Problem saving money

PeonyPink

Hi all,

I really need help with this. I try and fail every month to save money. I am working full time, in professional job. It’s not spent on shopping necessarily but just small amounts of money of €40 here and €20 there and at half way through the month, I end up dipping into the “savings” which never accumulate. I’m trying to save half my wage each month.

I live at home and pay a small amount each month and with my bills (health insurance etc) amount to about €500.

Im 31 and can’t seem to get a decent amount saved for any deposit and I can’t see a horizon.

Another problem is my OH always brags on how he has a deposit already and I don’t say anything.

I know I should have at this point but I was wreckless with spending over the years through my twenties and now I still have nothing. Im paying for it now. It’s embarrassing.

Any advice would be much appreciated.

fits

have you any debts?

PeonyPink

https://www.boards.ie/discussion/comment/117895063#Comment_117895063

Nothing at all!

No loans, no credit cards

fits

Spreadsheet. There are generic ones available for excel. Allocate all your spending and then track for a few months to see where you are going wrong.

Spanish Eyes

Save first, spend later. Set up a direct debit into your savings and do not touch it, do not get a card for this savings account or cut it up. Work out how much you need (not want) to live on outside your savings amount, with a little treat now and then. Cut back on takeaways, pub, weekends away and holidays etc. if you do that. Those are nice to have but totally unnecessary. Remember you WANT to save so only you can do it. Have a look at what you spend your cash on, maybe it's take away coffee/bought lunches, they add up hugely. Bring your own. There are lots of ways to economise and save, start today. Best of luck.

Healio

Assuming you're more interested in getting into the savings habit first; look into setting up a standing order to move an amount at pay day every month/week.

I personally send my half my savings figure into an account which has a 7 day notice window before you can withdraw, so it gives you the time to evaluate if you really need that money/purchase.

The other half goes into a generic savings account with instant access in case of emergencies.

Once you get a bit of a pot going, you can probably look at investment options, but hopefully can help you in the short term.

tallaghtjoe

Open a Credit union account and set up a direct debit for pay day every month. Dont over estimate your savings amount, make sure that you have enough to live off each month. Start with a realistic figure to save each month. Once you start saving you will get use to it after a couple of months and wont miss it going out of your wage, you can up the amount then.

Could also use Revolut account to divide up your spending, so that you have a better control on it.

Best of luck with it

cee_jay

What are you saving for? Unless you have a reason for saving, you will continue to dip into the savings as there is no goal to aim for. If saving for a deposit is a pipe dream, and you just have one pot, it is easier to take money from it.

My advice is to name your saving accounts. Don't just have one, have multiple for your different goals (some will be short term, others more long term).

When you see the name on your saving account, it becomes more of an emotional reaction, and you will have to decide which one of your goals you might not reach by withdrawing from the accounts.

I could have quite a few of different savings accounts at any one time... Holiday abroad, fancy hotel stay, car insurance, new kitchen, new bathroom, etc. Each have a date for when I want this done, so I know what I save every week/month to achieve this.

ztoical

Don't try for 50% if you are not good at saving. I had major issues saving until i started using the 20/30/50 rule. 20% savings, 30% for personal spending and 50% for all your bills. Put the 20% into a savings account or pension that you can't take the money back out. Set up a standing order to transfer the money the moment you get paid. Once I started using this method I found it much easier to save and build those savings up and I didn't find myself running out of money each month. I actually started saving additional cash left over in a different savings account to treat myself every now and then. The key is to start small with a simple task - save 20% of salary each month - do this for several months until it is a habit.

You can look then at your spending and see where you are wasting money, over spending etc etc but start with a basic habit first and build

https://www.boards.ie/discussion/comment/117895255#Comment_117895255

This is the best advice in this thread. Doesn't have to be a CU account, but the same principles apply:

1. Get it deducted at source - you can't spend what you don't see in your account
2. Have it in an account that's difficult to access - No ATM, no online withdrawals, need notification to withdraw money, maybe even another named person to agree etc.
3. Don't obsess about what's in it - try not to keep checking it or you'll always think "I've €2k sitting there, course I can go on holiday"
4. Start small and increase as you go - You'll be amazed how quickly it adds up. I was putting say €60 quid a week / 250 per month aside for a while, then got a small incremental raise in work. I was able to live comfortably on the amount I had after savings, so I increased the DD by the same extra amount I was now being paid....i.e. I used to get €100 and I'd save €10. Now I'm getting paid €107.50, and I saved €17.50 instead. Seems small enough that it won't make a difference, but that few quid doesn't be long adding up.

Pablo_Flox

You haven't said where your money is going so its hard to give detailed advice, but the I would say that advice above is spot on in my opinion.

Set up a direct debit to take money out of your account the day you get paid and then forget about it. Anything left in the account is your money for bills, nights out, clothes, etc.. If there is anything left at the end of the month take it out right before your paid and put it with the other money.

After that you need to give it time and trust the process. There won't be any miracles, but with time it will really start building. If you can save €1,000 a month (if you are in a full time professional job that, and living at home I can't see why you couldn't) then this time next year you will have €12,000. If you can up that to €1,5000 per month you would have €18,000!

The real secret is to forget about it once the direct deposit is set up, and then to give it time to work.

AlmightyCushion

The good thing is you are trying and it looks like you have at least set up standing orders to your savings account. The problem is you end up dipping into and you have no idea where your money is going. You said it yourself, you don't know where your money is going.

The only way to fix this is to track every penny you spend and categorise it. Then you can see where your money is going and where you can cut back. You might actually be surprised how much money you spend on certain things in a month when you add it all up. All those small €5 here, €10 there, €20 here all add up.

BettyBlue22

One thing I found really helpful when I was trying to become debt free was writing every expenditure down in a notebook. You'd be surprised how much you think about what you're spending your money on when you have to put pen to paper. Just doing it online isn't as impactful.

Everything, whether it was a few quid into a charity collection on the street, rent, parking, or a postage stamp went on the list. After a month, I analysed where my money was going and categorised it. Then I set an excel sheet up with columns, so everything was on one page, and I could see what was out of control and where I needed to budget better or be more realistic about my actual expenses.

PeonyPink

Thank you all for your replies, very handy tips here.

Im trying to save for a deposit for a mortgage approx €25-30k

it just feels impossible because I never accumulate the savings, it’s dipped into all the time.

it’s a direct debit and it takes my money and it takes 48hrs to access it. So it’s not locked away per say.

Im gonna try and keep a diary.

Tork

How about getting a Revolut card and loading a set (but realistic) amount of money onto that once a week. Then try to make it through that week just using the Revolut card to pay for your things. Perhaps you could try leaving your usual card at home and just bring the Revolut one with you when you're out. Getting into the habit of saving isn't easy when you're in the habit of treating yourself or find it hard to say no.

Have you done a retrospective on your accounts?

Take your statement over the last 6 months and categorise your spending, it might help you figure out where you can save.

Fol20

I would echo what others are saying here:

1. You need to walk before you run. If you are not used to saving, start off with 20pc automatically going into saving the minute you receive your payslip. Make sure its deducted before you get a chance to spend it and this is money you cannot touch. If you keep dipping in and out, you feel bad and it seems like its not working so again start of with 20pc, see how you get on and then in 6 -12months try and get it to 30pc etc.
2. I would recommend looking into a person called Dave Ramsey. He has some great approaches to saving money.I know with covid, people are more reluctant to use cash however from a saving pov, its better to not use card as emotionally its harder to part with cash that swiping your card and getting your card back. He recommends only spending cash and at the start of every month. put x amount of money into several envelopes, 1 for bills, 1 for entertainment etc and thats all you can spend.
3. You need to start documenting every time money comes out and i mean everything. There are some handy apps for this or you can just write it down. whatever suits you. Then at the end of the month, you need to see where your money goes and re-evaluate how to save more.
4. How often are you going out, does your partner pressure you to go out more even if you dont have the money? You need to be disciplined and if you have spent too much on optional stuff, well tough, then that means you cant go out for the rest of the month and you need to suck it up.

is_that_so

https://www.boards.ie/discussion/comment/117897241#Comment_117897241

I'd even go as far as to record every item you spend money on each week and maybe do it for a couple of weeks as that may not always be obvious from statements. Sometimes these incidentals we don't notice can account for quite a bit. It's also good to regularly ask yourself the question "Do I really need this?"

accensi0n

The only other thing I'd add to all the great advice so far is move job. Do some interviewing and see what's out there in terms of packages, could mean earning an extra few hundred a month or more.

Rock Steady Edy

It's great you've identified that you find it hard to save, so now you just need to have a few tricks up your sleeve to help you execute a plan.

First, decide what's a realistic amount that you would feel good about having saved by the end of next month / by the end of the year / by the end of next year. If you got into bad patterns in your 20s that stopped you saving, do some of these still exist? You haven't said much about what you spend it on (other than the odd €20 or €40 in the middle of the month) so it's hard to identify what's stopping you. Your OH sounds like they might be able to help you here and probably have greater visibility on your spending patterns. Money can be a contentious issue between partners, but if you ask them to help you it may enhance your relationship as well as get you into better habits.

Watch a few of Eoin McGee's "How to be good with money" and you'll probably come across very similar themes and may give you some good ideas too.

Another thing to remember is that as and when you have get into the habit of saving a regular amount each month, it shows discipline. That's important if you want to apply for a mortgage, because you will need to show 6 months bank statements to the mortgage provider so they can see you have enough left each month to pay for all the things associated with running a home, eg mortgage, house insurance, life insurance, bills etc.

Do you run a car? These can be very draining when you take into account depreciation, tax, insurance, fuel, servicing and finance. A lot of cars have done very little mileage over the last 18 months, but the costs still have to be paid for. Switching to a bike or public transport are very tax efficient and could save €'000s.

Logging and categorising purchases is a good idea and many people have suggested it. It allows you to see where your money goes and that helps identify how you may be able to achieve savings.

Remember, saving is really just deferred gratification. You stop yourself acquiring something now in order to give yourself the opportunity to acquire something that will give you more pleasure in the future. You may or may not know what that something is yet. If you can get into that savings habit without having to know what that something is, you give yourself a longer lead-in time.

If you already have a workplace pension, try and find out what it's currently worth and give yourself a pat on the back that you have managed to save this already for your future. If you haven't, this is a very tax-efficient savings vehicle that will give your older self more options the earlier you start.

Fighting Tao

Open a credit union account in a town quite far from you. Set up a direct debit into it. Do not get set up for a debit card, or internet banking with them. Then if you are thinking of dipping into the savings you'll have a long drive to get money and time to assess if you really need to spend that 20 euro.

brownbinman

Eoin McGee has a good financial planning book, sounds like it would be ideal for you

billo516

Give your parents extra money each payday and they will save it for you.

heretothere

https://www.boards.ie/discussion/comment/117914144#Comment_117914144

I'm all for CU accounts, but you can't set up one anywhere apart from your own local branch. Set up a direct debit and once it is out of your account it is gone and is not to be touched.

Good advice on here. I would really look at your "small" day to day spending. You'd be really shocked at how much a coffee and a bought lunch add up to over the year. Not saying don't have these things but maybe once a week. I've worked with people that bought 3 coffees per day and spent about €8/10 per day on lunch, one lad usually bought breakfast in the deli next door too. I was saving for my wedding so used to only have lunch out once max per week and bought my own cafetiere so I still had nice coffee. Might look a bit "stingy" but sure hey!

mohawk

I treat my savings like another bill every month. It goes out via direct debit. Once you can start seeing your savings balance going up then it gives a sense of security and because it took time to get there your thinking towards money can completely change.

Creamy Goodness

1. Treat savings as a bill, has to be paid no matter what and find the amount you can afford to miss. Have it go out the second you get paid or better yet if your employer can split your pay between accounts do this.
2. Start small, 50% of a wage is huge chunk to be fair. Walk before you run.
3. Set up all your bills to come out as close to after you get paid as possible.
4. Keep a diary for a few weeks, and categorise all spend as "essential" vs "non-essential", tot up the essentials and figure out roughly what a normal week looks like for you. if that's say €200, take that €200 out in cash and spend it for all purchases don't tap your card. it's too easy to get lost.
5. Learn the difference between a "need" and a "want" and apply it to all purchases. A new dress/jeans - want, new tyres for the car - need.
6. Avoid online shopping, especially if you're having a few alcoholic drinks; leave the clothes/gadgets/etc. in the basket for 72 hours and if you come back after that then it's more of a need than a want.

There's a lot of good tips up above too, but I suspect you still really need to find where the drain is in your finances. People often say ah the takeaway coffees add up and they do but if it's something you enjoy, only you can sacrifice something else. There's no point living like a pauper either, especially when you're renting at home. You're in a privileged position to be able to still live at home when you compare to other professionals at your age that will have 50% gone in rent.

Edit: Also, this will be a tough one to hear, but you need to have the finances talk with your OH, nothing breaks up a couple faster than finances. Be open, clear and honest with them otherwise it will end in disaster.

Wabbit Ears

From my own experience having unequal disposable incomes and not resolving that can be a huge barrier.

Many people confuse equity and equality and expect things to be split 50/50 when this significantly affects one person more than the other.

Sheep Shagger

I used to waste a lot of money on crap I thought I wanted.

Now for any non food items likes clothing, gadgets etc when I see something. Wait 30 days and if I still want it then, then buy it. In the vast majority of times I never went back and bought it.

1874

https://www.boards.ie/discussion/comment/117914205#Comment_117914205

No, that is a terrible idea, they are an adult, they need to get into the habit themself, most if not all of the advice is good, except yours (no offence), if they give the money away, then essentially that is a gift (I'm not saying it will happen, but there was a thread not so long ago about a person doing that for 20 odd years, turns out the saved money is being inherited by the posters siblings after the parent passed away). Anyway, longterm, that is just a poor idea, they need to get stuck into an adult way of dealing with it, themself, not have their parents sort them out. Id say starting a good savings habit early in your 20's if possible or as soon as possible is the best thing, when I only had 10 or 20 to save, I did so, as another poster mentioned, it all adds up, and little and often does add up. Really, it sounds to me like they have no plan nor ever had, dipping into savings is something Ive come across with a person I know, they have no real plan, and when they run out/spend everything else, they dip into savings.

As people said 20% (imo at least), see what current spending is on, some people absolutely insist on expensive coffee and sandwiches all week, when they could do cheaper and near as good themself, just requires minor planning. Honestly imo, its very easy to run down your balance just tapping rather than seeing real money, but especially on constant small value outgoings. Personally, I'd suggest (much as others have done) see what your costs are and what you are spending on now, isolate whats essential and what is not. Set yourself a reasonable saving amount (neither be too harsh on yourself nor to easy), it will really depend on your outgoings OP (500/month is nothing, depending on your earnings, but that is very light outgoing costs).

You realise it is something you need to do, work up some kind of a plan, it appears your partner is better at this, so (unless you dont want to reveal the state of your finances) you could ask them for input or query what percents they save to, maybe they have similar light outgoing costs too?

If you know your essential outgoing costs (rent/food/utilities/mobile?, maybe car related too?) then see whats left over, personally Id set yourself aside an amount per week to live on, maybe transferring it weekly to a revolut (but that shouldnt be necessary and may even cause someone poor at spending/saving to lose track of spending), but after initial costs are set aside, save immediately, if paid monthly do it at once by SO to a savings account with at least 7 days notice & even open a Credit Union account too. Whatever your pay frequnecy is, do it as soon as possible after that. I will say, there is no point in saving at paltry interest rates if you have any debts at higher rates, ie credit cards etc (although I wouldnt concern yourself with savings rates until you get some kind of pot built up).

If that were the case, Id split planned savings between paying down debts and still save something, and then manage, reduce, minimise or eliminate debt spending, ie credit card or overdraft. If any debt is significant in amount or rate Id suggest arranging a Credit Union loan to pay off, (possible with credit cards but may be penalties with personal loans).

Another poster suggested getting rid of a car, bad idea imo, transport isnt comprehensive and a car can be essential and nearly as cheap (if not cheaper) than public transport, but depends on usage. While you can SORN a car off the road for tax, you cant do anything like that with Insurance, and if you let insurance lapse for 2 years any No Claims Bonus can expire and it would cost you a fortune to re-insure after 2 years, negating any savings. You dont mention car, but it may be viable to test for a year, but keeping in mind, you still need to start and run a car (which if not insured or taxed wont be able to be driven on the road), even idling the engine isnt great imo, but better than not starting it every week or ten days.

At least you are thinking about it now, some people dont and they spend through to their 40's imo