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i_was_taught_2b_cautious

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diamonds

Spending on experiences such as holidays, dining out, buying your favourite bottle of Brandy etc. Basically something you don't physically have once purchased or


Actual items such as cars, gold bars, watches, mobile phones, number plates, computer consoles,, cameras etc?



I tick them all as luxury - food, roof, phone and travel are basics. I save a whisper short of 78% of my monthly income.

Savings of 5K in 10 months, that included a overdue back payment, but £3000 savings.

Now banking £700 per month savings Feb 16-17.


State 'welfare' of Housing Benefit entraps poverty, extra earnings equal less housing costs. Work harder for no gain?


Going for a mortgage will leave me £250 better off on paper than now, but £100 'rent' with a rising asset and extra wages all mine not deducted by means tested housing costs.


Re-evaluate life, the luxuries aswell as the bills. Save as much as possible

Linton

The best strategy I have found is to make a long term plan of income, savings and expenditure ensuring that your spending remains constant in value terms throughout your life despite possibly major changes in income. So you are ensuring you arent wasting money today you will need tomorrow nor living on the breadline now when you dont need to.

Before you do that, you do need to have saved enough so that you can withstanding major unexpected expenses or drops in income for say 6 months. That should be an over-riding priority.

Thrugelmir

i_was_taught_2b_cautious wrote: »

How do you find that balance between saving and spending?

Key is to manage money sensibly. Borrow as little as possible pay in cash. Learn to appreciate life itself not material things. i.e. a holiday is a state of mind not a long haul flight.

Mrs_Z

What has worked well for me over the years are these 'rules of thumb':
1) spend less than you earn
2) save 1/3 salary - this is money not to be touched - unless it is for something really big like a property purchase
3) money left over after the savings and essential bills is used for 'luxuries' like holidays, and non essential items, ie. nice to haves.
Of course the above is rather relative and depends on the total salary, but even when I was earning much less years ago, I have always managed to save something. Apart from the mortgage, I have never borrowed money to buy something. If I can't afford it, I won't buy it - or I wait and save until I can (old school, eh?)

jaydeeuk1

Use 1/4 to live, ie mortgage, bills, food
1/4 in long term savings like pension
1/4 in savings for shorter term like regular savers,
1/4 to use/waste as we please enjoying life.

LXdaddy

Mrs_Z wrote: »

What has worked well for me over the years are these 'rules of thumb':
1) spend less than you earn
2) save 1/3 salary - this is money not to be touched - unless it is for something really big like a property purchase
3) money left over after the savings and essential bills is used for 'luxuries' like holidays, and non essential items, ie. nice to haves.
Of course the above is rather relative and depends on the total salary, but even when I was earning much less years ago, I have always managed to save something. Apart from the mortgage, I have never borrowed money to buy something. If I can't afford it, I won't buy it - or I wait and save until I can (old school, eh?)

and the most important of these is number 1)


I have borrowed money as the Mortgage and also had loans for car purchase quite early in my working life - but still very much had monthly outgoings which were less than monthly income.

Snakey

Cut your cloth according to your means, is very good advice - the biggest financial problems I've seen have stemmed from people feeling entitled to a lifestyle that they cannot afford. Also, only get into debt for an appreciating asset or an investment (such as education).

My habits vary according to my circumstances and needs. I spent a two-year period quite recently saving every penny to the point of not having a life - but I bought the property I wanted, so it was worth the sacrifice. A couple of years before that (when I had just come out of a relationship) I was booking theatre tickets and long-haul flights without a twinge of guilt or regret. You wouldn't have thought it was the same person.

When I do spend money I prefer experiences rather than possessions. Some of this is because I was in rented accommodation for so long, so that too may change.

Like diets, whatever you settle on needs to be sustainable (unless you have a very short term savings goal). Better a little bit each month for your whole working life, only taking it out to buy the things you were saving for, than three months spent putting away more than you can afford and then needing to take half of it back out again and not bothering after that because you feel like you failed.

TrustyOven

I find this helpful:
http://www.getrichslowly.org/blog/2011/05/02/how-to-build-a-better-budget/

Personally, I'm not sure I'd always want 30% on wants vs 20% on savings.

But the article is very interesting, and I think the book is supposed to be interesting - it's on my Amazon wishlist - Senator Elizabeth Warren (the co-author) is very cool, having seen some of her videos on finance etc.

atush

Luxuries are important, and should be budgeted for. But if you cant afford them (w/o borrowing, or not paying into pensions, not saving etc) they are just that- luxuries to be denied.

So really the only sensible thing is to spend less than you earn, after tax. And save the rest.

And use that savings according to your wants and needs. Knowing the difference between wants and needs being the difference between having large savings or not.

Pincher

Fulfilment is only satisfying when you really wanted it.


My Alfa Romeo drained me of all the money, during the few years I had it, but I loved it so much. If I had £1,000 spare to buy ARM shares, I would be bloody rich now, but I didn't even have £100, because of this demon succubus.


Getting a new car in April, hardly any excitement anywhere in my bones.