Saving money vs doing more

Guest2 said:
Im 30, currently renting.
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I don't mean this to sound nasty but you're not really a young man anymore. Back in my 20s I had a lot of disposable income which I frittered on holidays, booze, games consoles, clothes etc all the while renting and paying someone else's mortgage off.

Now I'm in my early 40s I look back and think how much better off I would be now if I'd been more financially responsible. I probably put 25 grand into my landlord's pocket and missed out on the opportunity to save another 25 grand simply by not frittering. Now I have a wife and 2 kids I think how much better I'd feel if I'd bought my own house earlier and kept a big lump sum of my earnings in the bank. The trouble these days is that buying a house isn't an automatic path to big equity increases, but I believe it's still better than renting.

I also knew someone who worked hard his whole life and put money aside for the future and died less than a year after he could claim it. That person was my Dad, so I can appreciate your concerns about saving forever and dying without ever seeing a return on your labour. However your life will stretch seamlessly ahead and before you know it you'll be 40 or 50 (believe me: time will really start to accelerate for you now) and wishing you'd maybe taken a couple fewer holidays and kept the money. Your ability to earn is finite and you're already a fifth of the way through your earning years and presumably with nothing to show for it bar some nice memories.

I'd advise you to think about the future. Not about your dotage but about your journey to get there. Decide what you want (and if it's holidays at least you've made a conscious decision to do that) and have a plan to get there. Look at your finances too and see what you can save from your outgoings. Pretty much everyone can save at least a grand a year just by rejigging bills and suchlike. Either way, don't just spend it all.
 
You are in a very lucky position OP, I would say start saving £800 a month and see how it goes. Also try to be more intelligent about where and how you spend the money you do spend.

I live like a king in some areas of my life and very frugally in others. I know friends who can never afford a decent holiday but are changing their phones every 5 minutes and splash out junk impulse buys all the time. Maybe that isn't you already but you can soon burn through money on a load of nothing if you don't regulate yourself.
 
mulpsmebeauty said:
I don't mean this to sound nasty but you're not really a young man anymore. Back in my 20s I had a lot of disposable income which I frittered on holidays, booze, games consoles, clothes etc all the while renting and paying someone else's mortgage off.

Now I'm in my early 40s I look back and think how much better off I would be now if I'd been more financially responsible. I probably put 25 grand into my landlord's pocket and missed out on the opportunity to save another 25 grand simply by not frittering. Now I have a wife and 2 kids I think how much better I'd feel if I'd bought my own house earlier and kept a big lump sum of my earnings in the bank. The trouble these days is that buying a house isn't an automatic path to big equity increases, but I believe it's still better than renting.

I also knew someone who worked hard his whole life and put money aside for the future and died less than a year after he could claim it. That person was my Dad, so I can appreciate your concerns about saving forever and dying without ever seeing a return on your labour. However your life will stretch seamlessly ahead and before you know it you'll be 40 or 50 (believe me: time will really start to accelerate for you now) and wishing you'd maybe taken a couple fewer holidays and kept the money. Your ability to earn is finite and you're already a fifth of the way through your earning years and presumably with nothing to show for it bar some nice memories.

I'd advise you to think about the future. Not about your dotage but about your journey to get there. Decide what you want (and if it's holidays at least you've made a conscious decision to do that) and have a plan to get there. Look at your finances too and see what you can save from your outgoings. Pretty much everyone can save at least a grand a year just by rejigging bills and suchlike. Either way, don't just spend it all.
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A very weel thought out reply and the OP would do well to heed it.
 
You're young and without too much responsibility, so now is the time to stretch yourself financially. Look at this one of two ways:

1 - Hookers and cocaine, have fun while you can.

2 - Mortgage yourself to the max while you're best able to pay it back and reap the rewards in a few years if you buy sensibly. You will need to save for a deposit before this obviously.

If you have kids and haven't gone for option 2, your ability to save/pay back a large amount each month will be seriously limited.
 
I'd be looking at saving around three quarters of that leaving you plenty to blow if you should so wish.
 
I'm exactly the same. Decided to go for short term pain. 6-12 months of total savings to get a house, then back to the fun.

I still want the fun/holidays etc, so have no need for a massive house and huge mortgage. Limited my self to 110k max, which isn't a lot of options here, but it's enough. And that's just 5.5k deposit on the 5% government scheme. Once I have it, then so much money can go towards traveling and hopefully still be able to put say 200 a month into savings, and I'll be building up an asset at the same time. The mortgage is no more than I'm currently paying anyway.

So a kind of do both, but short term pain to get a property brought.

And I wish I had been more sensible, I wish I had put 100 or so away every month since I started working.
Or I looked into buying a flat about 9years ago, if only I had gone through with that, what a mistake.
 
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As someone approaching 50, and thinking about the thousands upon thousands of pounds I burnt through in my youth, I would certainly do things differently now and save a lot more!
 
If all continues to plan we'll have paid the mortgage off by the time we're 40, at which point we'll...I don't know...carry on doing what we do now. We ski twice a year minimum (ok now we ski every weekend but thats simply because we moved), we dive twice a year minimum, plenty of other trips and going out, and we don't not have fun.

I think the main aim of us saving is to firstly be able to afford a high quality education for the children, and to not be a burden later on in life, should we have any.
 
I wish I had saved more when I had the capability rather than just 'living' the money.
 
Guest2 said:
At the moment I am in a position where I could save around £1000 a month.
I wouldnt be able to do what I do currently such as go on quite a few holidays, buy nice things, go on big city nights out, days away etc. but could save it for a house deposit or something else. I do have a private pension so am saving some which my workplace matches.

Recently I have been to Iceland for 4 nights which was fantastic. Day trips such as glacier hiking, ice climbing, snow mobiling, northern lights and also been skiing in January.

I am in the mindset that I would rather have fun in my younger(ish) years whilst I am able to do these types of things rather than save it all for when I am old and decrepid (or even die a few years into retirement as my grandad did after working hard all his life)

Am I being foolish not saving as much as I could? Do you have the same mindset as me or the opposite? Just curious to hear people views on this
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I'm in the same position as you, being able to save around £1000 a month. In the past I took quite a lot of holidays and bought nice stuff for myself and the missus, however now I've started saving those money which are going to go towards a deposit for a house. Also by saving £1000 it doesn't mean I won't be eating nice food or going out, just that I will be only going out once a week instead of 2-4 times a week and to relatively average places instead of nice brasseries etc.
 
If you've got a mortgage pay that down as fast as you can. You'll either pay it off a lot faster and end up with loads of money in your pocket rather than the banks when you do, or you can reduce your payments, and end up with more in your pocket....
 
mrbazmondo said:
If you've got a mortgage pay that down as fast as you can. You'll either pay it off a lot faster and end up with loads of money in your pocket rather than the banks when you do, or you can reduce your payments, and end up with more in your pocket....
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I wouldn't - mortgages are available for less than 2% these days, pretty much anyone who bought in London over 3 -4 years ago ought to have enough equity to switch to a very low rate. I don't see the incentive to overpay a loan which is charging interest at 1.79% say - personally I'd rather stick with saving/investing and stick to the scheduled repayments.
 
If you have the basics covered (food, shelter, clothes etc.), always save money. That doesn't mean you should turn into Scrooge, just make sure your monthly contribution towards savings remains relatively constant each month. Look at it as an installment for an imaginary loan if that works for you.
 
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I can totally relate to this thread. I've recently stated a new 10 month job away from family, friends and my girlfriend. in two months of working so far, I've found myself going somewhere every single weekend, each to the cost of at least 150 pounds per time, plus the usual ski holidays in between. This is taking a large amount of my pack packet away from savings, to the point everything goes on bills and socialising.
Struggling to find the balance between seeing people (my girlfriend, especially) and staying in over the weekend to save some money. This is confounded even more by the fact that my parents just told me they were giving me £5k as they just finished paying off the house and get a large lump sum back, so I'm seriously in a position where I could put a deposit down in a few years if I save properly now.

Sorry if I derailed, but yeah. I know where you're coming from! My only advice is to save for a rainy day, as they inevitably always come.
 
dowie said:
I wouldn't - mortgages are available for less than 2% these days, pretty much anyone who bought in London over 3 -4 years ago ought to have enough equity to switch to a very low rate. I don't see the incentive to overpay a loan which is charging interest at 1.79% say - personally I'd rather stick with saving/investing and stick to the scheduled repayments.
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Hedge the bets I guess for when interest rates climb, and when there's fa available interest wise. We should really up our pension payments though..
 
I'm 32 and have had a mortgage since I was 26. In that time the value of our house has increased from £160,000 to £220,000. In four years time it will probably be £240,000+ (obviously property prices can go up as well as down). :p

I think the longer you leave it the more you'll need to save (higher prices). As mentioned 30 isn't young, but it certainly isn't old.

I'd hate to line someone else's pocket so I'd try to put £750 a month of your £1000 and look to buy ASAP.

Even £750 a pop will take almost 3 and a half years.
 
Save when you are young and you will reap rewards later on in life. You'll still be able to ski etc in your late 30s-40s. Except after a decade and a bit of austerity you should have a house paid off and investment portfolio to help with things. If you're very smart you might be able to retire early.
 
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