how important are savings?

Tuesday_Tenor

OP, I'm glad you came back with this second thread, as clearly the issues are still with you.

Short answer (1): For me, putting by savings is important. So too is using them wisely and at the right time. They offer choices and opportunities at different stages of your life. They are hard-earned, so not to be squandered. Used, not squandered. If you know what you want to do, then allow your savings to make it happen. If you don't know what you want to do, then keep on saving until you do.

Short answer (2)
>>>> I would rather spend my time at the gym, playing wii or chilling. This is clearly a response to your stressful situation. It does indeed indicate that Something Must Be Done to allow more of these things into your life. But how much time, and how long for? It's a question of balance. In the first instance, it sounds like you need a de-stressing holiday. That would be a good use of some of your savings.

Beyond that, though, in your current(/growing?) dis-satisfaction with your job/life, don't confuse an immediate/acute (and I believe totally genuine) need for 'gym, playing wii or chilling' with your life's Dream, or the sort significant long-term aims and aspirations for which you would make major life-changing decisions. [More in next post]

Short answer (3):
Ancient Chinese proverb, or from some New-Age life-path book, not sure which and it doesn't matter!:

Good Luck is where Opportunity and Preparedness meet.

A lot of people think I've been Lucky in my life, but actually I was able to make the most of certain Opportunities because I was Prepared - e.g. had enough savings put by; was physically fit enough; had chosen to learn a language in my free time etc. What are you doing to prepare yourself for life's opportunities?In fact, gym, playing wii or chilling could indeed be a preparation for something, but to see them as a long-term aspiration or lifestyle would almost certainly be a mistake.

Short answer (4): What sort of people/friends/mentors do you have around you to discuss things with? It can be difficult if everyone around you is into the very competitive lifestyle that you no longer value. Seek out some people from different backgrounds (a minister? a counsellor?) and make use of this board, if it's all you have. [Though remember a high proportion of MSE-ers will not relate to your level of savings]. What is your partners view?. Do his values align with yours?

HTH. Longer response to follow ...

Tuesday_Tenor

[FONT=&quot]Longer post, with many points to ponder.

1) In your current career , with your current salary, you clearly have some useful and valuable (£££-wise) skills. What you seem to lack is a bit of resourcefulness for acheiving what you really want in life. That's 'cos of your relative immaturity; but this will improve over time (it's called growing up/growing older!).

So, you've started on a particular career path, and are unhappy after 2 years. That's rather too soon to give up on all that investment in your education and training. The first things a more mature person would think of would be to
(A) problem-solve within the existing company whether there is anything that can be done. (We can't advise here, as don't know you, your situation, whether employers are reasonable or not)
(B) check out/explore whether ALL jobs and ways of working, using your EXISTING skills, are as stressful as your current one. So
(1) consider applying for other jobs with other companies elsewhere
(2) consider whether short-term contract work on different projects, with gaps in between, is a reasonable option in your field.

2) Something of my own experiences:
For 30 years I HAD to work more or less full-time. All of that work was interesting and my career(s) took several turns as different opportunities arose. I couldn't have stuck with a job that no longer interested or challenged me in the right ways. But I've never left a job without being clear what it was I was going on to (sometimes NOT another job, but I was always clear about what/why/cost/how long for). I'm now in my early-50s and only need to work intermittently. I am able to do so as I have as I have skills and aptitudes that are in short supply.
(Oddly, in a caring sphere, not a high-tech one, though my original training was in the latter). I also live a very inexpensive life, as my needs and tastes are simple. The skills and aptitudes I now use to earn a small living are NOT those from the career I had in my 20s, but from choices I made about what I did in my 30s and 40s. I don't have a family. I have a lot of free time for friends, walking, swimming, gardening and voluntary activities. I seem to be more free and happier than most people I know. I live the sort of stress-free life , well away from any 'rat-race', that you seem to want - BUT I couldn't have afforded to do this in my 20s!

3) You might find it helpful to think in terms of 10 years. What do you most want to have done within this time? Achieved certain things/had certain experiences in your career? Set up a permanent home with your partner? Learned new skills and changed career? Travelled the world? Taken time off to explore what you really want , as you don't really know? Had children? (You've said no; for me, it was a major consideration, though I ended up NOT having them).

I've had friends/acquantances/neighbours who have died in their 30s, 40s and 50s. Life is too short to stay too long with something that isn't right, though it's important not to be dilettante either. You need to get the balance right between following your dreams and keeping your feet on the ground. I find 10 years a useful time-span to think about. What if 10 years is all I have? It isn't a short enough time to panic me, but does focus my mind. You don't have to do everything NOW, but you do think about how you will have managed to arrange to do them in a few year's time. I have made sure that each decade I have prioritised the things I MOST want to have done; and the priorities have changed a bit over time. My acheivements/decisons have been a mixture of 'sensible' things, and many things that others WOULDN'T see as sensible, but felt right for MY journey in life. Only you can know what's right for you, only you can ensure that you can fund whatever activities or lifestyle you choose.
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4) >>>> you are very young still at 26. Too young to make such a huge decision. I disagree. I don't think the age is the determining factor, though the realtive lack of work experience might be.
People make life-changing decisions at all sorts of ages, for all sorts of reasons (relationships, health, money). At 28 I made a life-changing decision to change from a high-tech career to a care-related one, on a quarter of the salary. BUT I couldn't have done this if I also wanted a ££-extravagant lifestyle. I also had 7 years experience of working life behind me, not the OP's 2 years.

5) Your previous thread focussed on a need to get physically fitter. I believe this IS more important than some posters are giving significance to. The fitter you are, both physically and mentally, the more you're be able to rise to, and cope with, challenges and opportunities that come along. Just don't confuse [/FONT][FONT=&quot]a genuine wish to get fitter (which you COULD be starting to work on now, within you current lifestyle) with [/FONT][FONT=&quot]using this as an excuse for quitting your job.

6) >>> I do not like the stress, comptetitiveness and the amount of hours I have to work, and I don't actually enjoy my job.
Personally, I would make major changes in a situation like this.
In the first instance, explore something else within your existing career choice (as in (1) above).
If not that, then you need to work out what you DO want to do as a job/career, and how to go about it. You have the savings that would allow you to take time off; to go on holiday; to do voluntary work to explore using different skills; to re-train. Any or all of these. Remember it is because you have the savings that you can do this. So don't use them ALL up, and before too long, you will need to think about how you will replenish them. And remember that periods of 'bumming around' don't look too good on future CVs unless they can be shown to have been part of a realistic plan (e.g. training; exploring other work) to arrive at appropriate decisions for the next phase.

Have written fsr more than intended :eek:. Hope something in here is useful. Best of luck (=opportunity/prepredness), OP!


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celiacelia226

How to learn to save, I think everyone should do their homework, have a stable income, the appropriate expenditure, consumer.Hard work it!

sgl1965

There is far too much emphasis put on the importance of savings for some reason, if you do the sums it seems far better to go through life simply avoiding debt, not acquiring savings. The best interest rates you can get on savings are less than or just equal to inflations so most people are actually losing money on their savings. You have to pay tax on that money when you earn it as well. Far better to go through life avoiding buying rubbish you don't need, never having credit cards/store cards, cars on HP, etc etc. The added benefit if this is that you have to work less as your outgoings are lower. I guess the mortgage is the one exception to this rule as you have to live somewhere and it will probably go up in value eventually.

Mojisola

Tuesday_Tenor wrote: »

[FONT=&quot]
Have written fsr more than intended :eek:. Hope something in here is useful. Best of luck (=opportunity/prepredness), OP! [/FONT]

Won't quote it all as it's long but that's a brilliant post!

tight_is_right

Have you looked into working in research? I work at a university and the atmosphere is completely different to a commercial business. It sounds like your skills would be transferrable.

The money won't be as good, but you'll still earn plenty to get by. The drop in money is more than made up for by the stress-free days, friendly & helpful coworkers and good holiday entitlement.

pinkteapot

OP - I agree with others that the wanting to stay home all day and play Wii is a reaction to being in what sounds like a high-stress job.

In reality, after the novelty had worn off, you'd be bored and unfulfilled. You must be intelligent to get the qualifications and job that you have and in a minimum-wage job you would be bored and unchallenged. It might sound appealing given your current situation, but I honestly don't think it would make you happy in the long term.

I think you need to work out exactly what about your job you don't like. Is it the long hours? Would you prefer a job where 9-5 means 9-5. Or is it the work itself - the tasks you do? Or, is it just this company? Don't discount this as the company, people you work with and culture have a significant effect on how happy you are in your job.

Then you can work out what you need to do. If its the company, try getting a job with another company in the industry. If it's the work, what other jobs are there in the industry or in other industries that use your key skills? If it's the hours, what jobs are there in what you do that might pay a bit less but would give you a better work-life balance?

You can change what you do. I did a job for three years after university and then changed careers. I now do something different but it uses a lot of the same core skills and includes element of my first job that I liked. You can get away with it once - if you try and change career every few years you'll start to look flaky, but if you can explain your reasoning coherently then employers will likely give you a chance if you want a change a few years after uni. Most will understand that you only have a limited idea of what a job will be like when you come out of education.

If you do want to retire young, you'll need to stay on the path you're on or find a new one that pays as well. £50k would literally only last you a few years. It's nowhere near enough to support a lifetime in minimum-wage employment unless you're happy with a very basic standard of living. Small/cheap houses, no car or very cheap car, no holidays, always having to be extremely careful with money, etc. People manage in low-paid jobs but it's really tough; don't underestimate it.

When I first moved out of home I was single and had a large mortgage and personal debts. As a result, my monthly budget was exceptionally tight. Every trip to the supermarket involved careful planning. Unplanned nights out were out of the question. Now I'm comfortably off. On Tuesday our car got a puncture. We had to spend £338 on new tyres, completely out of the blue. Three weeks ago my oven packed up and had to be replaced - £500. Over £800 in unexpected expenses in just under a month. If that had happened back when money was tight for me, it would have been incredibly stressful. As we're now comfortably off, it's briefly annoying and then we get over it as it's one of those things. We save hard and are overpaying our mortgage and aim to own our home outright while still fairly young. Not having to pay rent/mortgage will be a massive step towards financial freedom. At that point we might consider lower paying jobs or doing something different. I don't think you've built up the wealth to do it yet from what you've said about your situation.

perth_worker

Thank you for all your response - it has been really nice and helpful to read all your opinions!!!

Im a very grateful for this site - I have not been able to share with anyone in person what I have written in this post as I know my friends and family would just tell me to toughen up and laugh at my face and think I am being completely stupid.

The thing I find really bad about my work is when I have to go on a mine site. I spend roughly 2/3 of the year in a office but 1/3 of the year on site, where I have to do 14 days straight on site. The work in the office is hard, stressful but actually bearable, whereas the work on site which in theory should be easy is the worse part of the job and feels like i am in prison as it is very very isolating..

I know it makes sense to stick with the job I am currently in - I make good money and if I stick it out for one more year I can apply to be a permanent resident of Australia (which I guess would be useful).

I really like the idea that some of you suggested about aiming to be a bit more financially secure and then exploring a different career paths (research, government work), which may not pay as much but might be a bit more enjoyable for me. This seems like a very achievable target.

The question I have, is how much is financially secure before it is advisable for me to explore a different career path. I know this depends on the lifestyle I would like to have and obviosouly the more money you have the easier it is, but I would like to aim to save a target amount rather than 'as much as you can approach'.

I kept a spending diary for a few months and I think I spend around 1-1.5K a month an I have a fairly average lifestyle. Should I aim to save ten fold of this amount?

atush

In your case, i would have a min of 18 months-3 years of living expenses so that you could retrain into something else, or just get a lower paid but less stressful job and have money behind you for property etc.

And I would stick with it for that extra year as permanent Aus residence will open a whole new world of work opportunities for you. But I am sure you have holiday time saved up, so make sure you use at least a week after your next few onsite mine placements. This should destress you and help to keep you working.

ermine

perth_worker wrote: »

Anyway having worked full time for two years I am so feed up of the rat race. By that I mean, I do not like the stress, comptetitiveness and the amount of hours I have to work,
[...]
In saving that, I have made a considerate amount of savings. I have 50k savings and I am only 26yrs old.

I feel like that I just want to quite my job... just work a few hours a week doing a dead end job in tescos just so i have enough money to go by and just chill and enjoy life and not focus on saving money, buying a house/car anymore.

You ought to see what it looks like after 30 years of the rat-race Seriously, though, 50k is not a lot of savings where you have no other assets to your name.

Google early retirement extreme. Early retirement is all about reducing your outgoings and spending, not so much about raising your income.

You can get a return of about 5% over inflation with a well-diversified portfolio of index funds. That means you need 20-25% of your outgoings saved. So if you want to match the National Minimum Wage of about 12k you need capital of about a quarter of a million pounds. So you could work another 8 years, save like crazy, and then not work again if you could get your outgoings down to that low.

That gives you a rough idea of the magnitude of the problem. You can retire by 30, but extraordinary results require extraordinary effort.

Provided you're prepare to accept the compromises, benefits can offer another route out. But you will always be at the mercy of the current government and national mood and it's probably safe to say that the benefits regime will be less generous going forward