What are long term savings for?

Mark_d

I've always been a 'saver'.  I'm rather frugal - careful with money and not someone who over-indulges.  I very rarely buy anything for myself and when I do, I don't go for luxuries - I'm not interested in spending for iPhones, Sky TV etc.

I like to think I've done well with my long-term savings/investments...but as I get older I ask when and how should I be looking to spend this money to enjoy it?

I do have a mortgage on my property but I don't want to repay it early because I believe the average rate of growth of my investments exceed the rate of interest on my mortgage.

From the age of 20, I have been saving heavily into my pension hence I expect to have a  comfortable retirement.

I see people around me treating themselves to the latest gadgets, travelling to all corners of the world for amazing holidays, buying brand new cars (possibly bought through loan).  I would love to do more travelling around the world whilst my health still allows it but I somehow feel reluctant to dig into savings.  I always have.

What are long term savings for and how do you enjoy it?  How much long term savings should be retained for an unexpected major event (other than something which would be covered under insurance)?

InvesterJones

Start with the goal, then plan savings/investments accordingly.

It is tempting to just save for saving's sake, but once you have goals you can much more accurately take on the right level of risk/return - thus avoiding over or under risk.

Some people do like travel or new cars - both could be considered worthwhile experiences if that's what they find fulfilling. I'm a big fan of saving up to treat myself to courses for learning/improving new skills - not career related ones, but for hobbies that I find enjoyable.

Sg28

This is quite an interesting question.

Similar to you I have always saved hard. Ive been lucky that in the last few years Ive made quite a nice amount of money, and have now paid my mortgage off (well offset the money in a savings account anyway) and have plenty of savings. 

I realised that I dont actually need to save anymore, it wouldnt matter if I spent all my surplus each month. 

So I decided that if I wanted to buy or do something I would, to start enjoying the money as I never have done this before. 

So far ive bought and done very little, and carried on saving.

I cant actually think of anything I actually want to buy that would give me more satisfaction than having the money in the bank. 

mebu60

Where is your top travel destination? 

MeteredOut

Mark_d said:

<snip>
I would love to do more travelling around the world whilst my health still allows it but I somehow feel reluctant to dig into savings.  I always have.

<snip?

I think you've answered your own question as to "what are savings for". You now need to change your mindset to convince yourself that you deserve these treats - you've put the hard work in and you deserve the reward.

thegreenone

OP, we have a dedicated Holiday/Entertainment Account and channel money in every month.  That money is for exactly that and we don't touch our main savings.  In fact, we have lots of 'pots'!

Swipe

The problem is when you've saved so hard for most of your life some people find it very difficult to break that mindset and start spending it when they do become financially independent.

VNX

Very thought provoking thread.

as I’m sure like most in this forum I am a saver, have been from as long as I can remember, my old man was a bank manager so I’m sure that’s where I get it from. 

I don’t save so much as to go without or not enjoy life. But I I don’t spend a lot and save hard.

I had a similar thought recently, I guess I’ve always told myself save hard just because, yo7 always need money.

I was chatting with a friend recently and I said I was locking away a lump sum of my monies in a fix bond and when the fix ends I could potentially clear my mortgage. 

They said wow that’s great and I said yes but I would need to then save hard to put back all the money I have used to clear the mortgage. 

They said why? I said why what? They said why do you have to put every penny back and why ASAP? 

And I know it sounds daft but it really stumped me, I am such a saver and so focused on putting away what I can and building what I have that the thought of taking a lump sum out and not replenishing it ASAP seemed odd, but sometimes one can’t see the wood for the trees. 

And this forum is nice and thought provoking as we all have differing views which is healthy, last place I would want to be is an echo chamber of people all with the same views. 

Krakkkers

How much is a lot or too much savings?

MeteredOut

Krakkkers said:

How much is a lot or too much savings?

You could work backwards from your desired retirement age, what lifestyle you want at that point, what that will cost, and work out what savings/investments you'll need to have that lifestyle.

JGB1955

I ask myself the original question several times a day.  Why, when I can get £10K p.a. (excess) interest on my savings accounts, am I looking at YS items in Sainsbury's?  It takes a long time to lot loose and spend!  I'm working on it.... but only at £8K per annum planned so far!