How do you strike a balance -saving v's spending?

osian

Just wondering how other families strike a balance between saving and spending? Is there a technique or a certain way of thinking?

We're in our mid thirties with a young child. We're mortgage free with savings and no debts but I still feel uncomfortable with spending - especially with larger purchases.

Thanks

FATBALLZ

Although I don't do a lot of spending at the minute as everything is saved towards a house deposit, my general principle is that you need to work out how much you need to save towards your retirement, make sure you're putting enough aside for that, have a safety barrier of £10k or so in case of job loss, and then feel free to do what you want with the rest.

Kittendreich

There was a similar thread on here a few weeks ago (sorry I don'tknow how to find it and post a link).

You sound like you are in a good financial position - so relax and enjoy it! As long as you have pots of money aside for both emergencies and longer term savings (e.g. pension, uni/wedding/house fund for kid) then the rest is yours to use making life better! You don't need to be frivolous and can make sure that you make wise purchases (i.e. getting good deals, not wasting money etc) - but you can't take it with you when you go.

Gigglepig

As above, think through which major investments you really need first;
- are you trying for more kids/would need a bigger house?
- pensions
- a savings account with a "buffer"/"safety net"
- a savings account for tuition fees etc. for the child
- a savings account for any major planned purchases or life events (new car, new bathroom or kitchen for the house, huge 40th birthday party, continuing professional education etc)

If it is clear in your mind how much you "need", you can spend the rest without feeling worried and guilty.

Some times it can be useful to have designated accounts or "piggy banks" for certain projects - for example put x pounds away each month towards a dream holiday, then when time comes to book the holiday you may feel more comfortable with spending on it.

balletshoes

osian wrote: »

Just wondering how other families strike a balance between saving and spending? Is there a technique or a certain way of thinking?

We're in our mid thirties with a young child. We're mortgage free with savings and no debts but I still feel uncomfortable with spending - especially with larger purchases.

Thanks

To be honest, I don't understand the problem? I think you're in the good financial position you're in because of your attitude to money, and thats nothing to be concerned about in my opinion. Is it just large purchases you need to buy that you're uncomfortable spending on? What about large purchases you know you'll enjoy ie family holidays etc? Do you have the same feelings about the expense of those?

osian

balletshoes wrote: »

To be honest, I don't understand the problem? I think you're in the good financial position you're in because of your attitude to money, and thats nothing to be concerned about in my opinion. Is it just large purchases you need to buy that you're uncomfortable spending on? What about large purchases you know you'll enjoy ie family holidays etc? Do you have the same feelings about the expense of those?

Thanks. We're ok with spending on things that we need - i.e if something breaks down and needs replacing we'll do it no problem. It's more the frivolous things that I'm uncomfortable with (holidays, home improvements etc). We do go on holidays but I do set a lowish budget for each one. I used to spend more in my twenties when we had next to nothing and think nothing of it. I wish I could be in between how I was then and how I am now.

I agree that there isn't really a problem, but I'd like to get more of a balance in my thinking iyswim.

brians_daughter

osian wrote: »

Thanks. We're ok with spending on things that we need - i.e if something breaks down and needs replacing we'll do it no problem. It's more the frivolous things that I'm uncomfortable with (holidays, home improvements etc). We do go on holidays but I do set a lowish budget for each one. I used to spend more in my twenties when we had next to nothing and think nothing of it. I wish I could be in between how I was then and how I am now.

I agree that there isn't really a problem, but I'd like to get more of a balance in my thinking iyswim.

I wont start to preach to the converted! You seem to have everything in control there!

Re the holiday thing would you have a 'better' family holiday by spending twice as much? I know the best holiday we have had in a long time was the cheapest as it was geared around the children, me and my oh have spent £1,000s on holidays only to be disappointed with them... Obviously if you really want to go to disney land and can afford it but feel guilty spending the money (in your comfortable situation) then you maybe need to be a tad more relaxed when spending and dont let your saving mentality become a barrier to doing the things you want to, and can afford to do! After all, you work hard, save hard and should enjoy the trappings that brings with it x

LJM

i tend to ask myself is the item product what ever something i want or some thing i need if it is a non essential item i tend to wait and add to bday or xmas lists. you also could view it in a way say ok if i spent £5 on that item i could have bought milk,bread,a pack of nappies etc

osian

Thank you all, some good advice there. Thanks for taking the time to post.

DUKE

Money is for spending & spoiling yourself providing you can (& you seem able to do this) afford this. I used to worry about buying large items too but life's too short not to have anything but a large bank balance. I know money means stability but it's only bits of paper. Enjoy it!

My husband's the one who likes to spend on the big stuff, I'm the one who likes to spend on holiday's. I always think that when I'm really old .... I can think of all the places I've travelled to & have such great memories, but I wont have such good memories of the great big **** off TV that we have. But I know that in order for me to have my holz then he has to have what he wants too.

Tropez

All my income gets split up into percentages and then diverted to different accounts. Basically, X % for bills, X % for savings, X % for spending - it's a little more complex than that, but that is the idea.

I intend to retire very early, hopefully around 45, hence I save a large proportion of my income but I still spend enough on luxuries to make me happy.