Spender or Saver

Out,_Vile_Jelly

I've alwys liked saving. As a child I loved counting the coins in my money box and kept a ledger detailing what I spent and what I had leftover, with columns in different biro colours. My rich nan used to send me a cheque for £25 for birthdays and Christmas; this I would pay into my Post Office account. My poorer nan would send me a fiver in cash, which I'd spend. When I was 20 I used the Post Office savings to buy a flight to the US to have the best summer of my life- I'm glad I didn't spend all that birthday money on sweets and pony magazines. The key is to find the right balance between having the security of a rainy day fund while still allowing yourself the odd treat. I save ~10% of my take home each month, but like to indulge in the odd impulse buy.

IveSeenTheLight

Out,_Vile_Jelly wrote: »

but like to indulge in the odd impulse buy.

To combat impulse buying, my wife tends to leave it over night and speep on it.
If she still feels the same way the next day or a few days later then she'll go back to get it.

Niksan

Was a saver, but my ISA gets nothing now as with the BR as it is, it mainly goes on over-repayments by a long shot and the rest is spent on essentials, so I would say 100% spender now.

Joe_Bloggs

Reducing mortgage debt through overpayments is analogous to saving in a cash ISA at the mortgage interest rate. However a lender may limit access to these funds. I have never yet tried to access my overpayment reserve.

I don't think capital repayments on the mortgage can count as savings. It would require a remortgage, credit checks, affordability, and legal work to access the repaid capital. And then it all has to be paid back at some stage.

Savings should be an item built into the budget. To make the most from savings you need additional savings. For example regular savers where you need 300-500 a month to take part. It would be high risk to commit if you could not access lower interest liquid savings in an emergency.

Some of the best rates are for fixed rate fixed term products. If you haven't saved for the lump sum and learned to live without that money then you can't benefit from the rate.

Savings can be an insurance policy for things that can't be insured against or budgeted for. With savings you can put right what went wrong without resorting to extortionate credit card interest rates. Card rates are no longer a problem as you can pay off the bill in full from savings.

If you have savings to cover it you can consider slow stoozing on a 0% for purchases card.

The best saving rates eventually decay to near zero so you must chop and change accounts to get the best value. Any bank charges would wipe out months of savings interest so it pays to be attentive/have unused overdrafts in place.


J_B.

Batchy

As a "saver" im paying off the capital part of debt also, Interest payments are the servicing of debt. "Savings" are a part of your asset portfolio, dont confuse the two.
Saving can also be in the form of pension contributions, however, you most certainly cannot access them for a lot longer than what it would take to remortgage, or sell a house an drawn down the equity.

If you have a Interest only loan.
And save in ISA's to repay the capital in the future, they are SAVINGS... you use the Savings to repay debt on an ASSET now, whats so different? Apart from cash flow!

First you talk about Fixed term savings, then having access to liquidity is what savings is all about??? lol Your contradicting yourself.

Also to access your mortgage savings all you would have to do is SELL your HOUSE. no credit checks, just find a buyer, yes easier said than done, but not hard to sell reasonably.

Anyway back to topic, if you need to discuss what savings are, please dont participate in this discussion. This is not the discussion! Start a new thread. Cheers.

Mini_Bear

i am a saver by nature, however i am getting married in a few weeks so the last few months all my savings cash has gone on wedding bills! We then have to get back on track wit saving for our house move. i cant wait until we have nothing to save for and i can start speculating a bit more!
I agree with others on here, make savings part of your monthly budget taken out on pay day. if you never see it you dont get used to it and it will allow you to survive on a lot less income in the future if you need to! (Im 26 by the way, i imagine most people go thorugh their frivolous years now, i plan to do it in my 50s!)

nick1977

Batchy wrote: »

If you have a Interest only loan.
And save in ISA's to repay the capital in the future, they are SAVINGS... you use the Savings to repay debt on an ASSET now, whats so different? Apart from cash flow!

Difference is you can get access to the money (even if it is technically meant to be paying your mortgage off in x number of years). For example you may have a large excess on a car insurance policy that needs to be paid, and when you get the excess back from the other insurer you'd put the money back. Not quite so straighforward if you have to draw back mortgage capital paid.

Batchy wrote: »

Also to access your mortgage savings all you would have to do is SELL your HOUSE. no credit checks, just find a buyer, yes easier said than done, but not hard to sell reasonably.

All you have to do is sell your house? I'd consider that a substantial thing to do compared to drawing some money from your savings account. You're looking at a few thousand in fees, before you even consider buying.renting somewhere else.

Nick

michaels

Funny I can pay as much into or out of my mortgage as I want as long as it remains less than it was when I originally took it out. Of course with the rate so low I don't pay any in as I can earn a better return elsewhere.

Loopgames

Shame 'investor' is not an option.

I'm not a saver anymore - I'm a spender and investor. The saving rate is rubbish and with inflation raging my money is on inflation hedgers.:p

Batchy

Sigh... everyone gets caught up on the technicalities. Why dont you just say... you need a little balance and a little liquidity. Im not going to be drawing down from my mortgage to make an insurance Excess payment, especially since I took out an excess insurance policy too... However, if I didnt I would cover it with a Credit card, Pay it off the next month in full and pay less into my savings that month, and no that doesnt mean pay less off the repayment mortgage... No interest paid, but 30-60 days interest free credit.

If you split to 50% down into ...
15% as mortgage capital
25% as Bank Savings, in various accounts including ISA's and Current account savings (no fixed term)
10% as Premium Bonds
Plus extra 15% down by employer as Pension Savings

If you dont take any credit for the mortgage and corresponding asset, what else can you do.

Treat it as servicing Debt ok, fine.
What about the equity increases/ decreases... do you count them each month... if so how, ... and why... considering you will be living there for a long time.

The savings goal of a mortgage repayment is to not have to pay a mortgage during retirement or latter years, not the investment aspect of the property value... its all the same... Imagine trying to save in a pension, with the sole goal of paying your future rent... thats hard going since you never know what your rent is going to be in the future, you can take a best guess. But thats about it. All I know is it will continue to increase probably in line with CPI or RPI, take your pick.