Is it normal to not have any savings?

Thatsthespirit

I'm 23 with a mortgage since I was 21, however entering the real world has made me realize how damn hard it is to save. I live on my own, so money in is just about covering expenses with leftover to spend on me - which really is not much. But forgotten bills keep popping up like TV license and car insurance leave me with barely nothing in my savings - I'm talking £500. Is this normal?

If the worse should happen and something break down or lose my job, I guess my family would help me, but I wouldn't expect that - I'm trying to fend for myself.

Anyone been in similar situation?

Linton

I dont believe having no savings is unusual, sadly. But it must be a very stressful life not knowing if you can last til the next payday.

I think it would help if you got yourself organised - car insurance and TV licence bills shouldnt be a surprise.

The key task is to prepare a budget. Make a list of all the things you need to pay annually/monthly/weekly with estimated amounts. You can then work out your annual expenditure. You know your annual income and if that is more than the annual expenditure you are OK. If it isnt you need to find some way to solve the problem - more income or less expenditure.

Next, set up a savings account and put into it immediately after each payday more than sufficient to pay for the annual bills over the year. How much more is a balance between savings and immediate fun beyond your essential monthly/weekly expenditure. Suggest you focus on the former but dont neglect the latter.

sorcerer

Unfortuenly your not alone with struggling from paycheck to paycheck. Hanging around in this forum, might suggest everyone is flush with cash, but this is not the case for a large portion of the general public.

You can put together a little diary of bills to pay, normally they come at the same time each month or year. So put together a little calender for yourself so you know what's coming up, and right down what you would typically pay, so you know how much money needs to go out.

xylophone

Make sure that you have the best current account for your circumstances.

You need a budget.

You might want to set up a second interest paying current account to hold the monthly amount you set aside for known annual bills and emergencies.

downhillfast

Thatsthespirit wrote: »

Anyone been in similar situation?

YEP! Most people have at some point... and a lot of us here have learnt from it and turned things around.

The best thing you can do is properly budget - you'd be amazed how much money you can save when you know exactly how much you really need to spend!

Have a look at the thread on YNAB (You Need A Budget) it has been totally life changing for some people in how it deals with small 'purses' of money that allows them to budget for yearly, monthly, weekly expenses etc.


YNAB Thread

PasturesNew

Having no savings is, for many, a reality. Even if you have savings, the first disaster (that you were saving for "in case") puts you back to square one.

£50/month saved takes nearly two years to save £1000. One big disaster and that's wiped out.

It's not easy. So long as you have a saving ethic, and save what you can when you can, then be happy that you're on the right route and just need a bit more income or a lucky win

The easiest way to save £1000/month is to get yourself an "other half" - as most of their wages is spare

Nick_C

OP - you are doing well even if you only have £500 saved. Many people are constantly in debt. You have also done well to get on the housing ladder so quickly.

My concern in your position would be that there is only one way interest rates are going to go and that is up. You should look at how a 2% rise in mortgage interest rates will affect your repayments, and then decide how you cope with that when it happens. You are young so your salary from your main job will hopefully increase in real terms over time. But while you are young and single, perhaps you could take on a second job to help you save. You need to try to build up a contingency fund.

PS - If you have a spare room, consider taking in a lodger for some extra tax free income.

richyg

You are an ideal candidate for YNAB software - You Need A Budget

Google and then watch a few videos and get a free trial download - also definitely attend a couple of the online webinars.

It should help you to set a budget with categories including car insurance,hoidays etc and really help you to see where you money goes and how to build some savings pots up.

Its an old but simple technique in principle call zero cost envelope budgetting where you give every £ a task in advance and track spend against budget categories.

If you learn this technique at 23 you should be ahead of most of your peers , set for life and good to go.

R

colsten

I would echo the YNAB suggestions.

Also, consider doing an SOA and posting it on the Debt Free Wannabe board as there may be options to cut your spending.

The other thing you could consider is making a few hundred pounds between now and Christmas from switching bank accounts. This doesn't have to involve your existing current account - just get yourself a donor account or two, a couple of Tesco savings accounts for any DDs that might be required and you are set to go. Once you have a Nationwide account, you can also refer friends and make up to £1,000. Info on all those offers are on the forum.

george4064

In addition to what people have said already, here's a few things you can consider to try help save;

- Look at all your regular expenses and see if you can cut them by either switching or downgrading (TV subscription, Netflix etc, Amazon Prime. Mobile phone bill [think Giff Gaff], shop around for best car insurance, shop around to see if you can switch to a better/more suitable mortgage deal.

- try setup a savings account somewhere that takes your money shortly after your monthly pay check, consider it a 'savings tax' and stay disciplined with regular saving in small amounts.

Tigsteroonie

Is it normal to not have any savings?

On the Savings & Investments board where you have posted - probably.

However if you posted this over on the Debt-free Wannabee board, it's pretty common

So it depends who and where you ask. I've been in both situations - had savings, had no savings, starting to have savings again.