Attitudes to Saving

MERFE

I think its really important to have some savings, it gives you options. When we had to move suddenly having savings meant we could go where wanted to.

I tend to have 4 savings accounts

1 is long term saving, hoping for a house deposit currently only a little goes in it but as debts are paid off it increases.

1 is for Christmas and Summer and Birthdays so gets raided throughout the year but it covers these events.

1 is for things that go bang.

and the last one is like a little treat fund, it has a small standing order for an amount I wont miss and is slowly building so if there is something I want or more likely want to do I can use this. I really want a new camera, using my phone at the moment but once this account reaches enough I will get one.

theoretica

I think of savings in lumps:
-things which will happen and we know when (Christmas, holidays, insurance bills). More budgeting than really saving.
-things that will happen sooner or later but we don't know exactly when (car, boiler, white goods, laptop, redecorating). If you expect your car to last 10 years +/- you need to put aside 1/10 of the value every year (and carry on doing that even if the car reaches 12, because the next two might only last 8 years each).
-long term savings - to be considered in event of unemployment or house move or major need, but hopefully eventually forming part of the retirement fund.
-spendable savings, because I might want something later more than I want to spend the money now.

Ilona

I don't deliberately set out to save, I don't put money aside in separate pots for specific items. My pensions go into my bank account, my state pension weekly and a small private one every four weeks. This is the only bank account I have and I don't save money in jars.

I focus on only buying what I need, I don't buy impulsively, everything is planned right down to the treat of a small bar of chocolate or a bottle of wine. I limit the amount of direct debit payments in favour of paying my bills into the bank with a cheque. That way I can keep a watchful eye over things and feel I am in control.

I look at it this way, the money I don't spend stays in the bank. I forget about it because I know that every month I will get a statement, and every month I know the balance will be the same or a little bit more than the previous month. I have saved without even thinking about it. I don't need to stress about having enough money to replace broken appliances or change my car.

This works for me. I know that some people plan on saving a percentage of their income and putting it away somewhere. Quite often these savings get dipped into because the budget hasn't quite gone according to plan. Often through lack of discipline with spending, and not knowing the difference between a need and a want.

Discipline and priorities are at the heart of all personal money management. We all know that Christmas comes once a year, the car may not last very long if it is older, the washing machine will conk out sooner when a family of six is using it rather than a single person, a holiday in the summer is going to cost x amount of £'s, etc.

Cut down on your day to day spending and watch the bank balance creep up, but you have to be super disciplined.

Ilona

HappyMJ

I keep an emergency fund of at least £5,000 which could cover any foreseeable emergency I might have. The worst emergency that I can imagine would be If I were to become hospitalized and unable to work. This will cover 3 months worth of expenses before it runs out. Hopefully by then I should have claimed benefits from the DWP and council to be able to replace a part of my income and pay some of my expenses such as rent and council tax.

I may even go further into debt to make ends meet by the increased use of credit cards. I'll have to sort that out later but at least the minimum payments would be made on time every month and my credit will not be seriously affected.

WantToBeSE

I have 2 savings accounts.

1 is my £5K fund. I dont touch this at all unlessi can help it.

2nd is for Christmas/Birthdays

I want to open a 3rd one for everyday stuff, like saving for household things (furniture etc).

EssexHebridean

I've been EXACTLY where you are OP! Started out here in debt, albeit not in a big way thank goodness - but we were in overdraft every month and accruing bank charges, plus paying off a loan. The mortgage was just the mortgage and we envisaged it running along as they do for 25 years...

The combination of a friend showing us the benefits of OP'ing the mortgage, plus recommending this place, saw everything change though - the first thing being setting a proper budget and sticking to it. Things like setting aside money for insurances and actually budgeting for a holiday made the biggest difference to us - and I remember reading something early on that's really stuck with me. Reading through comments on someone's SOA - a reply asked where the cash was for the amounts they said they set aside each month for car maintenance, holidays etc...as if they *really* accounted for this there should be a cash asset shown somewhere...otherwise they were simply looking at a false picture not where the money was really going. Yes! Made total sense to me - so we started setting up savings account off the back of our current account for all these odds and ends. We worked out the annual running costs for the cars, and set up a monthly transfer for a 12th of that to go straight into an account, Another account saw a 1/12th split of the estimated cost of our annual holiday, and now there are others for general household expenses, and even fun stuff! I've set up everything to be automated - so each month transfers whizz off the all the savings pots, plus to each of our current accounts for our personal spending money. The random regular spends - diesel, Mr EH's travel, that sort of thing, get paid on the cashback credit card in the first place so that money stays in the joint account ready to transfer across to the card.

For me, this method really works. It does rely on you setting a budget and sticking to it, but that's fine. Any surplus at the end of a month gets transferred out and popped into our savings account for overpaying our mortgage - something which we're now on target to have paid off in 14 years rather than 25...

yuiop220

It's all in a bank account earning next to no interest at a moment. I'm going to shift it to a few higher interest accounts.

I save about 50% of my net salary and I don't spend on random things. I end up spending a decent amount on food though.

I was thinking about buying a second property recently but have decided against that idea for the time being.