How to fall in love with saving money

JoJoC

A week already? Time flies!

Your savings are looking really healthy you'll be winging your way towards your target before you know it. Do you count pension contributions towards savings? I never really think of it as savings...

I need to get back on the savings wagon- we went out for a friend's birthday on Saturday and spent far too much money! We are now pretty skint and bills are coming out tomorrow so I'm feeling a mixture of guilt and annoyance at myself.

Our belts are tighter this week and hopefully when I get paid on 29th I can properly prioritise our money and have a really good month! We NEED a good savings month!

Lomcevak

Howdy all - catching up too after minimal MSE time recently. Work's been a bit of a nightmare, long hours and lots of stress, but a week off now so things looking up a bit - feeling relaxed for the first time in ages although makes me realize how stressed out I actually was

Due to the way YNAB works i'm simultaneously having a great savings August and a bit of a wobble that'll mean a fairly awful September; just a touch over £17k now so almost at my target for this year, but seem to have managed lots of spending this month too. Have decided I need to smarten up a bit at work as some of the clothes are becoming 'well loved' as they say (at the level now where I have to dress to meet client expectations, which annoys me no end) and a complete refresh of the wardrobe has set me back the better part of a grand and still needs a second suit - i'm cursed with not fitting bog standard off-the-peg, while just to taunt me Italian suits seem cut to fit brilliantly. Coupled with some pre-autumn maintenance around the house (how depressing is that!) and some other odds'n'ends it feels like a very expensive month. Nothing individually huge, but collectively enough to make me stare at the budget in disbelief and there's a fair bit of month left to go

Do you count pension contributions towards savings? I never really think of it as savings...

Just to be confusing, I have two pensions, one of which I count as savings and the other that I don't! My work pension doesn't count, disappears out before I get paid and I never 'see' it, but I also have a SIPP that I do count as savings. Not totally sure that logic stacks up

cathybird

Morning all! Lovely as ever to see people's posts hi JoJoC! I don't think I would have counted the pension as savings before George Osborne announced the reforms earlier this year because before that there wasn't any straightforward equivalence between what you saved and what you might end up with, since whatever you saved would generally be transmuted into some form of annuity. But since the reform, everything that gets socked away into the pension can be taken as a lump sum at the end, so it does actually operate as savings now, as far as I can see. I may be missing something? I actually suspect a good many people "underpay" their pension or don't make proper provision because they don't see it as a form of savings. But it always has been, just a complicated one, and one that didn't necessarily pay out properly at the end.

Oo-er Lomcevak! You and your Italian suits Are you going to post some piccies? ... You sound like you're doing well with the savings I can't help noticing that both of you are saying you spent loads this month but that's life - it's not all about pinching pennies, but about keeping it within your means (I say this as though I'm an expert which obviously I'm not, but it is the lesson you learn if you hang around MSE enough). My friend who just died ticked me off six months or so ago about some travel I wasn't sure about booking because I was saving money and she said that there's no point focussing on putting it all away for some distant point in the future that might never come - life should be enjoyed as well. And she was right.

JoJoC

You make a really valid point about not scrimping and saving every penny. My friends and I had a wonderful night out, a meal, plenty of drinks, dancing, fun - we really let our hair down.

We've both got kids and this kind of get together only happens once a year if we are lucky. So now that you've put it like that I don't feel quite so bad. I'll still be happier when I have more money in the bank!

Your friend imparted lots of wisdom!

Do you have many plans for the week Cathy? My plans just involve working then husband is away camping at the weekend with his friends so it'll just be me and out little boy all weekend. We might do something with my mum or just do whatever we fancy depending on the weather.

Lomcevak, your Italian suits sound fabulous! It's always worth spending money on a decent fitting suit, even though it might be irritating to have to do so.

[Deleted User]

I am using Excel to keep track of my progress on savings. It is shocking to see the difference that an extra £5/month can make.

Here is a link to the online training, hope this helps! Plan payments and Savings by using financial formulas

atush

Cathy, so nice to see you back, and so sorry abt your friend.

I have to cover a few facts, as I dont think you are aware of them re pensions.

but now that pensions have been overhauled so they can be taken as a lump sum to be invested at retirement

And

before George Osborne announced the reforms earlier this year because before that there wasn't any straightforward equivalence between what you saved and what you might end up with, since whatever you saved would generally be transmuted into some form of annuity.

Actually, it has been the case for a number of years now that you DONT have to buy an annuity with pension pots. This was changed a while back. So you, like many, were avoiding pensions for no good reason. As you could have had a Capped Drawdown in that you take your 25% tax free, and then a yearly amount set by the GAD rate which was from 6-9% of the fund annually.

However, what has changed is, that you can use Flexible Drawdown (which used to be restricted to those who had secure pension income from FS pensions, state pensions, and annuities of 20K or more annually). This means you can draw any amount from your pension, the first 25% being tax free and the rest as taxed income (at your highest rate if you still have an income).

But, annuities may in fact still be the best way to go for some people esp those who are long lived, and have little or no interest in learning about investing money, or dont want to pay someone else to do it for them.

After all, there isn't much point in tax relief helping you build a fund of over 100K, then having 40-45% of it taxed as income. Drawing it over a number of years using your personal allowance or even basic rate tax over that amt is far better.

AS for taking it out and investing it for income, you dont have to take it out into a place where it is taxed. It remains tax free for growth and income while in the pension. You can leave it in the pension to be drawn out yearly as described above.

cathybird

hi atush! Nice to hear from you. I was speaking in rather "broad brush" terms about pensions to say why I was including them in my total savings. Perhaps I didn't explain very well? ... Anyway, I do know about them, but thanks. I actually thought of you this morning in a completely different context, about people becoming farmers - for some reason the thought of you with your acreage and island life came to mind. I'm feeling the time may come when I have to move out of London to somewhere greener and with more space. Not yet though - not in a position to, sadly.

atush

And here I am thinking of selling up and moving to town lol.

JoJoC

I don't think I'll ever be entirely happy! We live in a fairly large town with Glasgow City Centre 20 mins away, but the countryside about 10 mins away. I think this is the best I'm going to get! I always think I'd like a place in the country but I love the city amenities

How's the weekend looking for everyone?

MrCrimeFiction

Hello all. Nice to see everyone is doing so well. I've just joined and starting debt busting and saving. This website is amazing.

Keep at it , don't loose faith and you will be rewarded with £££.

Wishing everyone all the best with their dreams and goals