SOS Problems saving money...

Bigbro79

Well, I've finally given in and dragged myself onto the forum to see if any of you can offer any assistance on the problem I am having. As much as I try I can't seem to save money! Ihave tried the following: opening up seperate accounts and distributing money into categories such as 'disposable income' etc; physically withdrawing a set amount of spending money for the month and telling myself I will only spend the withdrawn amount and finally putting my plans onto paper, working on spreadsheets to create an 'ideal' budget. As a result of these ambitious money saving techniques, I am left with not a penny saved.

As I am getting older it is time to knuckle down now and work on battling and building a defence against this silent assassin- my willpower. To do this I feel that I need an account which isn't accessible ( where I can't decide withdrawing £100 for a Saturday night lastminute.com is a viable option); this account can't be a high interest savings account as it is an account i'd like to add to monthly. To me this seems as though it would be a practical option however I look forward to reading what light others may shed on this situation? Furthermore, if there is an account out there such as the one described which one is best?

Many thanks.

unimaginative_user_name

Could you open a regular saver preferably one which limits the number of withdrawals? The best ones pay up to 8% gross I think. You could set up a standing order to pay a certain amount in each month for the day after pay day and at the end of the year put it into an ISA. You could even open an ISA now and set up a standing order but the problem with the type of ISA you can pay into each month is the rates aren't as good as fixed rate ISAs where you invest a lump sum but can't usually add to it.

Just a note about regular savings accounts - you only get the full rate on the initial investment. You get eleven twelfths on the second month's investment, ten twelfths on the second month and so on.

Have a look at Martin's banking and savings tab for a list of the best accounts within each category but whatever you decide if you find willpower difficult, I would recommend a standing order for the day after payday so you are treating it like any other bill that needs to be paid.

JohnRo

Maybe take a look at p2p lending? I use Ratesetter and that removes the "problem" of instant access to your cash but does allow for a relatively short monthly access period where money can be rolled into another monthly contract or withdrawn.

The amounts you can use to create a lending contract are also very low, starting at just £10

R_P_W

Maybe you need some motivation to save? I assume from your name you are 33? Are you single? Married? Kids? Mortgage? Pensions?

The only person that can change your behaviour towards spending/saving is you. You know you have to to save otherwise you would be on here asking the question.

I used to be like you up to about 5 years ago. I was single, earned decent salary had a house and a mortgage. I was 'comfortable'. I probably had about £15k of debt hanging around in the background though - so it was an illusion really. I didnt have a penny saved apart from my pension (which luckily i started when 19).

I have been very very lucky in the fact that my employment has remained secure. If I had lost my job at any point I would have been well and truley up the creek without a paddle.

I have just reached 30. Now married and just taken on a sizeable mortgage buying a flat in London.

Basically what I'm tryingt o say is I gave myself a bit of a plan and a target to work towards. I wanted to put myself in the position where I had enough money in the bank to support myself for 6 months if i was to lose my job and not have any debt apart from mortgage.

Without having that plan/target in my mind I wouldnt have saved, i wouldnt have paid down my debt.

So ,maybe try setting yourself an achiveable goal - say to save 10% of your salary a month knowig that in a couple of years time you will have started to build a bit of a buffer of funds.

tell_it_how_it_is

If you don't have a pension, perhaps you could consider starting one? Any money you put into that each month can't be "got at" until you're at least 55, so that might prove to be of some useful initial help and motivation.

R_P_W

why dont you post a SOA on here and people can advise looking at your income and outgoings where you can possibly make some cuts to increase your surplus income for savings.

You might be being too optimistic about the amount to save each month.

jimjames

Do you have any "rainy day" savings at all? If not then that is a first priority.

If you do already have that then you could look at some form of share based investment where you the funds aren't directly accessible via a cash machine. Amounts can start from around £50 pm. They are designed for long term savings and can go down as well as up but may suit you if it restricts your access.

opinions4u

Save before you spend.

Carry no more than £10 in cash at any one time.

Leave cards at home unless essential.

Set targets such as £500 by 31st Jan. (whatever amounts and dates seem reasonable).

Save all £1 coins in a piggy bank.

Open a savings account away from your main bank.

Open a regular savings account (e.g. First Direct 8%).

Invest in a pension. You can't withdraw it.

Set up a regular savings stocks and shares ISA.

Be disciplined. See it as fun. See it as central to who you are. And treat yourself at each milestone (small treat).


Prioritise:

1) Crisis account - ideally 3 months or more net pay.
2) Known bills - e.g. car insurance, Christmas, holiday, car service etc.
3) Unknown bills - TV dies, washing machine dies etc.
4) Medium term bills - car, house deposit, home improvement, kitchen replacement.
5) Longer term bills - retirement, holiday of a lifetime, kids going to university.

psychic_teabag

It's not quite clear on what timescale your willpower is lacking. A pension solves the problem for very long-term savings, but not the problem of overspending while wandering round town (or clicking around amazon).

Have you considered notice accounts and/or postal accounts ? They might be just inconvenient enough to prevent you withdrawing on a whim. Note, however, that some notice accounts allow instant access with a penalty - don't know whether such a penalty would be a sufficient disincentive.

Perhaps another option is a branch-based account some distance away. (Maybe just having access during normal hours would be sufficient.)

In all cases, you want the account to accept electronic payments in, and just make withdrawal inconvenient. I think someone already suggested a standing order to automatically deposit an allocated amount.

ed123_2

I think First Direct do the 8% regular saving account mentioned previously. You have to open a current account with them first which has certain conditions, but you get a £100 bonus. They can then sweep the money from your current account into you savings account each month. Another idea would be to try and build up to say £1000 in a instant access account then place this in a fixed term account say 1/2 years then you wouldn't be able to get at it! (plus use your ISA allowance) But a pension is the best long term method of saving as others have mentioned re tax relief etc.....ed

downsizer3

30 day notice accounts and direct debit every month. It'll go in automatically and you can't get at it quickly.