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Savings so low Watch

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    (Original post by Ekans)
    Well where would people store it?
    It depends on how much you've got. But generally,

    A few grand in instant access savings, a few in longer term savings accounts (where there is a penalty for short notice withdrawal), fixed term savings, shares etc.

    Personally apart from my house and car (PCP) I have a lot more in savings/shares than debt, but because of potential penalties for early withdrawal I use interest free or low interest credit to tide me over if there's any unforeseen issues as I only keep a couple of hundred on my current account if that.
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    (Original post by virgil1)
    It depends on how much you've got. But generally,

    A few grand in instant access savings, a few in longer term savings accounts (where there is a penalty for short notice withdrawal), fixed term savings, shares etc.

    Personally apart from my house and car (PCP) I have a lot more in savings/shares than debt, but because of potential penalties for early withdrawal I use interest free or low interest credit to tide me over if there's any unforeseen issues as I only keep a couple of hundred on my current account if that.

    Ah alright. The report says that the median is £500 in all savings. Let's get back to the topic.

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    Explanations anyone???
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    (Original post by Ekans)
    Well where would people store it?
    In a savings/ISA or any investment vehicle ?

    I don't keep any more than 10% of my wealth in cash. Neither do I need any more than that for everyday life.
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    (Original post by NX172)
    In a savings/ISA or any investment vehicle ?

    I don't keep any more than 10% of my wealth in cash. Neither do I need any more than that for everyday life.
    Ah, but the survey shows that their savings, wherever they have kept it, has a median around £500. I still can't figure out why if is so low on average. I mean I knew some people would have that much.
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    (Original post by Ekans)
    Ah, but the survey shows that their savings, wherever they have kept it, has a median around £500. I still can't figure out why if is so low on average. I mean I knew some people would have that much.
    Well a lot of people can barely scrape by. Before I got a professional job I had a couple of thousand in CC debt and no savings at all.

    I was earning over minimum wage by a quid maybe, but the cost of renting (with no hope of ever buying) was killing us as well as having to drive miles to get to work after I was transferred out of my old store.

    I had no free cash by the end of the month and was constantly robbing peter to pay Paul.

    It's easy to forget but savings were but a distanct dream let alone a holiday or new car. The irony is that now I own my own house I'm paying less in mortgage for a 3 bedroom house that I'll own in 18 years than I was renting a 2 bed flat.
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    (Original post by virgil1)
    Well a lot of people can barely scrape by. Before I got a professional job I had a couple of thousand in CC debt and no savings at all.

    I was earning over minimum wage by a quid maybe, but the cost of renting (with no hope of ever buying) was killing us as well as having to drive miles to get to work after I was transferred out of my old store.

    I had no free cash by the end of the month and was constantly robbing peter to pay Paul.

    It's easy to forget but savings were but a distanct dream let alone a holiday or new car. The irony is that now I own my own house I'm paying less in mortgage for a 3 bedroom house that I'll own in 18 years than I was renting a 2 bed flat.
    What did they do about the debt? Did you have to pay that back?
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    (Original post by Ekans)
    Ah, but the survey shows that their savings, wherever they have kept it, has a median around £500. I still can't figure out why if is so low on average. I mean I knew some people would have that much.
    It'll depend on their circumstances. A lot of things affect how much you can afford to put away.

    I'm not the same age as a lot commenting in here but I do have more savings than the average you mention although I do know a lot who are in the average.
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    (Original post by Ekans)
    What did they do about the debt? Did you have to pay that back?
    Yup, once I got a bank loan to pay them off but they built up again, eventually I paid it off with salary.

    Thankfully I was always able to "service" my debts and pay the minimum or a bit more than minimum so have ended up with a decent credit history, but I was always one disaster from big issues, an unexpected car bill (again because I've got more money and have a new car I've got a warranty - nice to have more money...) for example would send my finances into a spin for months.

    Granted I wasn't brilliant with money (still aren't - just earn a lot more so can afford to be a bit lax and still save) but I know people who were in much worse situations on zero hour contracts etc.

    I can easily understand people on low wages, especially if they never quite know what they're going to get every month building up debt and therefore not having any savings at all. Poor credit makes it worse as you can't just stick something on a credit card for a month or two, and you end up being forced down the lines of prepay energy which can cost more.
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    Some people don't earn enough to live on, let alone save money. Everyone is in different situations, it's not as easy to put aside money when you have bills to pay. As a young person who's clued up on these things, it's easy to wonder why people get into so much debt - but life happens and **** goes downhill.

    My family have assets (land in other countries) but very little cash money. This is because my dad screwed my mum over, taking everything and spending all the money he got from selling houses etc. Left my mum with nothing and disappeared, never to be heard from again. My mum was earning the money, he was leeching off of her - now he's screwed her over and she's ended up in about £10k worth of debt because it was just a spiral downhill. That's an example of having your finances together and then life happening.

    As for idiots who just overspend because they have a new fancy credit card - they deserve to be in debt.
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    I literally have £2 in my ISA at the minute. Reason? Zero hour contracts dialing my working hours up and down as they please, which forces me to use my credit card and I have to pay off more in the end with interest and penalties. I just took a proper contracted hours job a couple of weeks ago, so hopefully that will change in the very near future.
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    (Original post by NX172)
    You've only just started working. The cost of living will eventually go up for a myriad of reasons as you go.

    If you're referring to savings as cash in the bank for a rainy day. I barely have a few grand available. I think for myself and many others with good credit and responsible usage, the ease of access to credit kind of gives some extra headroom should we ever be in trouble. At least to last us until the problem has been sorted out.
    Moreover, I'd only keep at most, 10% of my worth in cash. Any uninvested cash provides no returns and is at the mercy of inflation. Therefore I keep my ISA maxed out, equity locked into property and a few index funds for steady growth.

    As for people not investing their money, it's simple. They spend more than they earn or too close to that point.

    I consider myself quite a heavy spender. In the past 3 months I have spent £600 on new phone, £4000 engagement ring, £4000 on holidays, £75/mo on cable, £300/mo on vehicle upkeep, £100 a week on fuel, £700 monitor for PC, £1000 in gifts, £500 on vehicle tax, £700 vehicle warranty, £210 new tyre, £2500 private license plate, £18000 paying back debts and an absurd amount on a new car. Oh and I regularly eat out and rarely stay in to cook. There's many more things but that's what I can think off the top of my head. A lot of those purchases are occasional, such as holiday (haven't had one in 2 years), replacing a 2year old phone, new car purchase and of course, engagement.

    That seems like a nuts expenditure.


    (Original post by JJTwentyOne)
    Can I ask where you work and your experience as a software dev to be earning this ? Genuinely curious as a junior developer earning a pretty competitive salary outside of London.



    I would love to be clearing 7k / month that is a handy sum, close to 100k per year. Clearly I am in the wrong industry.
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    (Original post by ebam_uk)
    Clearly I am in the wrong industry.
    Generally as long as you're in the top percentile of whatever you do, I don't see why it can't be possible.
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    (Original post by NX172)
    Generally as long as you're in the top percentile of whatever you do, I don't see why it can't be possible.
    Hmmm, How can I get to the top quartile of my industry
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    (Original post by ebam_uk)
    Hmmm, How can I get to the top quartile of my industry
    Have you not watched Pokemon?

    "...I wanna be the very best
    Like no one ever was..."

    But really. Just be at the top of your game. Be the industry expert with the creds to back it up.
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    I would imagine the majority of people live paycheck to paycheck and barely cover their living expenses nevermind have the luxury to save. Also, as someone said above life is unexpected and can throw up all sorts of situations where you having to shell out on things you were not expecting too, thus making it harder to save and easier to get into debt.
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    The simple answer to OP's questions are twofold..

    1) Those earning less than about a grand genuinely don't have enough disposable income to build significant savings. I know that i used to shell out ~£700 on rent, bills, transport, food ect.. back when i was earning that.

    2) While peoples needs only extend to around a grand a month, people's wants are essentially infinite. In a consumer society where people rarely make the long term financial decision (look at all the people who have an Iphone contract instead of purchasing outright) and wish to satiate their desires with expensive habits, the money saved does not radically alter. Culture in effect.
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    Lifestyle creep. As soon as people have more money to spend/ play with they generally spend more instead of being smart about it.

    I have very little sympathy for the "keeping up with the Joneses" nonsense. If you are constantly spending all your money, unless you're living on the bread line...you're being a bit of an idiot. It's like people who were getting by just fine on 17k, then get a promotion to 25k and all of a sudden they don't know where their money has gone or why they are living pay check to paycheck even though they have more money. It's because they started to spend spend spend. Just because you have money does not mean you HAVE to spend it. I see it so much, drives me up with wall.

    My friend was looking for a job and constantly worrying about paying rent and bills, she has a job now (good for her) but now because she "has money" she's constantly buying new crap she never even uses. In the past week she's bought an £80 pair of shoes she'll wear once or twice, gone out to dinner twice and bought a new designer dress. Like ffs love you only work part time and you're still complaining you're worried about money. Why are you being such a moron? Smh.

    There are obviously instances where increase in outgoing is unavoidable, such as if you have just started a family or you have to commute to work and it costs a lot. And of course like I said there are people who simply don't earn enough to be able to save much of anything. But half the time, from what I can tell. People are just being stupid and shortsighted with their money.
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    (Original post by Ekans)
    I just read that the median UK savings in someones bank account is like £500. What have people been doing with the money?

    I mean I keep rent, bills, food to a minimum cost and I don't spend much on leisure and I've managed to save a good few grand in 6 months of working.

    I don't go on holiday, I don't smoke or drink much etc.
    Do you have children at all? Or caring responsibilities/costs for elderly parents? Do you pay into a private pension at all?

    Maybe your spending isn't representative yet - you're only six months into full-time working, after all.
 
 
 
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