How on earth do you save?!

sacha28

For those who tend to search posters, I have a bit of a chequered financial history. This was mainly through poor decisions and mindset following financial abuse in a previous relationship, I have found it so hard to get out of the mindset that I have to spend so it doesn't get taken away. It also made me very irresponsible. I own my mistakes, I've weathered the storm and have come out the other side.

Now I've hit 40, I've started to see things in a different light and realise that I really need to get in a better position before I hit retirement. I am in private rented accommodation but, for the first time ever in my life, I can see the benefit of buying a property.

Having spoken to a mortgage advisor today i can see this is unobtainable, at least for the next 4 years until bankruptcy falls off my file. There is no way that i will be able to save a 20% deposit BUT it does give me 4 years to save something, in preparation for the possibility it could happen. Shared ownership is also not an option, again due to the bankruptcy. 

That's the background, now here is my question...how do I get my head into the saving game?? My husband and I earn ok (£65k a year basic, combined) and I can work agency to boost saving potential, but when I get paid I just can't stop wanting to buy things. How do you stop yourself?  I feel really stupid even asking, I'm sure I will be heavily judged, but I need to hear people's strategies, especially if you've been in the same position and managed to turn it around.

Exodi

A combination of forming new habits and willpower.

When I first started saving, I set up a standing order of several hundred pound that got taken out the first of the month and put in a savings account.

In reality, the money was still accessable, and I could have moved it back if I ever needed to-

But seeing a smaller number in my current account conditioned me to stop looking for things to spend it on. Fun little mind trick.

Also like I've found with losing weight, once you start to make a bit of progress, this progress then motivates you to make further progress and it snowballs (and some people even go to far and can't bring themselves to spend any money).

But little by little you'll get there. To start with, I'd set up a standing order of a few hundred pound, and commit to not touching that. As you get used to living with your new budget, you could increase the standing order.

Obviously, this is assuming you're budget allows. If you feel you don't have much disposable income to begin with, feel free to post a statement of affairs and we can help you check where savings can be made.

Good luck.

Exodi

sacha28 said:

when I get paid I just can't stop wanting to buy things. How do you stop yourself?  I feel really stupid even asking, I'm sure I will be heavily judged, but I need to hear people's strategies, especially if you've been in the same position and managed to turn it around.

You've made the first step, no-one on this subforum will judge you for this - many have been in the exact same scenario and admitting you need a little bit of help and working to address the problem is one of the strongest and bravest things we can do.

About 10 years ago I was in a payday loan spiral with no clear way out, now I have my own house with about £70k of equity and over £10k in savings - it's amazing what you can achieve if you put your mind to it.

sacha28

Thank you both for your words of encouragement. 

I have opened a basic account with barclays that my husband and I will be setting up a standing order from our respective accounts for £100 a month, starting at the end of the month. Although this is only a tiny amount, it's only until the new year (want to get Christmas out of the way first before the big savings begin). I've been musing if I should put away half the agency into it, rather than all? That way I don't feel I'm working for nothing? Or is that a stupid idea? I could do 3 agency shifts a month which would mean £450ish a month doing it this way (but some months may be less, so I don't die, some months could be more if my permanent job shifts allow).

EssexHebridean

Nope - no judgement over here!

The best way of saving IMO is to make your savings as much part of your budget as the money you spend on your rent, food, energy bills etc.  Paying into savings that are at least to an extent locked away or "committed" can be useful as well as often we see those as untouchable. If you have a target date by which you want a lump sum saved then that means you CAN lock away without issues too, although right now I'd urge caution on going for too long a locked-in period due to the rising interest rates*. 

I would personally start by budgeting a generous amount for specific personal spending money - not a silly sum, and not money to be blown on nonsense - the "money mantras" of "Do I need it, can I afford it, do I have something else that will do the job" still very much apply, but if you've noticed one day that your winter boots are starting to look a bit tired, and then you see a decent pair in the sale the following weekend at a good price, you try them on and they are comfortable, money that means that you can think things through and then decide that yes, they are a sensible buy, for example. Within that spending money I would allocate sums to various areas too - I set aside a sum each month against birthday and Christmas presents (we budget jointly for the ones that are a shared cost, but I have friends to buy for, and of course MrEH too), against clothing, against general fun and also against saving for a specific hobby that costs me money through the summer months in particular. the key thing is that all those "pots" get money transferred to them at the start of the month - and what's left after that is "mine" to spend. 

One thing you might well find is that as you do start to build an amount in savings you'll find that in itself is an incentive to continue - there's a quiet satisfaction in looking at a savings account and seeing the monthly interest amount creeping up month by month as you add to the capital, for a start! making sure that you have some personal savings as well as the joint ones can also act as a nice little boost of positivity as well. 

* To give you an idea on this one - we've just opened a new savings account which has a fixed rate for a year - there were two other options available to us with progressively higher rates, 18 months and 2 years I think it was - but quite frankly I could see the easy-access rates overtaking any of them ion that timescale. A year felt like a decent enough compromise for our purposes. 

enthusiasticsaver

There are all sorts of ways to start a savings habit. I have always had the mentality of putting some of my income away into a savings account (my user name is no coincidence) as it is something my Dad got me involved in when young.  Money in a piggy bank then a building society book and I did this with my own children and now grandchildren.  It needs to be affordable and within budget.  It is very demotivating to save then end up drawing it all out by the end of the month because you have set savings targets too high.  However little it is each month it is a start and as you see the savings balance grow it will motivate you more especially if you have a target like buying your own home. I now have two savings pots, one emergency fund which is not touched unless an emergency and one for unusual or one off costs like insurance, car services or holiday etc.  Some have more pots.

 If you are earning extra in agency work I would put that aside as it is money not already allocated in your budget.  It won't mean you are working for nothing as you will see it build up in your savings so you could say that it is going towards hopefully your house one day. The £100 each month is a good idea to get you started and you can see how quickly it builds up and how nice it is to have a savings buffer. 

I find it harder now that our mortgage is paid off and we are early retired (both long standing aims previously) so in a way not having a target acts as a bit of a brake on saving for me. I now set smaller targets like £2k for Xmas or £6k towards a new car or holiday.  It helps to motivate me. 

Alongside getting in the saving habit you do need to look at spending habits.  Do you spend because you need to or because you want to?  Spending on rent, utilities, food and transport to work costs are necessities.  Takeaways, coffees out, alcohol, holidays etc are luxuries with other things falling between essentials, nice to have or luxuries.  Before you spend think about why you want this particular item and whether it is really needed. I agree with EH that having some personal spends built into your budget too is essential, so you have some available money to spend if you need or wish to.  

Kakiste

I use pots for things I know will be regular monthly expenses, I also set myself a small amount of personal money to spend on whatever I want each month- once that money has gone, it's gone and no more personal spending until the next month- if I reach the end of the month with any left then it rolls over. 

I also transfer a set amount of savings out every month into a completely different account- that way it's not sitting there looking at me whenever I open my banking app. 

Pixie_Cosmo

Hi, I have several accounts I use for saving, e.g. car maintenance, holidays, house maintenance, Christmas/birthdays. I work out what I need to save per year to cover things like insurance. I divide by 12 and each month on payday, I have standing orders set up to pay into each account. Most of my other bills go out the same day. I've done this ever since I've had a 'proper' job and it means I know I have enough to cover my annual bills. What's left in my current account is then all mine to spend on food and fun. It works for me.

Sea_Shell

What about pensions?

Are you "saving" into a scheme?  Employers or personal?

It's the ultimate "can't touch" way of saving*, at least until you're ~57!

Obviously not for ALL your savings, but maybe some of them.


*It's investments, not savings technically 😉

sacha28

Sea_Shell said:

What about pensions?

Are you "saving" into a scheme?  Employers or personal?

It's the ultimate "can't touch" way of saving*, at least until you're ~57!

Obviously not for ALL your savings, but maybe some of them.


*It's investments, not savings technically 😉

I've been paying into the NHS pension for 21 years so far, and will continue to do so until such a time as I retire (that's the plan anyway) 

The barclays account can't be touched as I can't remember the pin number to the card, nor can I log in to the online banking, and that makes me happy as I can't be tempted to use it on guff! 

It will be a long 4 years but I really hope that I can be successful!

Rob5342

I find it easiest to treat savings as a bill and pay into them as soon as I get paid, that way its gone before you even notice its there.