For people that have escaped the paycheck-to-paycheck cycle, how much has it impacted your life?

blue.peter

MovingForwards said:

Thank you @blue.peter I went into the detail I did as learning to save, goes hand in hand with budgeting.

Yes, though saving was almost a by-product of budgeting in my case. I'd get paid, look at my committed spending over the coming month, add £x to cover ad hoc expenses, see that there would be £y over and move that £y into a savings account. It was only when I saw a reference to budgeting to zero on this forum and looked it up that I realised that it's a name for what I've been doing for 30+ years!

MovingForwards

@blue.peter never realised it had a name, that's how I've been doing it since I started over. 

captainlongtoes

MovingForwards said:

Thank you @blue.peter I went into the detail I did as learning to save, goes hand in hand with budgeting.
I'm living proof that there is life after a 21 year relationship / marriage. After being in debt owning a home and getting credit can be achieved. Being female doesn't mean I can't put up shelves, change sparkplugs, use power tools and be independent; things just take a lot longer now due to my health.

If just one bit of how I do things is useful to someone, then everything I have been through isn't wasted, giving people hope is free and empowers those reading it.

Hope has certainly been given to me, thanks again  

IAMIAM

I think the best thing ever is having no debts apart from a mortgage. No car finance. No sofa credit. No mobile phone contracts (sim only) etc. Without a doubt, not paying for things monthly and actually paying things off fully (council tax, car insurance, etc etc). This ensures I never have to rely on things monthly and also I only have one big commitment (mortgage payment). This helped a lot. 0% card then I recycle every two years for emergencies. Stress ZERO.

strawb_shortcake

I have broke free of the cycle, but I find I get more stressed spending money even though I don't have to worry about it. I check by balance and keep track of my budget 3/4 times a week.
Since I've been working from home my savings have increased massively and I think will struggle to fall back into previous spending habits despite them not being particularly extravagant. 
I always let my current account build up a nice cushion, this month I didn't break into July's pay until the 20th I think. 
I get my pay rise and bonus next Friday which will take my current account to a very nice healthy amount. I'll be able to buy the school uniforms, pay my annual car insurance, bills, groceries and a few days out before touching my salary. The uniforms and insurance would have typically come out of a savings account specifically for this type of spend. 
End of August I plan to top up my savings with anything in my current account probably above £3k and start again.
My biggest problem is working out what do with my savings, I have pots not earmarked for anything so deciding what to do with is harder.
I also need to move away from saving to investing.

blue.peter

annabanana82 said:

My biggest problem is working out what do with my savings, I have pots not earmarked for anything so deciding what to do with is harder.

You don't have to decide what to do with it now. It's a cushion on which you can land softly if you ever need to. It's there if you want to buy something large, or if you have no choice but to do so (something like, say, replacing the boiler), or if you hit a hard time (work drying up if you're self-employed or redundancy if you're employed). Just knowing that the savings are there is a comfort in itself.

(I have largeish savings and investment funds. Nothing's specifically earmarked, but it's there ready if I need it. For example, a family member needed a bit of help early last year, and it was good to be able to offer them an interest-free loan to help out.)

blue.peter

@annabanana82 I've been thinking a bit more about your unallocated savings. Do you have a mortgage? If so, have you thought about switching to an offset mortgage? I did that about 20 years ago, and found it one of the best financial decisions I ever made. (It's long since been paid off, which is part of why I found it so good.) Of course, that doesn't necessarily mean that it would work for you. But it's something that I'd suggest considering. You'd still have your savings available if you need them, but while you don't they're reducing the interest that you pay on the mortgage.

MovingForwards

@cantstopspending13 have a read of this thread for ideas.

Lumiona

We've  done this,  despite very average income. It's so reassuring knowing all bills are paid and we have a chunk of savings. I also track spending and reconcile our accounts every few days to check against our budget. Our DDs are paid a day after wages are received, and all the money left goes straight in savings. Its nice and straightforward.

strawb_shortcake

blue.peter said:

@annabanana82 I've been thinking a bit more about your unallocated savings. Do you have a mortgage? If so, have you thought about switching to an offset mortgage? I did that about 20 years ago, and found it one of the best financial decisions I ever made. (It's long since been paid off, which is part of why I found it so good.) Of course, that doesn't necessarily mean that it would work for you. But it's something that I'd suggest considering. You'd still have your savings available if you need them, but while you don't they're reducing the interest that you pay on the mortgage.

Thank you. We do have a mortgage,  at the moment our savings roughly match the outstanding mortgage. We have just over 2 years left on our current deal so an offset mortgage is really worth looking into. 
I tried looking at an offset calculator but couldn't make head nor tale of it. A man a work said their mortgage is offset, and they typically pay 4p interest a month. 
We have overpaid two lots of 10% and in 4 and a bit years gone from 32 to 15 years.
My aim is to get the mortgage paid off within 12 years.