Why do people save?

ianthy

I was taught to save by my Mum – with a Post Office account and very small sums each week from my paper round. Then when I started work and my co had a regular saver scheme taking a sum out of your weekly pay. I signed up from day 1 and was amazed how £5.00 a week could amount to so much money over the space of a few years. Whenever I had a pay increase or changed job I just increased the regular saver amount or opened another account and made a monthly transfer. My pay has varied from £40k per annum to £250k per annum self employed but my spending habits have never really changed above when I earned £40k a year. This simple process allowed me to save a deposit for my first home without too much pain. Fast forward 25 years and I still use a similar system with my OH, we set our annual budget – monthly spends, holidays, repairs on the house and we generally stick to it - with the odd splurge! I also notice that my OH is more relaxed about changes at work – if the new roles/jobs are not right for him, then he is happy to leave with no immediate job. He has more than enough savings and other income to last him until he can draw his pension. Having savings provides a safety net, a degree of comfort and confidence for unplanned and planned events.

I do think the skill/art/discipline of saving is something that needs to be learned at a young age – my sister who is 1 year older than me. Never bothered with the Post Office savings when we were children and was never interested in saving – Fast foward to age 56 year and she still struggles to manage her money – irrelevant how much she has earned. OH and I are now in our late 50’s and need to stop saving as much and start spending it... which is a different problem.

Eco_Miser

Nationwide8 wrote: »

It occurs to me reading this thread if there comes a point in life where savers become try-to-be spenders ?

I can't see myself raising my regular spending above my pension income (although I do keep reminding myself that I have that much income and could safely spend it) so my investments will keep growing until I either pay for someone to come in to care for me or go into a home or stop needing any care whatsoever.

Nationwide8 wrote: »

If you end up in a home any assets above £23000 ( I think ) will be used to finance your care.So the money you have spent a life time building up,worked for,scrimped and saved for is slowly eroded.

Not so slowly apparently; but that is what that money was saved, scrimped and built up for. To continue to have choices, to not spend time in a TV lounge rank with the odour of incontinence, to have proper meals, to have one's own clothes rather than whatever came back from the laundry.

Nationwide8 wrote: »

If you have no money you will be looked after anyway.Money gives you more choice I suppose but you get the point.

See above.

Nationwide8 wrote: »

If you manage to stay at home with no paid for help from anyone is it better to spend while you can the money you have saved all your life rather than leave it to a charity or whatever.

Yes, but only if you want what the spending buys you.
If you are going to leave a lot of money you can even buy a sort of immortality by getting your name on an annual prize or event, or on a building.

Nationwide8 wrote: »

can a life time saver become a late in life spender and should they even try ??

They could, and there's no point in continuing to scrimp and save when they've got more than they're likely to spend, ever; but old habits die hard.

atypical

Thought it was worth sharing A.F. Bannerman's interesting view:

“Your savings, believe it or not, affect the way you stand, the way you walk, the tone of your voice — in short, your physical well being and self confidence. A man without savings is always running. He must take the first job offered. He sits nervously on life’s chairs because any small emergency throws him into the hands of others.

Without savings, a man is often fearful of the present and the future. Being in a constant state of fear is a horrible place in which to live. A man with savings can walk tall. He may appraise opportunities in a relaxed way, have time for judicious estimates and intelligent decisions. He need not be rushed by life’s problems or economic necessity.

A man with savings can afford to resign from his work, if his principles so dictate. A man who can afford to change his work is much more valuable. He can afford to give his company the benefit of his most candid judgments.

A man always concerned about the immediate necessities, such as food, rent, school, and medical needs, cannot afford to think in long-range career goals.

A man with savings can afford the wonderful privilege of being generous in family or other emergencies. Emergencies become opportunities for service; they help shape personality and develop character.

Schools do not teach thrift. Schools do not teach work habits. However, a man with savings can teach his children by example how to have a more successful and worry free life.

The ability to save has nothing to do with the size of man’s income. Many high-income people spend it all, and are forever on a treadmill, always working — never able to rest. Many years ago, the dean of American bankers, J.P. Morgan, advised a young broker: ‘Take waste out of your spending and you’ll drive the haste out of your life.’

If you don’t need money for college, a home, or retirement, then save for your self confidence and you can take a level stare from the eyes of any man, whether he be friend or stranger. Start paying yourself regularly, because the state of your savings does have a lot to do with how tall you stand and how relaxed you walk.”

fred246

I don't save at all - I just keep what I haven't spent. The question is why am I happy to drive around in my 13 year old super reliable car while someone else (say the man across the road from me) has to buy a new Range Rover every year.

Nationwide8

atypical wrote: »

Thought it was worth sharing A.F. Bannerman's interesting viiew A man with savings can afford to resign from his work if his principles so dictate. A man who can afford to change his work is much more valuable. He can afford to give his company the benefit of his most candid judgments.

This has turned into such an interesting thread

The above is exactly what I did at 55,but I had to have enough savings ( to back up a small occupational pension ) to be able to walk away from a fairly well paid secure job.I loathed it though the last four or so years and had to go into what I called COMPLETE "robot" mode for those years to survive ( and to save !! )

I'd always encourage people to save something/anything no matter how hard it seems to be at the time.Otherwise you end up a wage slave with no control over your future probably working until your mental or physical health suffers in a major way.
Not everyone can do what other people do though,people have different responsibilities and circumstances but for me the "future" was worth sacrificing some of the "now"

Money dosen't always buy happiness but it gives you more choices.

RG2015

Nationwide8 wrote: »

This has turned into such an interesting thread

You're welcome and this is precisely as I planned it.

It is not about the money but it really is all about the psychology.

JustAnotherSaver

bigadaj wrote: »

Is this care publicly or privately funded?

The simple answer to those criticising care is often that the care could be given by relatives instead, I wouldn't want to and wouldn't expect many to want to either but it's an option and one that may be logical if the relatives want to retain the estate.

Quite right .... and care WAS given by relatives for a good period of time too for the record.
CCTV was installed, with my nan being informed & consenting.

Without going into too much personal detail it just got to the stage where it could no longer go on that way.

I have another relative who's been cared for by other relatives for years. People are quick to judge when those doing the caring show signs of it getting to them - but then that's what people seem to be like, quick at judging. Like those i work with who are quick to judge someone who's signed off with depression. The one signed off had a stillborn son yet it didn't stop these people judging. "he surely doesn't need this length of time off". Why not? Have all these people all of a sudden experienced it? Depression is the classic one though. Everyone thinks they've been depressed so all of a sudden they become experts at it. I've even said myself that i feel depressed but when you look back you only felt down for a while, days, weeks, months. Not the depression that real ill people go through when you find them in a field in the middle of nowhere with a tube from their exhaust to their car inside (family friend - thankfully saved & now better). There's no point in judging these people. Most of us don't have to deal with what they do & besides, everyone handles it differently.

On the topic of paid for & non paid for care, i worked with a chap who's mother saved all her life. His aunt had no savings. Both ended up with dementia. Both went in to care, both at the same place cared for by the same people, just one had to pay for it out of their savings & the other one didn't as they had none. That's what he told me at least anyway. I've no reason to disbelieve him & assuming it was true i'd doubt his mother got better care than his aunt just because she had savings.

getmore4less

An example of one of our extra spends...

We are going to a party around 25miles/45mins away,
we go near to the area few time a year as it is one of the nearby places with a larger range of stores, bigger DIY places, restaurants etc.

We could easily drive, leave home in the dark and return on the cold Dec night.

in our working/saving days we would have probably driven but now we will have a mini 2 day 1 night break stay in a local close hotel(decent one £60B&B) drive both ways in daylight, enjoy the pool before getting changed to go out 5 min each way so could even taxi and if the days are nice we can do something or hit the stores we have not been to for a while.

justme111

JustAnotherSaver wrote: »

Quite right .... and care WAS given by relatives for a good period of time too for the record.
CCTV was installed, with my nan being informed & consenting.

Without going into too much personal detail it just got to the stage where it could no longer go on that way.

I have another relative who's been cared for by other relatives for years. People are quick to judge when those doing the caring show signs of it getting to them - but then that's what people seem to be like, quick at judging. Like those i work with who are quick to judge someone who's signed off with depression. The one signed off had a stillborn son yet it didn't stop these people judging. "he surely doesn't need this length of time off". Why not? Have all these people all of a sudden experienced it? Depression is the classic one though. Everyone thinks they've been depressed so all of a sudden they become experts at it. I've even said myself that i feel depressed but when you look back you only felt down for a while, days, weeks, months. Not the depression that real ill people go through when you find them in a field in the middle of nowhere with a tube from their exhaust to their car inside (family friend - thankfully saved & now better). There's no point in judging these people. Most of us don't have to deal with what they do & besides, everyone handles it differently.

On the topic of paid for & non paid for care, i worked with a chap who's mother saved all her life. His aunt had no savings. Both ended up with dementia. Both went in to care, both at the same place cared for by the same people, just one had to pay for it out of their savings & the other one didn't as they had none. That's what he told me at least anyway. I've no reason to disbelieve him & assuming it was true i'd doubt his mother got better care than his aunt just because she had savings.

I have not seen ANY judgement at all , not sure why you went into such a long rant about it. Someone just mentioned that relatives caring for one is an option.
Re paid/ unpaid care - yes sometimes it can be the same. Just sometimes. That is the key word. You may find it interesting to familiarise yourself with fascinating and bewildering ins and outs of care provision in this country

RG2015

People are living a lot longer than in the past and long term care can be very expensive. As a society we are not geared up for this change. Many of us save for security and we just do not know how the advancing years will treat us.

It is a sad indictment of a very wealthy country that a major motivation for saving is fear of not being able to afford to live out our years in comfort and with dignity.