What are long term savings for?

arnoldy

Spending Money = Happiness is NOT a true statement. I see so many people who find any money burns a hole in your pocket and needs to be spent (usually on eating out and holidays).That can lead to quite a rootless existence of driving for a lunch that you don't need, that on reflection is 10 X more expensive than you could do at home and you have dropped £50 for the couple of hours.

If you live in council/social housing you can get away with minimal savings - no expensive house repairs, new kitchens and bathrooms, new roof, painting inside and out. No worries about house insurance etc. On the other hand private renters have to worry about deposits, moving costs, saving for their own place etc.Homeowners have to worry about expensive repairs and updating.

As ever you either have to be pretty much totally dependent on the state, or have good private income savings. The bit in between is tough - the space occupied by the minimum wage grafters.

Dizee123

A very good question, and definitely one that we struggle with.
I think you need to set a level of savings that you, personally, are happy with for security of lifestyle when life, inevitably, hits you with some low blows.  This will be different for everyone as circumstances vary widely as described in the posts above.  However, a small level of savings could restrict access to means tested benefits, so this must also be considered.

Above that safety net level we use the virtual pots concept (holiday and travel pot, vehicle maintenance and replacement pot, household maintenance pot, baling out the children pot are the main ones).
This helps with the spending mindset struggle as it is easier for us to spend pots designated as spending pots, as I know that spending will not compromise the baseline savings level.

Thrift was ingrained into me at an early age, so I often take pot underspends and save/invest them which helps with the concept of continual saving which offsets the spending anxiety (this latter being self-imposed as we have security of a good DB inflation linked pension and DH still earning a salary).  The psychology of being a spender, versus a saver is absolutely fascinating and it may be that for some it is difficult to completely change from one to another.  Baby steps in either direction is probably the best many can accomplish... 

thegentleway

I’m a saver as well but, not happy unless I spend less than I earn. I find buying experiences and investing in others the most enjoyable ways to spend money 

JB50MSE

Mark_d, this is my kind of question! Personally, I'm VERY careful with the pennies and I find the pounds accrue quite nicely in savings of various kinds, especially for cash in 2023 with higher interest rates (not as high as the during the '80s though). I also don't want TV viewing packages, but I do find a smart phone very useful.

Check (by calculations, and by asking questions of your providers) whether you really do gain overall by not paying back your mortgage. Some people have other reasons for keeping and renewing mortgages e.g. saving on inheritance tax, but "savings doing better" is not usually a fact-based reason.  

Consider your later life and whatever you might like, hope or fear. You sound like the sort of person who may wish to make provision for the actual risks of your older age, but don't fall for the sales traps, however persuasive they might be. 

If you would like to travel while you still can, but are unsure about it, start by thinking of one or more places or countries which interest you, and get the Rough Guide (not that rough these days!) and Lonely Planet  books for that location/country out of the library, and read them to help you decide. If you don't like the sound of it, choose another place, or style of holiday.
I find Librarians can be very helpful in pointing me towards interesting books related to travel or a particular country, non-fiction and fiction. Being a money-saver, I don't actually buy the latest edition of a travel book until I decide I want to go there, and maybe not even then. You can also research locations on the internet. Or styles of holiday e.g. by train, walking, touring, relaxing, cities, countryside, nature etc. in the UK, or anywhere in the world. Whatever your tastes and budget are, books can be helpful to get some ideas of any location, the places of interest, what to do, atmosphere, weather, style, food, costs etc. Much more helpful than most travel agents or holiday brochures (unless you want mass-market holidays, which I imagine you might not like). There are also several "special interest" holiday companies which offer vast ranges of holidays, everything from angling to zebra-watching (A-Z, smile). 
Immediately after booking your holiday, be sure to get good comprehensive travel insurance, which takes account of your age and any medical conditions/prescriptions, because if it goes wrong it can be a horribly expensive nightmare. It can sometimes be cheaper/better to get annual travel insurance, especially if you may decide to go away for more than a week, or more than one holiday in 12 months. Check via MSE and Which?
It's possible to create a personal travel/holiday Package with individual choices of flights plus accommodation, or plus car hire, via Trailfinders.com (a rare, reliable and highly recommended travel agent) which gives better protection and is usually cheaper than buying all parts of the holiday separately. Sometimes I travel alone or with a friend, and sometimes I choose a group tour or stay; the "package" can apply either way. But Trailfinders don't work with every accommodation or transport provider. I tend to do a lot of research online before I decide where I want to go, which saves time and money when I get there. 
Good research and good luck!

enthusiasticsaver

I am a saver (hence the user name) but we have always spent too and aimed for a balance throughout our lives.  I saw my dad die at 63 and now I am the same age and some of my friends and relatives are now struggling with health issues so I am glad we never said we would constantly save for retirement, paying off mortgage etc and we always budgeted for holidays, home improvements and new (not brand new) cars. We always tried to get good value though and we did overpay our mortgage and invest for early retirement and we did in fact retire at 58.  We also managed to help our children with weddings, house deposits, university and childcare costs for grandchildren. 

Now our long term investments in SIPPS and ISAs are there to supplement our occupational pensions.  When the state pensions kick in, next  year for DH and 2026 for me then we will possibly stop drawing on the ISAs.  

OP you do not say what your circumstances are in terms of whether you have a wife/husband/children or how old you are.  Maybe do as I did and allocated percentages of your disposable income to different goals.  So I used to split our spare money into 3 and put one third into short term instant access savings usually for holidays, christmas, the odd treat or meal out or a new gadget if DH wanted or needed one and maybe replacement phones etc.  One third would go to medium term savings usually via regular savers for new cars or home improvements/long haul holidays or gifts to the adult children etc.  One third would go to long term investments/overpaying pensions or overpaying the mortgage.  

It sounds like you need to relax a bit about money as really it is just an instrument to hopefully enrich your life. Some people really do enjoy a simple life though and there is no shame in that but worth thinking what you will eventually do with this massive nest egg if you do not plan on spending any of it.  Life is short so if you want to travel what is stopping you? 

Frequentlyhere

I saved hard to retire very early, worth every penny. 

Ocelot

I've always been a saver since I've been working. I also asked myself the same question in circa 1993, when I had around 70,000 saved up. I decided to spend it on a house in 1996, and I bought a 3 bed house in the South East for (almost) cash, leaving aside 10k or so for repairs etc. I wish I'd been a bit bolder and bought a 4 bed detached (although, even then, they were a lot more expensive).

Every since then I've carried on saving, and it kind of becomes an objective in itself.

Nowadays I have sufficient so that next time I'm made redundant (nearly all previous jobs have gone that way) I won't bother getting another one, and will use my drawdown spreadsheet to guide me on an income from the capital sum and income from the remaining sum, as it reduces, until pensions kick in in my sixties.

I don't want for things, though. If I want something I'll buy it, but I seem to have acquired frugal tastes over the years.

In summary, I suppose it is security rather than anything.

DiamondLil

Having spent my late teens through to late thirties with not a pot to pee in, and having been brought up to "always spend at least a penny less than I earn", I've been a saver since then. 

Worked two jobs when the children were little, as did my partner, and managed to pay the mortgage off early; although this was helped by having taken out the mortgage in the early eighties at a starting rate of 13 - 14% and carrying on with the same monthly payments when rates came down.

Other than the Aston Martin that I've always hankered after, we have had everything we need and more and I now find it difficult to break the saving habit.

But, I justify it by knowing that I'm now saving for the grandchildren's futures as it's going to be much tougher for them I feel.

daveyjp

If you want to travel and are able to, do it while you are fit and healthy,  I'm so glad I did so when I was in my 20s and early 30s as whilst my wanderlust is still there and I do want to see more I know I've banked lots of travel memories.

I've known too many people wait to do the dream trips when they are older, but then find for all sorts of reasons they can't and regret it.

Linton

daveyjp said:

If you want to travel and are able to, do it while you are fit and healthy,  I'm so glad I did so when I was in my 20s and early 30s as whilst my wanderlust is still there and I do want to see more I know I've banked lots of travel memories.

I've known too many people wait to do the dream trips when they are older, but then find for all sorts of reasons they can't and regret it.

Because we saved throughout our lives we can afford to travel whenever and wherever we want whilst we are fit and healthy in our 70's and have the time to do it.  We want to enjoy life now, not live on banked memories.