How to fall in love with saving money

JIL

Sorry to hear about your friends.

cathybird

Morning all! Gorgeous spring morning, though I believe it is going to rain later. Payday for me today (yay!). I looked at my account and saw the dinner I bought two nights ago and felt a huge twinge of annoyance again as I looked at the amount. There is no doubt about it, I've at least partly turned into a saver.

Thanks all for your good wishes about my friends/colleagues.

cathybird

Re focus888's question on pensions, here is a Mr Money Mustache post about this very thing, hope it helps.

I should sit down and work it out too - it would be very useful.

cathybird

Focus888, might give the No Spend Days challenge a whirl - although as it is I think I probably do have a lot of no spend days, but don't think about them. So maybe I should think about them

atush

boglehead wrote: »

Very rough approach

Start with how much you need today, exclude expenses related to kids, mortgage and commuting. Bump up your travelling and going out budget. Generally accepted principle is that you will roughly need 80% of your current budget.

Let's say it's £25k a year for sake of argument. If you are eligible for a state pension (assumed to be around £13k), then you will really only need an incremental £12k of income.

In order to get £12k of annual income, you will need a £300k pension pot, which will generate a 4% return after tax. In order to get a £300k pot by the time you retire (which seems to be in 30 years according to your post) - you would need to save £420 a month for the next 30years... invested at 4% as well.

You will notice that I have excluded inflation - and that's because the return figures I have shown are in real terms - so no need to take inflation into consideration.

It's very basic, but I hope it helps you get an order of magnitude

In general I agree with this with a few small points. 80% is high for most I think (many say 50-65%) and I won't have to bump up my travel budget as with 3 boys I will spend less going the same places (esp long haul which will be most of my travel) as I won't have to go during school hols, and it will be just 2 people.

My food bill should halve as well.

In fact, I am having a hard time estimating costs for retirement as we have a huge house (5 bed, 3.5 bath 3 receptions) so will be downsizing to something much smaller. Costs a lot to run this house, esp the oil for the rayburn.

focus888

Morning all, thanks for all your advice about pension, will try and figure out a budget that i think i should need to live on and work from there.

I didnt realise how much money i was wasting before i joined the NSD challenge. i think even one less spend helps. Worth a try.

JoJoC

Focus, I'm planning on joining the NSD challenge for April (if there is one!). Will start on Monday after payday.

Back at work today after a few days off ill. I'm still feeling pretty rubbish but a lot better than I was so I'll take that as a victory for now!

Looking forward to seeing how much I can save tomorrow. Husband is doing a homer now and I can't remember how much he said he'd be making so that's a nice last minute bonus into the pot hopefully!

Hope it makes that £2k closer to get this week!

How are you Cathy? It's so funny that the dinner has annoyed you so much- I suppose you'll think twice about it next time.

The pension stuff baffles me Atush but I know I need to spend some time sitting down and working it out. As it stands, we're in our childbearing years which are pretty damn expensive so I expect that as costs become less in 15 years or so (and wages hopefully get higher!!) we'll be able to increase our pensions contributions substantially. At the moment I pay in around £120 per month, my company matches it and there's some kind of tax relief type thing walloped on top. As you can see, I don't know much.

cathybird

hi all! I haven't really sat down and worked out how much I need in retirement either. I wonder if the Tories' move to dismantle annuities and let people manage their own pension pots is paving the way towards reducing the state pension? I did read that somewhere.

JoJoC, you're doing really well, getting closer and closer to that £2,000 I'm well today, very tired - it's the end of my working week, I have tomorrow and Saturday off - lots to do, seeing a friend, going to the theatre, work to do on the allotment - looking forward to it all but worn out tonight, going to bed soon. Glad to hear you're feeling better, you did sound poorly.

My three months off alcohol is going really well btw, it was the three-week mark today and so far it's been easy peasy - I haven't even really missed it and I feel much better, clear-headed and sleeping better, as opposed to woozy in the mornings, which I am even if I drink pretty moderately. I might do this as a regular thing, I think.

Focus888, you've persuaded me - I'll join the NSD challenge.

atush, sounds like you've got a great house! But as you say, sounds expensive to heat, especially since you're in the chilly north of the country? ... Would you downsize to a smaller place where you live now, do you think? Or would you move?

cathybird

Morning all! Grey foggy morning here in London town. It's pretty close to the end of March now - that's a quarter of the year gone in the blink of an eye. In fact I should probably mosey on over to the "Save £12,000 in 2014" thread and declare, because there probably won't be anything else for March.

I have a day off today and plan a visit to the allotment and a trip to see the Viking exhibition at the British Museum with a friend - we're having afternoon tea there, which probably won't be too MSE, but I will enjoy it (and it will only be a sandwich or a piece of cake and a cup of tea, so not too extravagent, at least not compared to my previous form).

Hope everyone else is having a good and MSE day

JoJoC

Morning Cathy,

Sounds like you've got a lovely day planned, and a busy weekend at that!

It's a bit grey here too (outside Glasgow) but I'm hoping the sun will come out later. After lying in bed ill most of the week while the sun was shining, I need some sun!!

I can't believe that's a quarter of the year done already! That's a scary prospect when I look at how much I want my savings target to come along this year. I am actually on target (25% saved exactly) but no room for blips or hiccups!

Well, I made my £2,000 target. I'm so, so pleased! It's so nice seeing it sitting there knowing that I made this happen. If I hadn't given myself a stern talking to at new year, it would probably still be looking sad and pitiful!

I've just asked on the march thread if anyone is planning on starting an April one because I really want to join this challenge this month. Haven't a clue how many NSDs I should be able to manage but I should be able to work out the days that I will need to spend and go from there.

I'm meeting a friend today to go and sort out Mother's Day gifts. My sister and I are taking my mum out in Sunday evening but must get something nice for husband's mum. She deserves it