Really bad at saving

sendan

Hey. I've not long turned 21 and have been a postman for 2 and a bit years and still stay at home. For my age my wages are pretty good but I really struggle to save money. Its not that I spend too much (although still more than I need) but when I look into my RBS banking app and I see that my ISA has some money, I get the sudden urge to spend it.

For example. Last year I had a 1.2L 62 plate ford fiesta and the day before my 20th birthday, because I had over 10k in savings I decided to go buy a 2L BMW 3 series just because it was faster to 60mph. Not that I don't enjoy having a BMW, I love it but it wasn't a necessary purchase and was only because I could see I had money to spare.

I need help to keep me focused on saving and keeping it saved as since leaving school, my plan has been to purchase my own house by 25 with as little mortgage as possible. I have started putting £30 a week towards two different Funds with Hargreaves & Lansdown which seems to be going well so far.

My question is, is there any other things I should be doing to somewhat "trick myself" into not spending when it appears I have money. Should I put more money towards H&L funds or would this be too much of a risk due to them being able to go both up and down in value.

Some other things ill add:
I have 2 current accounts and 1 ISA with RBS: 1 current account is for general stuff and where I am paid weekly, the other is where my direct debits are for phone and car insurance and other monthly payments.
I have bought £200 worth of gold some point last year as investments.
I have employee shares which ill be able to sell next year or in 3 year times taxfree.
I have bought £1k of shares in a property development company just last week.

Thank you for your help and thank you for having me here at MSE.

sendan

I should probably have added that the funds I am doing are:

"Fidelity Multi Asset Income (Class Y Inc) Income," and
2HL Multi-Manager Asia & Emerging Markets Accumulation"

Both at £15 a week. I only did an hour or 2 of research before doing these buy am able to change which funds I am investing to at a moments notice so if theres advice against these or for any others I am willing to change.

Eco_Miser

Work out how much you need to buy and furnish a house, then consider yourself to be in debt for that amount, less what you have actually got. Keep a record of how much more you need to save each week. Then don't spend more than you need until you've moved in.
Joining the Save £12000 in 2015 thread, and other challenge threads may help you to concentrate on saving, not spending.

masonic

sendan wrote: »

My question is, is there any other things I should be doing to somewhat "trick myself" into not spending when it appears I have money. Should I put more money towards H&L funds or would this be too much of a risk due to them being able to go both up and down in value.

Well investing in S&S is not consistent with your stated objective to purchase a house by 25 with as little mortgage as possible - your investment horizon is too short. There is still an appreciable risk of losing money over that timeframe.

As Eco Miser points out, your focus should be on how to be disciplined when saving - Perhaps lock the money into regular savings accounts and lock the proceeds into fixed term accounts if spending is going to be too much of a temptation.

sendan

ok thank you. Will look into fixed term accounts.

atush

Its not that I spend too much (although still more than I need) but when I look into my RBS banking app and I see that my ISA has some money, I get the sudden urge to spend it.

Of course the problem is you spend too much, the above is the definition of doing so?

For example. Last year I had a 1.2L 62 plate ford fiesta and the day before my 20th birthday, because I had over 10k in savings I decided to go buy a 2L BMW 3 series just because it was faster to 60mph. Not that I don't enjoy having a BMW, I love it but it wasn't a necessary purchase and was only because I could see I had money to spare.

Again, the Same definition.


The biggest thing you need to do (if you ever want to get out of your parents house and into the real world) is make a budget, of your outgoings. And your leisure budget. Keep this money easy to spend in your current acct.

And put the rest of the money, by DD into another acct harder to get to for most (ie a regular saver you cant touch for a year) and the investments you are doing now. And put the regular saver money into a term savings bond when it matures each year.

And join your work pension if you haven't.

Come back in 3-6 months and tell us how you get on?

londonTiger

most people your age are like that, you will appreciate the value of saving all leftover money and not spending for spending sakes after you move out and have to pay rent/mortgage.

I don't know any of my peers who at age 21 would put away a sizeable chunk of money and that was pre 2008 when banks were paying 5% AER on savings.

chris9393

Hello mate, I'm the same age as you and have generally been pretty good at saving.

The advice I give to my friends (and family) is to open a completely new bank account with a different bank which pays interest and set up a standing order on payday with money to be transfered into that account. That way you barely notice the money has gone and before you know it you have a nice sum of money saved.

Also, when you recieve the bank card just store it away in your room where it isn't easy to access.

atush

you can freeze it in a box of water?

anyway, when my son graduated and lived at home for 18 months he saved 15K. And paid me 55 quid a week for room and board.

You can do it if you budget and it helps to have a goal.

Eco_Miser

atush wrote: »

you can freeze it in a box of water?

Seal it in a waterproof bag first - I wouldn't want to find out by personal experience if water on the contacts damages the chip.

bigfreddiel

I keep thinking about changing my car -that was ten years ago and I still can't decide what to get that will get me from a to b any quicker or comfortably. So until I do decide I keep on using my Nissan micra 998cc four door model with sun roof! Cheap insurance, cheap servicing no depreciation, it cost me £1k in 2004

My point is focus on what you really want.

Also buying gold and other random investments won't work

Keep it simple, by a low cost fund like vanguards lifestrategy 100% fund each month and just leave it to build up. Do it in an isa that will get the bonus for first time house buyers

Cheers

Fj