% of income saved - impact on lifestyle

fannyanna

Noktok wrote: »

I also would not assume that your daughter will be supported by her future husband. She might end up supporting him!

Oh boy did I fall foul to that one. Didn't see that coming when I was a little girl with all my whimsical dreams of the future. Oh well, modern living for you

pinkteapot

I'm not sure percentages will tell you a lot. 10% of one person's income could be £100 and for someone else £1000. I think the actual amount of money you have left over after bills and saving is more useful...

de1amo

i have three homes and a successful business of educational colleges(outside the uk) so i very much doubt my daughter will even end up supporting me!-i still save despite it all, i concern myself about the small things in life like my mortgage, i always believe there could be a day when i lose it all and my mortgage which is my only debt be my nemisis!

8pnoodles

We've got out of debt a while ago and although we have stayed out of debt, we haven't saved anything as we have been spending a lot. We are trying to save to buy our first house now and I am finding it really hard to stick to our budget! Stuff for the kids, and blowing the food budget are my main problems.
Have you tried deciding exactly what you do want to spend money on and saving up for it? I agree, most people you are comparing to are going to be building up debt.
I am fascinated by the psychology of spending and money though. Would you be happier spending more and saving less? Short term or long term?

osian

Mmm, I asked a similar question about a week or so ago and I'm still none the wiser, sorry. We paid off our mortgage nearly three years ago and have carried on saving. We try to save about 50%- 70% of income each month. Of course if something needs fixing or buying then maybe we won't save that much in that month. Our lifestyle is quite simple and ordinary really.

I guess if you've got the savings there in the bank and there was something that you really wanted, you could buy it with ease. Whereas if you squandered your money each month, you may struggle to purchase a bigger item in one go. So you could look at it from that point of view.

Have you decided what you are saving for? I do have a goal in mind, I'd like to buy a small holiday home (as close to mortgage free as possible). It's something that will hopefully be fun to use and possibly give a small income/ be able to sell at retirement. I also like to have savings for security, in times like these I feel a bit safer having a buffer.

I do sort of prioritise my spending - I would not want to be unhappy by saving, so I'll happily spend a little on holidays and days out/ entertainment/ toys and books for my young daughter etc. But I'm not really interested in designer clothes or fancy cars so don't tend to spend much on those kinds of items. Things I am struggling to spend on (but want and need to) are home improvements - new kitchen, wood flooring, storage, garden makeover, redecoration as they'll eat into our savings a fair bit, but I'm thinking that doing these things will help us stay in our home for longer without the expense of moving to a bigger home.

Edited to add: I do like to turn it into a little bit of a challenge too, I get a kick out of getting a bargain, saving a few pounds here and there, so there's a liitle bit of a fun element in that too.

de1amo

a thing i presume everyone is doing is paying into a decent pension fund?---people here obsess about paying off debt or clearing their mortgage but i hear little reference to pensions!-a home wont pay for itself in old age and neither will the state pension support a decent life style

fannyanna

We don't have a huge amount of savings (£4k as it's only recently that we started saving). We can save about £1,000 per month which I think is huge although our list of things to save for is also growing

Originally we were saving to buy a "new" second hand car each (upto £4k on each car).

We're now trying to sell our property (as we'd like to start a family and our one bedroom flat is not big enough - I know people do it but we'd really rather not) to move into rented accomodation so the car's will have to take a back seat. We're not likely to sell our proprety for enough money in order to pay off our mortgage and pay estate agent/solicitor fees and realisticly we're looking at having to find £6k to sell our property. We'll then need to find the money for a deposit on rented accomodation.

Between us we take home £3,546 a month which I think is a lot but after paying all the bills and saving as outlined above I peronally have £35 per week as spending money (that would be gone in a night out).

I guess that's just the reality of having "grown up finances" and I need to stop comparing myself to my friends who don't earn as much but don't have teh same outgoings and therefore have a higher level of disposable income.

Cue the violins

osian

You could always have a look at the savings calculators on this site to see how long it'll take to save up to a certain goal etc. You could play around with the figures and see if you could shave a bit off the amount you save each month to allow some money for you to enjoy life a bit more. You are definately wise to think about these things before having children though -well done.

N1AK

fannyanna wrote: »

I sometimes look at my peers and wonder how they can afford all the things they have / do. I know this is really stupid as I don't know their personal circumstances and of course they could be in debt where as I am saving. I suppose I just get a bit of the green eyed monster lurking every now and then

It's a difficult question to answer because the answer varies so much based on individual circumstances.

We've got friends my age who live in bigger houses, with better cards and earn less than we do. They've achieved it by getting large mortgages with small deposits and buying cars on credit.

As a household we have saved very hard to get a good deposit, and be financially secure. We've never been big spenders anyway so it wasn't really a sacrifice, so much as what we do naturally.

I'm a hard cast 'thinker' not 'feeler' so a lot of my decisions have been based on what I want to achieve over a long period of time. I'd like to have a good house ~£300-500k with a decent amount of the mortgage paid off by ~35. I'd like to have the financial resources to cover tuition fees etc for 2 kids (if we choose to have them). I intend to maintain a good quality of life in my later working life and retirement. My definition of enougn money is being able to live without worrying about paying bills, affording holidays etc.

To do all the above a good proportion of our income has to be saved.

Lokolo

I like to have "spending months", so like 2/3/4 months of the year I don't save, but instead splash out on takeaway, clothes, shopping etc.

This usually keeps me "satisfied".