Advice at 30

Thrugelmir

30andcounting wrote: »

General rule of thumb I can gather from peoples posts is put as much in as you can afford whilst still having what can resemble a life.

Manage your overall finances well would be my suggestion. Easy to dribble money away on work lunches, takeaway coffees, a car to keep up with the Joneses, pay your insurance premiums upfront not in installments etc. Never buy any large ticket item on credit, always cash. Then drive for a discount. Control your outgoings and "savings" look after themselves.

While ploughing as much into your pension pot is admirable. Remember the money isn't accessible until you retire. Life has a habit of biting you on the backside when you are least expecting it. Financial shocks come in a variety of forms. Spreading your money around provides a degree of insurance and covers you against any eventuality.

Owen1991

I'm 28 and earn £22k (take home £1450ish). I am not a homeowner, but have £19k in a LISA to go towards a house when needed (contribute £4k a year). I have a longterm girlfriend who is a homeowner, but doesn't want me to help out until we move and buy together as I'm away at work during the week.

I contributing £200 a month to my SIPP (currently at £7k) and later this year I'm getting a £300 a month pay rise and plan to up my contributions to £400.

I'm in the military so should have a half decent DB pension but I don't want to rely on that, especially if I leave service earlier than I expect.

My circumstances are very different to yours, but that's where I'm at.

snowqueen555

You say you can stretch an extra 1% increase in contributions, implying like money is tight? I would imagine there is a lot of wiggle room for you to put more in, it depends on what you are comfortable with.

I'm on a much lower salary than you but contribute more, so my initial reaction is that if I was on 57k I would be able to save 70% of my pay packet. But everyone's situation is different. I would like to think the more you earn the more you are able to save.

Without knowing where you spend your monthly paycheck, it is hard for us to offer a view.

30andcounting

snowqueen555 wrote: »

You say you can stretch an extra 1% increase in contributions, implying like money is tight? I would imagine there is a lot of wiggle room for you to put more in, it depends on what you are comfortable with.

I'm on a much lower salary than you but contribute more, so my initial reaction is that if I was on 57k I would be able to save 70% of my pay packet. But everyone's situation is different. I would like to think the more you earn the more you are able to save.

Without knowing where you spend your monthly paycheck, it is hard for us to offer a view.

I do have spare cash but like to pay a bit off my mortgage, have some money aside incase we need something. I fear if I put more into my pension its tied up until 55 at least. I also try to balance by enjoying life rather than wondering whether I should have a small luxury now and again or not. You could get run over by a bus tomorrow as they say, so not putting all my eggs in one basket, but trying to do enough

PuzzledDave

Maybe this is a good point to focus on this part:

"whilst still having what can resemble a life."

Look at where you spend your money - I do mean ALL of your spending. Each time you make a payment on a Twix or a holiday - you have added to the time you will have to spend in the office. Look at the things you buy - is that really worth the x minutes/hours/weeks at work you have to do to pay for it ?

You Only Live Once.... how much of it do you to spend want pleasing your boss/customers ?

crv1963

PuzzledDave wrote: »

Maybe this is a good point to focus on this part:

"whilst still having what can resemble a life."

Look at where you spend your money - I do mean ALL of your spending. Each time you make a payment on a Twix or a holiday - you have added to the time you will have to spend in the office. Look at the things you buy - is that really worth the x minutes/hours/weeks at work you have to do to pay for it ?

You Only Live Once.... how much of it do you to spend want pleasing your boss/customers ?

That's what I did!

£40pw or 2k pa on Costa Coffee for 8 years= £16k which could have gone into savings. Now I take lunch daily = £3 per day saving or £39 pm= around 500pa, total annual saving £2500, now going into Mrs CRV SIPP.

I do overtime for specific items- never counted as part of monthly take home wage as amount available and able to do varies. Buy presents when they are reduced in sales or special offers, discussed with family capping spending on each other for Christmas/ Birthdays- saves wasteful spending on unwanted gifts.

Anonymous101

PuzzledDave wrote: »

Maybe this is a good point to focus on this part:

"whilst still having what can resemble a life."

Look at where you spend your money - I do mean ALL of your spending. Each time you make a payment on a Twix or a holiday - you have added to the time you will have to spend in the office. Look at the things you buy - is that really worth the x minutes/hours/weeks at work you have to do to pay for it ?

You Only Live Once.... how much of it do you to spend want pleasing your boss/customers ?

I've tracked every pound I've spent one way or another since I first was poor student 20 years ago. I found when I only had £7 and a few tins of beans to last 2 weeks it really helped me to prioritise!

I've since had spells where i've taken my eye off the ball and others where i've been in similar tight periods, like when I bought my first house. But more recently I've put those skills to good use in really thinking hard about whether spending on a coffee or buying another fraction of an investment fund was the better decision. That's different for everyone and can change over time but knowing where you're spending and the implications of that are hugely important.

Sea_Shell

Even £3 per day for packed lunch seems dear to me!

crv1963

Sea_Shell wrote: »

Even £3 per day for packed lunch seems dear to me!

That is what I save per day by not buying my lunch at the supermarket. Tonight I'll have meatballs and pasta saved from Wednesday dinner leftovers, tomorrow night Chilli from yesterdays leftovers etc. Always cook an extra portion to use for my lunches.

30andcounting

I guess all the above is about opinions, what if you like your job? You could retire at 50 and miss the buzz of working? I've always been driven and enjoy working, the original point of this thread was to make sure I have enough money to retire when I want to, not necessarily being tight for the next 30 years, then sit in the sun all wrinkly with a pina colada because I can finally afford it. I just don't see that as quality of life.

That is all opinions of course. I agrees having a daily costa is excessive, but buying your lunch once or twice a week isn't, if it means spending a bit of extra precious time with your baby at the end of a working day (for example) It's about balance, not fannying around making sandwiches, I think there are some extreme views here.

It must be quite stressful counting every penny, then you could drop dead at 54 a year before you access the massive pension? You get my drift