30 years old - am I spending too much of my salary?

MiddyMum

guitarman001 wrote: »

Why? If it's because of the large sums of money... then I admit I also used to be shocked. No more, however - I know too many personal stories to be shocked by either extreme of the wealth chain. If not, why do you think it is a wind up?

I think it was when the OP said he " trys " to eat out once a day, sounded a little odd but he has since clarified that matter. I don't know, I guess you get a little radar for posts that sound a little off the more you use forums.

guitarman001

Life up here is actually pretty good. OK, there are a lot more 'scummy' types, but I can buy a 4-bed detached house with garden for less than £180k 20min drive from work (not the BEST area but not terrible - and yes, that would be a struggle if I weren't living at home and girlfriend had money from her flat... don't fancy my friends' situations paying into a £170k mortgage for 35 years by which time the interest will have doubled the total price). Weather isn't as good but hey. And it's a lot less busy up here - I think you'd be pleasantly surprised. Good luck!

EDIT - Sorry, if you meant North of England as opposed to Scotland there. I'm sure that's good, too. I'd take any low-cost place over a high-cost place long-term regardless of salary (to a degree!).

Eellogofusciouhipoppokunu

racing_blue wrote: »

Well, at risk of sounding mercenary, amassing a pile of money - capital- is exactly the point! Capital gives you all sorts of options. Just by existing it gives you more money, so you don't have to keep going out to work if you don't want to. Or you can store it in a house to live in etc etc

I don't see the point of saving just for savings sake. Isn't that what a miser does?

If you are saving up for a house, saving up for retirement, saving up an emergency buffer (which is finite as you only have so many 'emergencies' that aren't covered by various insurances), a dream holiday, etc. then fair enough. If not, then what's the point?

alexanderalexander

Eellogofusciouhipoppokunu wrote: »

I don't see the point of saving just for savings sake. Isn't that what a miser does?

If you are saving up for a house, saving up for retirement, saving up an emergency buffer (which is finite as you only have so many 'emergencies' that aren't covered by various insurances), a dream holiday, etc. then fair enough. If not, then what's the point?

The idea is that people save now to give themselves greater financial freedom in a future. So just because someone hasn't decided exactly what they're going to spend the savings on at the time they save doesn't make them a miser -- it just means that they know that they will be able to afford something nice in later life which they otherwise wouldn't (whether that be retiring at 55, going on some amazing holidays, or the kids going to private school). Money's always going to be useful!

I enjoy investing for the future as it's a form of deferred gratification -- so at the moment I have the gratification of knowing that I will have the money in later life, and in later life I will have the gratification of actually spending the money! If I spent the money now, all I would have is the instant gratification and none later.

Plus investment compound returns mean that it'll be loads more money in later life of course....

Eellogofusciouhipoppokunu

alexanderalexander wrote: »

The idea is that people save now to give themselves greater financial freedom in a future. So just because someone hasn't decided exactly what they're going to spend the savings on at the time they save doesn't make them a miser -- it just means that they know that they will be able to afford something nice in later life which they otherwise wouldn't (whether that be retiring at 55, going on some amazing holidays, or the kids going to private school). Money's always going to be useful!

If people are saving so they can afford something nice in the future (I assume they have an idea what this 'nice' thing is), saving for kids going to school/college, holidays or retiring, then they are saving with a goal in mind. As I have said, this isn't an issue. I have a problem with saving for savings sake, not with saving for a particular goal. It might be useful for me to give you an example so that you can see what I'm getting at.

Imagine the scenario where someone is saving for a house. They really want a decent house deposit and so they are prepared to cut back on their lifestyle for a while in order to achieve this goal. Once they buy the house, do they then continue to cut back their lifestyle to save at the same rate or do they loosen up and be a bit freer with their money?

I'm not talking about just missing out on Starbucks or taking a packed lunch to work in order to put a normal weekly amount into an ISA for a rainy day. I'm talking about negative lifestyle changes in order to just amass money.

alexanderalexander wrote: »

I enjoy investing for the future as it's a form of deferred gratification -- so at the moment I have the gratification of knowing that I will have the money in later life, and in later life I will have the gratification of actually spending the money! If I spent the money now, all I would have is the instant gratification and none later.

Plus investment compound returns mean that it'll be loads more money in later life of course....

As mentioned already, I'm talking about saving above and beyond what you might need to save for emergency money, holidays and retirement. If 'deferred gratification' is your term for saving for retirement, then that's sensible. If however, you have put sufficient money away in a pension, have sufficient (say 6 months) emergency money saved up, have savings for holidays covered and you're still putting money away as 'deferred gratification', one has to wonder why?

You are effectively deferring your life but with no real goal of when this deferment will end and you run the risk of running out of life before you live. I guess this all boils down to the question of "when is enough [money] enough"?



http://www.amazon.com/When-Is-Enough-Never-Satisfied/dp/1568381972

Jegersmart

A lot of people are making long term plans in an uncertain world/life.

Balance is key, anyone that deprives themselves of anything now to have in later life are setting up to be disappointed. You need to balance your longer terms expectations with actually living your life now. I don't condone extremes in either direction in other words, but I know enough 50-55 year olds who contract an illness and are unable to fulfill the desires they have worked hard to be able to do later in life.....and that really would be the worst thing I could imagine. I usually work on the assumption that I could die today but I put aside some funds in case it happens later:)

J

Eellogofusciouhipoppokunu

Jegersmart wrote: »

A lot of people are making long term plans in an uncertain world/life.

Balance is key, anyone that deprives themselves of anything now to have in later life are setting up to be disappointed. You need to balance your longer terms expectations with actually living your life now. I don't condone extremes in either direction in other words, but I know enough 50-55 year olds who contract an illness and are unable to fulfill the desires they have worked hard to be able to do later in life.....and that really would be the worst thing I could imagine. I usually work on the assumption that I could die today but I put aside some funds in case it happens later:)

J

Thanks for this, a paragraph explaining what took me almost a whole page.

badger09

Eellogofusciouhipoppokunu wrote: »

If people are saving so they can afford something nice in the future (I assume they have an idea what this 'nice' thing is), saving for kids going to school/college, holidays or retiring, then they are saving with a goal in mind. As I have said, this isn't an issue. I have a problem with saving for savings sake, not with saving for a particular goal.

....

As mentioned already, I'm talking about saving above and beyond what you might need to save for emergency money, holidays and retirement. If 'deferred gratification' is your term for saving for retirement, then that's sensible.

....

You are effectively deferring your life but with no real goal of when this deferment will end and you run the risk of running out of life before you live. I guess this all boils down to the question of "when is enough [money] enough"?

Jegersmart wrote: »

....

Balance is key, anyone that deprives themselves of anything now to have in later life are setting up to be disappointed. You need to balance your longer terms expectations with actually living your life now.

....

I usually work on the assumption that I could die today but I put aside some funds in case it happens later:)

J

Some very sensible comments from both Eellogofusciouhipoppokunu & Jegersmart.

At 62, having been a saver, rather than a spender, all my life, I find myself in the very fortunate position of having a decent pension and more savings than I will ever need. I have never gone without anything I really wanted but then I don't have expensive tastes, never chased the latest 'must have' gadget, newest car, or designer labels.

The problem now is in changing my mindset and I will agonise for days over spending on things I don't really need, but would rather like, and which would make my life easier.

Having lost my dad age 64, brother age 61 and more recently, close friends age 59 and 43 I remind myself that life can indeed be brief and that there are 'no pockets in shrouds'.

Notes to self:
1) Treat yourself - because you're worth it
2) If you don't, then some of your hard earned savings will go back to HMRC (whence they mostly came) :rotfl:

edinburgher

On the subject of food I think it important to stress that good quality organic food, food that is fresh without preservatives such as nitrites (pork especially) and investing in a juicer should be priorities for anyone who can possibly afford it

Eating organic food will not make you healthier...

cashbackproblems

I work in central (live in zone 5) earn almost half what you do and still manage to save more than you! Rent seems like a lot if i was earning that much i would definately get a mortgage, you are wasting almost 20k per year combined on rent. My big weakness is spending on food as well epecially lunches, im still too lazy to make packed lunches but have switched to sainsburys from pret!