42.3% of Londoners have less than £100 in savings

Merlin5 · 30 Sep 2016 at 00:10

The problem with credit is that once you've taken home that £2000 PC and the excitement has worn off, there's far less motivation to put aside that £200 a month to pay it off, hence why so many people get into debt. On the other hand, saving that £200 a month until you can AFFORD it, means that once you hand the money over, you get your reward to enjoy and never have to think about the cost anymore. There's far too many people going for buy it now pay later who realistically cannot afford the luxuries they think they should have.

Chojin · 30 Sep 2016 at 00:18

regulus said:
Apart from food and shelter, you're about as much as a slave as you choose to be.

Honestly, to reach for a dramatic term here; you can unplug yourself from the 'spending' matrix at any time.

I won't bore you with details but I find so much joy in my life and it cost me pennies. Sometimes literally.

Read this good thing on Reddit a while back that can solve about half the money troubles out there. Just two points.

1). Recognise when you're trying to buy happiness or impress others
2). Eat at home

Number one has never ever been a problem for me as I don't give a crap what others think or say. And the 2nd one I had to work at getting better at. And the money just suddenly started building up fast.

I am similar and live within my means, finding enjoyment in the simple things. But in general as a the populace we are just running on a treadmill. The middle class is an illusion, there's only rich people and workers. Whether it's £100 or £50,000 someone has saved up, they are still turning the wheel for someone else.

Narj · 30 Sep 2016 at 00:23

I get anxious unless I have at least 6 months' salary in savings.

In reality I could stretch that out over a few years if I needed to but I really struggle to understand the lifestyle of friends who whack everything on credit. I have mates who drive flash cars, have bigger houses than me and go on more holidays despite me earning 3x what they do but the fact is that they are massively in debt.

Chojin · 30 Sep 2016 at 00:30

Tefal said:
Hubter gathers had to do exactly that.

Do you think hunting is like popping out to the shop's? Hunting trips could be days to weeks and end in failure.

If they didn't have anything stored theyd die.

Also we live in an area with a winter whoch means we rely on stores even more as its impossible to live through the winter day to day in any kind of worthwhile life.

I think you underestimate our ancestors. There's evidence that hunter gatherers were adept scavengers hence the use of stone tools for breaking open bones. Not all relied on storage, and when they did it was within a small group and not the mass scale it is now.

Its funny you're a "slave to the system" because you have to work 35 hours a week, but doing 70+ hour weeks every week of the year as some kind of subsitance farmer is freedom

Do you have a reference for your 70+ hour week?

shadow_boxer · 30 Sep 2016 at 00:30

I think it's incredibly sad that so many people live that close to the brink. I know the figures may not be fully representative but the numbers quoted do seem too high (particularly for London). I can entirely sympathise however as once I graduated and had just started working my account was probably very similar.

My wife and I aren't big spenders in general and thankfully we're in a much better position now. We do save a very high proportion of our salaries and I must admit I do sometimes wonder whether it's all worth it. We could manage on just one of salaries. We're not exactly tight and will treat ourselves to a couple of holidays a year but we really need to think about investments and proper financial advice. Unfortunately neither of us are particularly clued up finance in details or big risk takers so have only invested in property.

On a slightly similar topic what are peoples thought on overpaying on Student loans?

shadow_boxer · 30 Sep 2016 at 00:31

Double post

Efour · 30 Sep 2016 at 00:35

shadow_boxer said:
On a slightly similar topic what are peoples thought on overpaying on Student loans?

From a purely financial standpoint its stupid because its one of the cheapest loans you will ever get/ so you are better off paying the minimum for infinity +1 and paying off hight interest loans like mortgages, credit cards, personal and car loans.

But if you are not paying any of those things then sure why not? I'm sure it would be better put towards a downpayment on an apartment of House. I assume you are British and you "must" get a house in order to be measured "successful" at life

shadow_boxer · 30 Sep 2016 at 00:41

Thought as much that's not worth paying off early. That's basically what doing now and saving towards a property.

shadow_boxer · 30 Sep 2016 at 00:51

Phate said:
I know someone with over 75k in the bank. She saves nearly everything she earns. Only buys the cheapest things. Doesn't treat herself. Doesn't go away. Doesn't go out. She has a kindle and reads books, that's her thing.

I asked her why she saves so much and she said "well I need savings"

When you ask her what for she just says "well because everyone needs savings"

I remember when her kindle died and she freaked out that she would be putting £100 less in savings due to having to replace said kindle...the amount of pressure she puts on herself is incredible.

Thats a bit too far imo...I do think she will be someone who takes it to the grave and doesn't really enjoy much of anything in life. She has been completely and utterly brainwashed.

Sounds very similar to my wife's cousin. Brainwashed by her tight Dad. He basically didn't take them on Holidays (despite being able to afford it) or do anything that involved spending money. Studied at university from home. Then did a masters too from home. After graduating and living with parents she literally saved every penny. No contributions to household upkeep or shopping. Saved up well over £100k by the time she got married. First holiday abroad was the honeymoon! I feel sorry for her Husband tbh. They have separate bank accounts and still split the cost of meals out together. Madness.

regulus · 30 Sep 2016 at 01:30

shadow_boxer said:
Sounds very similar to my wife's cousin. Brainwashed by her tight Dad. He basically didn't take them on Holidays (despite being able to afford it) or do anything that involved spending money. Studied at university from home. Then did a masters too from home. After graduating and living with parents she literally saved every penny. No contributions to household upkeep or shopping. Saved up well over £100k by the time she got married. First holiday abroad was the honeymoon! I feel sorry for her Husband tbh. They have separate bank accounts and still split the cost of meals out together. Madness.

It's only madness because the overwhelming majority of people call it madness. I think it's madness that half of London don't have more than 100 bucks to their name. But because 42% of people are 'doing' (suffering) it, it suddenly seems a bit more normal.

But yes, it's extreme. However, if managed intelligently without the seemingly autistic factors attached to it, she's in for early retirement if she choose. Or if not, an entire life of complete financial ease and comfort.

I'm sure her 'madness' is looking pretty good to 42.3% of Londoners right now

Clipsey · 30 Sep 2016 at 03:38

Guess it's a fine balance of living life in the moment whilst being responsible to the what if.

Currently have probably more than 5yrs of bills saved and ready, however that could change as I buy and flip properties with that money.
I usually talk myself out of purchases or see value in what I'm buying and then haggle

Nothing beats logging into your accounts every morning and seeing huge safety nets.

h4rm0ny · 30 Sep 2016 at 07:59

StriderX said:
Women.

Why do I get the feeling that if she'd been spending all the money on stuff she wanted and had no savings, you'd still have made the exact same comment? :rolleyes:

h4rm0ny · 30 Sep 2016 at 08:15

fez said:
Whats always amazing about peoples savings is that its almost entirely unrelated to salary. Its like the benefits argument. Some people will live well on them and never get into debt whilst others are pennyless within days of getting money in their account.

Its all about how much you spend and whether you feel saving are more important than having a bigger house/flat, a better car or more holidays etc.

I don't think that's true. When I had a low income I didn't save. Now I have a good income, I do. But I'm broadly the same person in so far as my attitudes to money go. It's obviously true that people differ in how they save but saying it's "entirely unrelated to salary" is naïve. It is far harder to save if you're on a low income. Especially if you have family / children. I mean how many parents are going to say "you can't have that toy because I need to stick to my £50 a month saving regimen?"

Faustus · 30 Sep 2016 at 08:46

I notice there's a big story today on the BBC website stating that thirtysomethings have never had it so bad and are the worst off generation. However, there was also a telling statement from someone of that age group -

For pretty much everyone I know around my age it's hard to get a house. Everyone was spending on credit cards that were limitless and people could get another one and another one.
People didn't think they needed a plan

There is a generation that has grown up thinking that credit cards and cheap credit is the way to live and expect all the good things in life NOW. Live for today and tomorrow will take care of itself. That philosophy is now coming back to bite people.

UTmaniac · 30 Sep 2016 at 08:48

h4rm0ny said:
I don't think that's true. When I had a low income I didn't save.

All depends on your earnings and your non-essential expenditure.

Think about how much you spend monthly on things like...
Cigarettes
Alcohol
Running a car (travel)
Upgrading your 6-month graphics card because a new model is out

etc.

The above could easily be ~£200+pcm for a lot of people, for me I've spent ~£550 on buying a new bike in Feb and maintaining it; weekly bus tickets back until the summer.

I only earn ~£1k take-month pcm and ~£750 of it goes on rent and essential utility bills.

Freakbro · 30 Sep 2016 at 08:51

Faustus said:
There is a generation that has grown up thinking that credit cards and cheap credit is the way to live and expect all the good things in life NOW. Live for today and tomorrow will take care of itself. That philosophy is now coming back to bite people.

The thing is, they didn't come up with that way of thinking on their own, it was actively taught to them by 'society' ie: Banks wanting to lend as much as they could, big business advertising all their tat as essential to life etc etc

The level of consumerism we have experienced was intentionally created and that generation were brought up being taught it from an early age.

daz · 30 Sep 2016 at 09:16

As Housey, says, being able to cover your mortgage for 6-12 months is a good position to be in, and realistically is what you should aim for. You never know what's around the corner. Once you have a bit of security, then what you do with your money is up to you.

Richdog · 30 Sep 2016 at 09:19

daz said:
As Housey, says, being able to cover your mortgage for 6-12 months is a good position to be in, and realistically is what you should aim for. You never know what's around the corner. Once you have a bit of security, then what you do with your money is up to you.

There is a good chance that there will be another global financial crisis within the next decade or two, and anyone without savings may well find themselves in the ****.

thep02 · 30 Sep 2016 at 09:44

Yeah but only because their iphone 7+ payment was just taken out of their act.

regulus · 30 Sep 2016 at 09:46

UTmaniac said:
All depends on your earnings and your non-essential expenditure.

Think about how much you spend monthly on things like...
Cigarettes
Alcohol
Running a car (travel)
Upgrading your 6-month graphics card because a new model is out
etc.

The above could easily be ~£200+pcm for a lot of people, for me I've spent ~£550 on buying a new bike in Feb and maintaining it; weekly bus tickets back until the summer.

I only earn ~£1k take-month pcm and ~£750 of it goes on rent and essential utility bills.

You got a nice PC though.