Can saving too much become an 'unhealthy obsession'

Phaelok

Hi everyone,

I would be interested in hearing your thoughts on the following...

I have no financial commitments and still live at home with the aim of having my own place one day. I currently have just over £87k in savings and save around £1800-£2000 per month. I earn just over £2600 per month and pay rent to my parents. With fuel (approx £80) per month and a few minor things, I very seldom spend money on going out/on myself as I feel guilty. I don't feel happier as a result either.

I feel that money could be put to better use.

At what point can saving too much become an obsession?

Thanks for any advice.

Neil_Jones

You're very fortunate to be able to save £2k a month, most people are lucky to have anywhere near 10% of that.

You may find that once you get a place of your own you'll be doing well to be able to save that amount of money, when you factor in things that break, new items, depreciation, maintenance...

colsten

If you feel happier when spending some more money on yourself the answer is simple: spend some more more money on yourself.

That aside, whilst £87K might sound a large sum, it isn't actually that much. By the time you have budgeted for furniture, soft furnishings, white goods, insurances, stamp duty, solicitor's fees etc etc, you'll be lucky to have enough left for a deposit.

Declan1992

With 87k savings you could easily put a 50k deposit down while still saving a 10-15k emergency fund and the rest for everything that comes with a house purchase.

Depends on the cost of housing etc in the area you would like to live.

180k in my neck of the woods would get you a decent 3 bed with a drive and garden and fairly modern house.

enthusiasticsaver

What are your financial aims?

£87k would provide a healthy deposit in most areas of the country so what is stopping you buying now? I don't agree that paying out for insurances, fees and stamp duty, furnishing will not leave you enough for a deposit. Most start out with much less.

Do you feel that you are reluctant to spend and that is what is holding you back? If so I would say you have a problem and the savings habit may have become an unhealthy obsession.

How old are you?

Sea_Shell

Saving, like spending, is on a spectrum.

If you squirrel away every last bean, and never do anything or go anywhere, because you feel you HAVE to save, then that's not very healthy.

However, at the other end of the scale, some people cant stop spending and end up in £87k worth of debt...I know which end of the scale i'd rather be towards!!

Are there some things (other than buying a house) that you really want to do? Travel, Bungee Jump, take a flying lesson, go to festivals etc etc etc.

If so, give yourself a break from the saving and spend some of that hard earned cash...even if it's just one months worth. You could 'blow' that £2000 and not really be any worse off.

At the end of the day, only YOU know what makes YOU happy....so do what makes you the happiest!!

george4064

Something you could do is to have separate savings pots, so in addition to your main pot you could setup a new pot on the side which could be your holiday fund.

Each month save however much you want in that pot, and once a year you use that money to go on holiday. Since you have specifically saved that money for holidays it should make it easier for you to actually spend that money on a holiday you’ll enjoy.

It’s incredibly simple but I can assure you it will put you in the right mindset to enjoy spending this money on going away somewhere.

ivormonee

Many people seem to believe that property ownership at some point in their lives is essential; they dismiss renting indefinitely as viable. The result is that owning a property becomes obsessional - if one doesn't own a property by a certain stage in their lives then things can't be right.

If we take property out of the equation then the whole financial position changes. Those savings, that some posters are saying can be earmarked for a deposit on a property purchase, could then be used in other ways; ways that could enhance one's life more than, or in a different way to, owning a property.


I'm not suggesting there is a right or wrong; merely putting forward an alternative dimension.

ironhead

I hate to tell you this, but at midnight tonight you will be visited by three spirits.....

:rotfl:

Bravepants

Phaelok...this might give you something to think about when you are considering adding more to your investments...


https://theescapeartist.me/2019/11/09/how-to-build-a-compounding-machine/


I suspect you are in your 20s, and if so you may already have enough cash such that if it is invested in a suitable globally diversified index fund (in an ISA) you could leave it well enough alone until you retire and get on with other things that are equally or even more important!

colsten

ivormonee wrote: »

Many people seem to believe that property ownership at some point in their lives is essential; they dismiss renting indefinitely as viable. The result is that owning a property becomes obsessional - if one doesn't own a property by a certain stage in their lives then things can't be right.

If we take property out of the equation then the whole financial position changes. Those savings, that some posters are saying can be earmarked for a deposit on a property purchase, could then be used in other ways; ways that could enhance one's life more than, or in a different way to, owning a property.


I'm not suggesting there is a right or wrong; merely putting forward an alternative dimension.

So instead of saving for a property, you'd save to have enough money to pay your rent in your old age.