Savings down debt up

Thrugelmir

teddysmum wrote: »

The amount of savings is dropping, because poor interest means your buying power drops over a number of years , making it unattractive and gone are the days where good interest increased the amount of money beyond the break even point of buying power.

That might be so. However having no savings leaves one exposed to the financial uncertainties of life, i.e. relationships, employment, health, unexpected bills. Buy now pay later has interest built into the cost of the product or service. Whether it be a flat screen TV, a car, or simply paying your car insurance over 12 months. Over the years the hidden interest paid mounts up.

Having an emergency back up reserve is common sense. Something that has been lost by many in recent years. Never has the advice gone away. Simply that people prefer to ignore it.

kinger101

norsefox wrote: »

A good amount of the CC increases have been put to the proliferation of Contactless payments.

By whom? Someone who isn't aware contactless technology is also available on debit cards?

Contactless technology is entirely neutral, in that before it existed, payments could still be made by credit or debit card.

BobQ

Malthusian wrote: »

If you have £50,000 in the bank why on earth would you take out a car loan? If you have £50,000 in the bank you probably don't take out car loans in the first place.

I am not saying they should take out a loan but some do. For example if you are offered a 0% loan or you want to ensure you have cash if you need it or you may not want the cash to lose its ISA status.

Cakeguts

The latest culture seems to be to spend every last penny that you earn and then borrow when you have done that and it all goes on things that lose money, so the latest gadget, the latest car, and several expensive holidays a year. A holiday away is a luxury. It isn't a necessity you won't die if you don't have one. The problem with all this spending and debt is it doesn't take into account of what you do if you suddenly lose your job. The number of people who can't pay the mortgage or the rent because they have lost their job is simply because they haven't saved any money to be able to do this if they aren't working. It is only when they have the rent to pay and there is no money in the bank that they see they have a problem.

The one that always amuses me is tenants wanting after renting for sometime to change the day that they pay the rent because the day that they get paid has changed. You can see from this that they don't have even one month's cash in savings. They are always one pay cheque away from being homeless and they don't seem to understand that they have a problem.

tara747

Cakeguts wrote: »

The latest culture seems to be to spend every last penny that you earn and then borrow when you have done that and it all goes on things that lose money, so the latest gadget, the latest car, and several expensive holidays a year. A holiday away is a luxury. It isn't a necessity you won't die if you don't have one. The problem with all this spending and debt is it doesn't take into account of what you do if you suddenly lose your job. The number of people who can't pay the mortgage or the rent because they have lost their job is simply because they haven't saved any money to be able to do this if they aren't working. It is only when they have the rent to pay and there is no money in the bank that they see they have a problem.

The one that always amuses me is tenants wanting after renting for sometime to change the day that they pay the rent because the day that they get paid has changed. You can see from this that they don't have even one month's cash in savings. They are always one pay cheque away from being homeless and they don't seem to understand that they have a problem.

Yes, this is absolutely shocking. A man I work with is exactly like this, despite being in his 40s with a good salary - and his wife works too :eek: I would hate to be so financially vulnerable.

enthusiasticsaver

Paying for day to day living expenses on credit is not always bad. We use a cashback card for supermarket and fuel spends over the month and repay in full each month. Makes it easier to keep track of it as we only use the card for that purpose, keeps the money in our current account longer earning (slightly pitiful) interest and we benefit from the cashback on the spends.

I would imagine many people do not save because of the low interest rates around now. Do they measure investment rates though as we have a certain level of cash savings but our liquid assets are mostly invested now? Cash savings are for holidays, new cars, home improvements and gifts.

corf999

Malthusian wrote: »

If you have £50,000 in the bank why on earth would you take out a car loan? If you have £50,000 in the bank you probably don't take out car loans in the first place.

My mate bought a car on PCP (now totally paid off) - He was originally planning to buy with cash but the cash discount was minimal while the PCP discount was significant. He paid less for the car via PCP than buying in car upfront.

I understand this is common due to dealers trying to get people stuck in the PCP upgrade cycle.