Making savings before it's too late

blackcatsx2 · 15 January 2018 at 8:28PM

I remember 15% mortgage interest rate. It was my first mortgage and we were completely ignorant and naive about financial matters I revall getting a letter from the building society on a regular basis that said your mortgage has increased by £x from next month. We had very little spare money and just about managed to keep our heads above water.
Problem is when things eased up with lower interest rates and increased earnings I just spent the spare money ! It was also an era when property prices increased rapidly and our circle of friends traded up to a bigger home regularly, the bigger the mortgage the better was our 1980s mindset.
I have taken a long time to get to a different mindset and to prefer to save rather than to spend. I still have a tendency to spend though and the amount I spent on gifts last year is eye watering. I still want to give nice presents but will try and buy thoughtful slightly less expensive gifts and plan ahead so as not to buy last minute gifts. Christmas and birthdays are absolutely fixed dates so no excuse for not being organised.

[Deleted User] · 16 January 2018 at 9:33AM

blackcats, it still makes my stomach churn, how on earth we made it through, I don`t know. We moved down, housewise, after buying our first house, det on a cul de sac in leicester, we had to move to n wales anyway and bought a cosy little semi. Much better and still second hand furniture but a much better safety margin. That was a learning lesson and a half.

I have had stashes and aim to save ever since those awful scary times, which I think could easily happen again only in a differnt guise eg big companies going bust

blackcatsx2 · 16 January 2018 at 9:59PM

Ironically when interest rates were at record high levels I had a mortgage and now I’ve got some savings the interest levels are at a very low rate. Hey ho!

I feel for the workers from Carillion and for the workers in companies owed money by them. All of a sudden income stops and the company doesn’t pay its bills. How on earth could that happen with such a big company. I hope that those impacted have some emergency money to fall back on but I think that many won’t.

When my hubby was unable to work because of surgery and chemo we were lucky to have 6 months sick pay (obviously lucky is a strange term to associate with cancer treatment but you know what I mean). However, we did have credit card debt as well as usual bills to pay and the last thing we wanted to do was worry about money.

His terminal illness insurance claim was initially refused because he wasn’t terminally ill enough - seriously!

Of course we managed and our financial affairs were ok by the time he died so he didn’t have to be concerned about me from a financial perspective but I wish we hadn’t had to go through the worry of money whilst going through the trauma of terminal illnesss.

Sorry if that’s a morbid post - I can look back with understanding now and I’ve taken important lessons forward.

On a lighter note in my first house we saved up and bought replacement kitchen units one at a time each month and took them flat packed home on the bus. Luckily it was a small kitchen so only took us 12 months to do

[Deleted User] · 17 January 2018 at 9:05AM

blackcatsx2 wrote: »

On a lighter note in my first house we saved up and bought replacement kitchen units one at a time each month and took them flat packed home on the bus. Luckily it was a small kitchen so only took us 12 months to do

those were the days.

In thse days, real ground coffee was a luxury, oh that smell in coopers in liverpool. Memories, the second hand dining table that we painted lime green, the orange sofa

It is amazing how quickly credit cards and debt, even if minor, became the norm and thence came the transition from a simpler life to a life full of `things`

moneyistooshorttomention · 17 January 2018 at 9:25AM

blackcatsx2 wrote: »

Ironically when interest rates were at record high levels I had a mortgage and now I’ve got some savings the interest levels are at a very low rate. Hey ho!

With you saying that - that's the first time the cynical thought has struck me to wonder if there is a connection between the virtually zilch interest rates we've had for the last few years on the one hand and the fact that statistics indicate that the older the agegroup = the higher the amount of savings that agegroup has.

So - I'm guessing it's the baby boomers that are deemed to have the highest amount of savings and it almost feels like a tax specifically on our agegroup iyswim:cool:. It's ironic that I spent my younger days feeling like I couldnt have much in the way of savings if I wanted to - in case I became unemployed and the DHSS/now DWP grabbed them (whereas I'd safely made sure I had the benefit of my own money myself if I spent it). Now I don't have to worry about that any more (as my income is pension) I feel like I still can't have much in the way of savings - as it will whittle away gradually with inflation.

I feel like if I had £x worth of savings then I'd need to add £y to it every year to "bridge the gap" between "interest level actually paid" and "interest level necessary to keep pace with inflation". So I'd be actually "running to stand still" and the first £y I put into my savings each year wouldnt count at all - as it would be necessary to keep my savings at the same value.

Also wondering what interest rates are like in other countries - I guess I've just presumed they're as downright low as they are here? The logic behind the cynic argument would be that other European countries would also have very low interest rates but non-European countries (eg China) might actually have decent interest rates. I can feel some googling coming on as to how their interest rates compare with ours....

tori.k · 17 January 2018 at 9:48AM

This year is turning into " always something" kind of year so far, Yesterday saw a £100 for two front tyres for DH, I do budget for car cost, so the money was already there but always seems to be something, be nice to have a month where nothing needs sorting.
It was our wedding anniversary yesterday as well, it's not something we usually celebrate which is pretty lucky as DH forgot so he cooked tea out of guilt and which helped softened the blow of I need new tyres

[Deleted User] · 17 January 2018 at 12:00PM

tori.k wrote: »

It was our wedding anniversary yesterday as well, it's not something we usually celebrate which is pretty lucky as DH forgot so he cooked tea out of guilt and which helped softened the blow of I need new tyres

lol,:rotfl:I like it

money, don`t forget to count in the fscs protection

I tied myself into fixed rate saving with close bros but they are tied in with no opt out, so when I need money for a new house, I will not be able to draw on them, hence all other savings are instant access and I use lesser known building societies too, like national counties and shawbrooks

moneyistooshorttomention · 17 January 2018 at 12:45PM

I know about the "protection up to £85,000" thing on savings.

But, with negligible interest rates, one could put, say, £10,000 into savings in Year 1 and find that come, say, Year 5 those savings would have gone down even if one hadnt touched them at all (ie because they would have gone down "in real terms" after 5 years inflation had been higher than 5 years negligible interest).

[Deleted User] · 17 January 2018 at 1:18PM

money I put savings into icesave and that crashed, luckily it was protected and I got the money back. Yet another lesson and fscs is the first thing I check. Not forgetting that groups of banks/building societies can be grouped under the same umbrella. there are lists somewhere on the net. Only the unbrella is protected

trailingspouse · 17 January 2018 at 1:29PM

I have to say, I think it's better to have savings than not, even if inflation is eroding them.

In fact, that's how this thread got started in the first place, because I realised we'd dipped into our savings over the year and felt that we needed to cut back a bit in order to build the savings back up again.

I'd rather have savings that I can use in an emergency (or for planned spending), even if they will be worth slightly less next year, than have nothing at all to fall back on.

I also think the headline inflation figure is a bit misleading. For example, the present increase has been largely fuelled by increases in airfares and computer games. If you don't spend much on them, then you're not suffering the same level of inflation. Also, 2 years ago I was spending £75 a week at Sainsbury's. Now I spend £50 a week at Aldi. It's going to take a long time for my Aldi shop to go up to £75 at 3% a year.

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Making savings before it's too late

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