Money sense?

Zero_Sum

Fatbritabroad wrote: »

@kev 2009 you seem to need the lightbulb moment i had about 6 years ago (and I work in financial services so no shame in it).

So you pay into a pension but are nervous about paying into a s and s isa in case a crash makes you lose your money..... But you're paying into a pension. Where do you think this money is going?
You could replicate what's in pension in your isa and it would be the same thing. The isa /pension is a wrapper. Where the money is invested can be exactly the same if you wish

If its a DB pension then the markets dont really matter to you, the employer bears the risk.

Fatbritabroad

jonnygee2 wrote: »

The big difference is when you might need to withdraw. A pension is untouchable to 55 - over 15 years or so there's very little risk of an overall drop.

But putting money into an investment account that you might need in < 5 years time is a much larger risk, one you probably shouldn't take.

As Kev2009 thinks he might need his savings in the short term, I think keeping them in a savings account instead of investing them is the right move.w

Yes I hadn't noticed he needed below 5 years I'd obviously agree with that it was more the psychology of not paying into s and s isas and paying into pensions. An awful lot of people I find (, myself included even though I knew what a pension was and what an isa was )haven't quite made the link between the two

fred990

Post office saver at 10 years old. Carried on then into the stock market, pension, property.
Forty five years later it's all very good. Time now for the expensive cars etc having gone without before.

Zorillo

To be perfectly honest, I didn't have a good "twenties" money-wise, and so I've made sure my "thirties" have been a hell of a lot better.

I just look back and feel grateful that I caught on about maximising employer contributions at the earliest opportunity I had, which means my pension fund now sits at an ok level for my age.

I wish we'd bought a house much earlier than we did. All that rent money wasted

Zero_Sum

Katiehound wrote: »

I have a sneaking feeling that being frugal or spendthrift comes from childhood experiences.
If you never had money as a child and every penny (almost literally!) counted then you retain that viewpoint into adulthood. Certainly friends who had a well cushioned childhood (in financial terms) have been more inclined to be spenders rather than savers after the major purchase of a house has been addressed.

One of my friends finds that I'm not really great fun to take on a shopping trip! I like charity shops and car boot sales which she hates. When in a store she picks up items to admire, and possibly purchase, I comment "But do you need it??" and she puts it back!! No fun for her, but she saves the dosh.....

In my experience its the complete opposite. People who havent had much tend to favour instant gratifucation over deferred gratification.

Vet

Im in my 20s now, started reading MSE a few years ago - since then I've became much more aware of importance of saving. Started using ISA's etc, LISAs. I'd say i'm in a great position for my age.
It's great to be able to read about other people's experiences and apply their knowledge to my own life!

webjaved

jamei305 wrote: »

Sensible from age 5 to 16, reckless from 17 to 23, sensible from 24 onwards.

That sounds like me!

System

I have always been a very keen saver / cautious spender. I am sure I detailed my savings habits elsewhere on here recently. My grandpa started an account for me when I was little, and would take me to the Bridgewater Building Society (now Nationwide) to pay money in and I loved looking at my passbook and my growing balance, and used to consider hard whether I needed to take any money out (my parents gave me pocket money which was in a money box at home, so I usually had cash). We aren't talking regular pocket money here, but rewards for tasks followed, at the age of about 10 with 10p per week (in the Seventies). That clearly stuck with me as I still struggle to justify any payment for anything which does not fall into the category of "necessary" ie household bills and replacement of worn out things.

I have tried to do the same with my son, but he seems to have inherited a slightly profligate gene from my husband. He is 13 now (son, not husband!) and I am hoping that he'll sort himself out soon. He has a Nationwide FlexOne account with a debit card and gets a variable amount of pocket money paid direct each month (variable in that he gets a guaranteed £15 per month and can earn up to £10 a month just by being a useful member of the household !!!!!). I am hoping that if he is going to make any mistakes, he makes them now rather than when he has left home. Every time his bank statement arrives, I go through it with him and ask such questions as "was that absolutely necessary?", "has your life improved with that £2.50 milkshake when you could have had one for nothing at home", and comments like "I don't care how much money so-and-so spent, it's not a competition to see who can blow most money in town". Having said that, he did actually describe someone in his class at school as having "more money than sense", so hopefully it's sinking in and I have spawned a clone of myself after all!!!!

Roll on next year when he starts having finance lessons at school. Meanwhile, Nationwide have some good educational resources (which may be designed for youngsters, but make good reading anyway).

I do sometimes fear that I am the only wise person in our house when it comes to finances. I think that you either already have the kind of mentality with money that's "easy come easy go" or the "thank God for Excel ….. to think I used to do all this by hand without a calculator" mentality. I agree that childhood experiences probably make up some of the attitude to money.

maxie014

LHW99 wrote: »

One thing I did that started me off was to put a really small amount (I think the minimum in those days was £20 per month, but its probably nearer £50 now) into a unit trust / OIEC. It wasn't that much, so it didn't really matter what happened to it. It got me used to the idea that the value went up and down, and so when it went down I got more units that month, which then help when it went up again. Pound cost averaging! almost as much fun as compound interest!

I did that at the same time i began my mortgage £50 a month,with the plan to pay the mortgage off early with the funds value.
But due to having an endowment mortgage it didnt go to plan,only 2 years early,i cashed it in and along with an endowment refund and paid it off.

vacheron

When I look back on it, my parents (intentionally or unintentionally) had a good system set up for me.

For as long as I can remember I had 3 types of savings. Now in adulthood the system is similar

• A savings account which had a relatively (for a kid) large amount of money in it, which I was unable to touch because it was earmarked for "the future". Now represented by my liquid investments, (shares, pensions, mortgage payments etc.)
  
  
• A savings jar which i kept some of my weekly pocket money in and saved up for to buy big "luxuries" like toys etc. Now my savings accounts for getting things like cars, holidays and expensive consumer items.
  
  
• The remainder of my unsaved pocket money I left on my bedside table for use buying cheap daily stuff such as sweets etc. Anything left over at the end of the week went into the jam jar. Now my everyday stuff such as meals out, beer, and daily spending, and anything unspent gets moved into savings.

maxie014 wrote: »

From leaving school or further education say.Saved,invested,looked after their money instead of blasting it as a lot of people seem to do,ie flash cars,clothes,gambling,boozing etc

A lot of people make the assumption that these are exclusive. If you save and budget well it is perfectly possible to do both.