Why do people save?

Eco_Miser

Alexland wrote: »

It's a surreal feeling having already contributed nearly enough for the future but still needing income to afford the present. I can almost afford to retire just not live for the next 20+ years of grinding work.

Perhaps you need to be saving more in an ISA, to eventually provide an income to live off, instead of all those years of grinding work?
You can draw on your pension from age 55 (unless that's gone up by then) and LISA from age 60. In your position I'd be planning to retire by 50, not to start saving into an ISA then.

BLB53

I have always been a saver 'cos you never know what's around the corner. This quote from the Diy Investor site sums it up for me...

“You don’t need a reason to save. Are you saving for a house? Or a vacation? Or a new car? No, I’m saving for a world where curveballs are the most common balls thrown. Only saving for a specific goal makes sense in a predictable world. But ours isn’t. Savings is a hedge against life’s inevitable ability to surprise the hell out of you at the worst possible moment.” (Morgan Housel)

chockydavid1983

I've never been a big spender and from a very young age, I saved without a particular goal in mind.
I bought my first house just over 3 years ago and was able to do that partly due to money built up from years of saving.
As my income has increased over the last 10 years, my spending has not increased at anywhere near the same rate so I'm able to save and invest a fair amount.
I'm not 100% sure of what the end game is but it will give me flexibility to maybe reduce my working hours, retire early, build my own home etc.
For me, once you get to a certain level of income where you can comfortably afford life's basics, anything above that merely brings flexibility and comfort of a safety net.

Mnd

I wes brought up 1 of 8 in a council estate, mum and dad had to scrimp to get by, but by far the best financial rules they instilled in us was save and don't buy what you can't afford.they were never going to be in a position to help us financially,
When we started earning it was strictly that our take home pay was split 3 ways, housekeeping, saving, own money..the savings bit may as well been In fort knox for all the access we had to it! Until we wanted to buy a house etc and then the fruits of their rules matured.
Fast forward nearly 50 years and from this modest start we are comfortable, I'm retired (wife still working..child bride!) No mortgage no debts lovely house and our number sorted.
I will always be grateful to my parents for the financial disciplines they installed in us

OldMusicGuy

Mnd wrote: »

I will always be grateful to my parents for the financial disciplines they installed in us

I think upbringing is a significant factor. My parents were never in debt, had a comfortable but not excessive lifestyle but were not savers. I think that's because they both came through WWII so my mum had a "make do and mend" attitude and my dad worked hard to get qualified after the war (he may have gone to university or college but instead served in the Navy). He always had a reasonably paid job and his mindset was work hard to get a secure job with a final salary pension scheme at the end of it, and pay off the mortgage as soon as possible. Because he had a secure civil service job with a great pension at the end of it, he never had to worry much about long term financial planning or saving. As long as incomings exceeded outgoings, he was happy.

So I entered the workforce with the same mindset. I was never in major debt but didn't really think about saving . Final salary pension schemes were widely available in the late 70s. However, when I moved into the world of IT in the 80s, these were rare and so I had to think more about saving. It was tough at the time because I had mortgage and a family.

Fortunately in the last 5 years I have been able to save aggressively into a DC pension and take advantage of tax reliefs that may be going away soon. But I wish I started saving when I entered the workforce, and that I had put more into the pension earlier rather than pay off the mortgage. I realise that my dad was an example of how to live that didn't apply to my circumstances, and it's taken me a long time to recognise that. That's a message I have passed on to my son, who has just started work and already has some savings in an investment trust and is making healthy pension contributions. He won't be doing silly things like taking out car loans and changing his car every three years like my dad did, and of course which I did early on in life (I don't do that now!).

I think it's really important that parents try to educate and encourage kids about saving. But then as the OP pointed out, people's personality can override good teaching. Someone who is a risk taker is much less likely to worry about long term outcomes and save now for the future.

Ed_Zep

I keep some as a rainy day fund but the rest I invest in Vanguard Life Strategy 100 and some individual shares.

I'm thinking about crytocurrencies but wondering if it's too late. It's mind-boggling how much BTC has gone up.