Keep calm and carry on....

Cheery_Daff

Gosh, lots of lovely pondering here! I do love seeing other people's thought processes laid out. Do you know, I don't think I've ever worked out our savings rate! What do you include? I assume not saving for predictable annual bills? But what about stuff like car replacement or holidays? 

Good work on figuring out the car payment. I'd be quite daunted at working out percentages. I reckon at least 25% would go on cafes and another 25% on chickens 😂😂

South_coast

But there's so much more joy to be had from cafes and chickens than car replacement 🤣! I class "savings" as whatever I'm saving for at the time, so at the moment it's car replacement/car insurance, then it'll be holidays, gifts and the LISA for next year, then (finally) it'll be the refurb and then one day I might eventually get onto The Future 🙄 I used to save little bits towards each target every month, but I switched it up so I'm attacking one at a time instead but churning through them more quickly. I don't count the pension, as that's deducted before I see it. So at the moment, it's nothing I count towards long term savings, but when I'm saving for the LISA/refurb/The Future they do count towards my "money needed" figure as those are all included in that total. Clear as mud 🤣?

Cheery_Daff

Makes sense! I always felt I'd have a much better figure if I counted the pension, but couldn't be bothered to work any of it out, and as you say, it goes before you see it anyway.

Hmm, will have a think. I put aside for annual stuff like car insurance etc through YNAB every month so may be a bit of a faff to count up all the different categories- I guess that's why I never bothered before! 😂

South_coast

First of the month round-up....

Movement during July 2021: +£562.68
Money needed as at 1 August 2021: £276,767.26

Not as good as last month, where I was +£1643.91, but I can't expect months like that every time when there's only pension contributions going in at the moment. Pension 1 = up a smidge. Pension 2 = up a smidge. Pension 3 & 4 (combined during July) = up by what was paid into it 🤦‍♀️🤣!

glass_half_full

South_coast said:

Thanks BB 😀!

I've been pondering a bit more on my 60-ish% savings rate and have worked out that my bills are almost exactly 25% of my income (the curse of solo living - no economies of scale! Plus, er, my car....) and my living expenses (petrol/groceries/personal) are almost exactly 15%. I like the idea that 3 days per week I am working for savings (and only 2 days per week are to cover my costs)! I may remind myself I am working for savings when things go wrong at work 😀 (nothing terrible at the moment, just keep getting rugs pulled out from under our carefully-laid plans and having to do a re-think)

Hi South_coast,

Interesting analysis as ever. Out of curiosity I have had a look at my post mortgage free budget and my savings rate will be around 60% but this is for a household of 2. Although for me the bills are around 15% and the living expenses are 25%. I guess the bills are lower as a % since they are effectively split across the two of us. The living expenses are a bit higher than they need to be since they include some items from when I relaxed the spending post debt freedom. Do you think a 75% savings rate is possible (or desirable)? I wonder whether some of the FIRE people achieving that have special circumstances eg higher than average income, don't run a car, super frugal approach etc.

South_coast

Thanks GHF 😀 

75% would be lovely (and only for 5 years hopefully), the trouble is 75% + 25% doesn't leave any room for food (or petrol)! I do wonder sometimes as well, I have a feeling some of their sacrifices may be a little further than I am prepared to go!

South_coast

BF actually said just now that he admired me for having paid off my mortgage. That's the first time ever 😀😀😀!

QueenJess

South_coast said:

* I need to be a bit more gentle on myself. I saved 59.6% of my June salary and 59.5% of my July salary (which is epic by any standard - and makes me feel even more guilty about only donating 1% to charity 🙁**), but instead of celebrating that, all I can think of is that the amount I want to be saving each month for the first 5 years after the refurb is equivalent to 75% of my current salary - which is completely unachievable and so way out I just need to tell myself it's not possible and stop even thinking about it. Except I can't 🤦‍♀️🙄!

** The intention is to give generously with my time once I am early-retired, but that is a very long time away and I still feel bad about not doing more now, when I can clearly afford to do so 🙁

I have a similar quandary.  I am trying to save to get to the life I want, but realise I am way better off than loads of people.  I give to charity and have set it at a certain amount, but hope to slowly increase that every year.  Might just take my salary increase to charity and then I won't notice.

Not to torture yourself, but this website is quite interesting/scary.  If you scroll to the bottom it calculates how rich you are compared to the rest of the world.

newgirly

Wow that website is an eye opener QueenJess, it something I don’t really usually think about! 

South_coast

Yes, definitely - very humbling too 😳