Mindset over finances - am I the only one

Hoenir

Bostonerimus1 said:

Hoenir said:

Roger175 said:

Alexland said:

Roger175 said:

Any purchases will be long thought out and bought without credit at the best possible price/discount available

I find that using credit facilities can often provide an additional layer of discount so the item ends up costing less than otherwise or at least you have the opportunity to earn a return on the money you would have otherwise paid upfront. As long as you are only buying the things you would have bought anyway and have the cash already available to repay then credit can be a useful tool.

Oh don't get me wrong, that's all part of the process. We bought a new settee/chairs 4 years ago and they wouldn't give any discount, but were offering interest free credit, so we took that and earned a bit of interest on the money. The point I was making was that we don't buy anything we can't afford and would never resort to credit simply to buy something that we hadn't already saved for.

No such thing as interest free credit. The margin / mark up on furniture is eyewatering.  Not least sofa's.  Which consist of very little when you take them apart. 

I consider myself frugal. For me that means spending money wisely. So when I needed a sofa I bought one to last and be passed down to the family. It was expensive, but it has only improved with use over the 25 plus years I've owned it. I try to use the same approach with everything I buy and I never buy on credit. 

Unfortunately interest free credit is effectively forced upon people. Days are long gone. When there was a discount for paying cash. Given the current indepth investigation into motor finance. This area seems destined to be next on the target list. 

Bostonerimus1

Hoenir said:

Bostonerimus1 said:

Hoenir said:

Roger175 said:

Alexland said:

Roger175 said:

Any purchases will be long thought out and bought without credit at the best possible price/discount available

I find that using credit facilities can often provide an additional layer of discount so the item ends up costing less than otherwise or at least you have the opportunity to earn a return on the money you would have otherwise paid upfront. As long as you are only buying the things you would have bought anyway and have the cash already available to repay then credit can be a useful tool.

Oh don't get me wrong, that's all part of the process. We bought a new settee/chairs 4 years ago and they wouldn't give any discount, but were offering interest free credit, so we took that and earned a bit of interest on the money. The point I was making was that we don't buy anything we can't afford and would never resort to credit simply to buy something that we hadn't already saved for.

No such thing as interest free credit. The margin / mark up on furniture is eyewatering.  Not least sofa's.  Which consist of very little when you take them apart. 

I consider myself frugal. For me that means spending money wisely. So when I needed a sofa I bought one to last and be passed down to the family. It was expensive, but it has only improved with use over the 25 plus years I've owned it. I try to use the same approach with everything I buy and I never buy on credit. 

Unfortunately interest free credit is effectively forced upon people. Days are long gone. When there was a discount for paying cash. Given the current indepth investigation into motor finance. This area seems destined to be next on the target list. 

I agree that the finance industry is problematic, which is why I avoid it whenever possible. Unfortunately that isn't practical for many people and unavoidable for almost everyone when it comes to a home, cars and now even phones. But the first instinct should not be to use credit to get something. The first instinct should be to save up to buy something and avoid the trap of debt which often comes with fees and interest. The really worrying thing is that there are many people who can't afford the basics with the cash they have on hand and that's when the worst abuses really happen.

dont_use_vistaprint

markyyyyyy said:

Hi
A bit of background
I’m 36 yrs old, single
own a small home worth £120k - mortgage of £65k
savings/investments of £55k


I always feel like I don’t have enough money, and have a bit of a ‘fear’ of not having enough to live on in retirement, even though it’s a long way off

i stick to budgets and feel as though I’m ruled by these, even though I do budget for hobbies I like, the odd holiday etc.

i feel surrounded by people splashing left, right and centre, numerous holidays a year, and feel like I’m doing it wrong? Or maybe I just have a skewed perception and people rack up debts doing these things

What I’m getting at, is this a common feeling amongst people, or should I just accept it and approach the “fu** it, what will be will be” approach? 

Just here for a discussion l, am I the only one that feels like this?

Just re-focus  that worry into good financial planning. Sounds like you’re doing good to me. Don’t concern yourself with what others are doing their finances are not your business and your finances are not there’s., just be solid in the decision you’re making knowing they are the right ones. 

try not to worry about financial security because you will never have enough, just continue to make good decisions for your future while also enjoying the money that you do have to spend, but spending it wisely.

I don’t know what financial principles you live by but mine will always live on max 80% of whatever in income I had, save or invest at least 10%, giveaway at least 10%, only borrow money for property or education, use your money to do good things, don’t gamble etc

MEM62

markyyyyyy said:

Albermarle said:

AS you have asked the question on a Savings & Investments forum, it is likely many of the contributors think in a similar way to you. 
You will not find too many big spenders, YOLO types.

and have a bit of a ‘fear’ of not having enough to live on in retirement, even though it’s a long way off

Hopefully you ( and your employer if you have one) are contributing to a pension, as normally this is the best way to save for retirement due to the tax advantages.

I am self employed and I put £450 a month into my stocks and shares ISA

£450 into and ISA = £450

markyyyyyy said:

Albermarle said:

AS you have asked the question on a Savings & Investments forum, it is likely many of the contributors think in a similar way to you. 
You will not find too many big spenders, YOLO types.

and have a bit of a ‘fear’ of not having enough to live on in retirement, even though it’s a long way off

Hopefully you ( and your employer if you have one) are contributing to a pension, as normally this is the best way to save for retirement due to the tax advantages.

i don’t put any money into a pension

£450 into a pension = £562.50

markyyyyyy said:

Albermarle said:

AS you have asked the question on a Savings & Investments forum, it is likely many of the contributors think in a similar way to you. 
You will not find too many big spenders, YOLO types.

and have a bit of a ‘fear’ of not having enough to live on in retirement, even though it’s a long way off

Hopefully you ( and your employer if you have one) are contributing to a pension, as normally this is the best way to save for retirement due to the tax advantages.

is it better to put into a private pension?

What do you reckon?  

VNX

I know this sounds silly but for some reason I can’t get my head around how the tax benefit works from salary with a pension.

im PAYE and I see the deduction on my pay slip to my pension, but where does the relief come from? Is it because my pension contribution is taken before tax? As I can’t see anywhere where 20% is added 

thank you 

masonic

VNX said:

I know this sounds silly but for some reason I can’t get my head around how the tax benefit works from salary with a pension.

im PAYE and I see the deduction on my pay slip to my pension, but where does the relief come from? Is it because my pension contribution is taken before tax? As I can’t see anywhere where 20% is added 

thank you 

From what you describe it is being deducted from your gross salary, so you will be getting the equivalent of income tax relief and avoiding national insurance deductions on those contributions. Usually this will be labelled as salary sacrifice or set out against the gross pay before deductions.

But if it is taken from net pay it may be shown alongside tax and other deductions. In this case you'd need to look at what is being received into the pension.

VNX

masonic said:

VNX said:

I know this sounds silly but for some reason I can’t get my head around how the tax benefit works from salary with a pension.

im PAYE and I see the deduction on my pay slip to my pension, but where does the relief come from? Is it because my pension contribution is taken before tax? As I can’t see anywhere where 20% is added 

thank you 

From what you describe it is being deducted from your gross salary, so you will be getting the equivalent of income tax relief and avoiding national insurance deductions on those contributions. Usually this will be labelled as salary sacrifice or set out against the gross pay before deductions.

But if it is taken from net pay it may be shown alongside tax and other deductions. In this case you'd need to look at what is being received into the pension.

Thank you. On my payslip my pension contribution shows under payments on the left and under deductions on the right.

it does say s / s so must be salary sacrifice 

Alexland

VNX said:
Thank you. On my payslip my pension contribution shows under payments on the left and under deductions on the right.

it does say s / s so must be salary sacrifice 

If is a salary sacrifice arrangement then you won't see any tax added as a result of the contribution only that your tax and NI deducted is less than it would have been. Have a play with the MSE income tax calculator to see how much tax and NI you would have paid if you had not been sacrificing into pension contributions.

https://www.moneysavingexpert.com/tax-calculator/

I don't understand why salary sacrifice pension contribution(s) would show as a deduction on the right as mine are all on the left as negative numbers reducing the payment. The deductions on the right are the tax and NI. Are you sure you don't have a hybrid mix of salary sacrifice and normal pension contributions if it's showing on both sides? Normal pension contributions should show as deductions.

Hoenir

Bostonerimus1 said:

Hoenir said:

Bostonerimus1 said:

Hoenir said:

Roger175 said:

Alexland said:

Roger175 said:

Any purchases will be long thought out and bought without credit at the best possible price/discount available

I find that using credit facilities can often provide an additional layer of discount so the item ends up costing less than otherwise or at least you have the opportunity to earn a return on the money you would have otherwise paid upfront. As long as you are only buying the things you would have bought anyway and have the cash already available to repay then credit can be a useful tool.

Oh don't get me wrong, that's all part of the process. We bought a new settee/chairs 4 years ago and they wouldn't give any discount, but were offering interest free credit, so we took that and earned a bit of interest on the money. The point I was making was that we don't buy anything we can't afford and would never resort to credit simply to buy something that we hadn't already saved for.

No such thing as interest free credit. The margin / mark up on furniture is eyewatering.  Not least sofa's.  Which consist of very little when you take them apart. 

I consider myself frugal. For me that means spending money wisely. So when I needed a sofa I bought one to last and be passed down to the family. It was expensive, but it has only improved with use over the 25 plus years I've owned it. I try to use the same approach with everything I buy and I never buy on credit. 

Unfortunately interest free credit is effectively forced upon people. Days are long gone. When there was a discount for paying cash. Given the current indepth investigation into motor finance. This area seems destined to be next on the target list. 

I agree that the finance industry is problematic, which is why I avoid it whenever possible. Unfortunately that isn't practical for many people and unavoidable for almost everyone when it comes to a home, cars and now even phones. But the first instinct should not be to use credit to get something. The first instinct should be to save up to buy something and avoid the trap of debt which often comes with fees and interest. The really worrying thing is that there are many people who can't afford the basics with the cash they have on hand and that's when the worst abuses really happen.

Buy Now Pay Later in any form creates an eternal loop that people cannot get out of. Marketing intentionally sells the line "Why wait when you can have it all now". 

enthusiasticsaver

You are in good company on here.  I always budgeted and thought twice about spending during our working lives and it is only now we are retired (we retired at 58) that I can fully relax about spending and we have more holidays now than when we worked.  We also gift more and spend wisely but do treat ourselves more.  I don't regret anything though and we did have holidays and treated ourselves whilst working but within budget.  I am more relaxed about the budget these days as I don't have the looming fear of not being able to retire when we wanted to. Having a balance of living now whilst saving for the future is the key.  You are doing well to invest in an ISA but I would also focus on pension.