I will have closed this down and shall be living within my means again, but Im still very much a spender on myself. A question for you... do you live with your parents or are you living totally independantly, and secondly, what does that remaining £1000 have to buy you in a month?

Hi Moz - :j

I live independently in the big smoke haha, have done so for 9 years now, how time flies.

As for the remaining £1K, it doesn't have to buy me anything as all the bills have been paid!

Sounds like with your wee bit of debt it'll soon clear up and you'll be able to treat yourself and save at the same time - well done!

Barros

dawyldthing wrote: »

Barros - it sounds wise. I don't spend very much money, haven't done for a long while as I have enough clothes to fill a shop, don't drive so walk or use public transport to work and to go out and always shop around for the best offers. But, it will mean that you can save the most so that when you decide to buy your house (i'm assuming here) then you'll have a nice deposit to put down on a house (as, like i read the other day, for every pound you save its like saving 2 pounds off your morgage)

is that right!? wow, now that is a motivator!! :money:

dawyldthing, it sounds like we are in very similar positions!!

and yeah, spot on, im saving for a flat so those words will ring in my mind, thanks!

Barros

DavidHayton wrote: »

Hi Barros,
I can identify with your experience. Quite simply, I don't enjoy spending money on myself. To take one of your examples, if my jacket is worn out, I'll buy a new one but I wouldn't go and buy a new jacket just for the sake of it. I don't think that I'm a miserable old **!*! : I give 15% of my income to charity, I go out with friends and buy my rounds, and my children are well provided for. But I just don't have any interest in buying stuff that I don't need just because society says I should want it ... because I don't. Best wishes, David

Spot on David! and 15% of your income to charity is very generous indeed, that is awesome.

Are you a saving man then, do you have any goals short or long term? :beer: