Saving, how much

LegacyUser

My partner and I are thinking of buying a property in the near future and having a heated debate on how much we should be setting aside each month.

I've been working for the last 5 to 6 years with roughly 2 of those on a reasonable salary. She's been working a few years longer. I'm generally good with money, I've no debts, a little savings and spend most of it on things other than alcohol. She's not to different in spending habits but is absolutely savage at saving.

On what I believe is an average enough salary, after paying Dublin rent (which to be honest were fortunate seems to be less than most), bills, etc what would male for a recent contribution towards a deposit?

dudara

I suppose the most ideal answer is that your contribution to the deposit would be in line with your salaries. If you both earn roughly equal salaries, then 50-50 each. If one of you earns substantially more, then they’d probably be able to save more & hence contribute more.

There’s no rule of thumb though, as some people are better at saving than others. Some people will have saved their whole life, and others won’t.

Are you asking this question because you have little savings and she has more?

mirrorwall14

When the serious saving started we pooled our finances and maxed the joint savings we could do together. It was the first time we got a joint bank account

woodchuck

I don't think there is any set number that people here can give you. It depends entirely on your own circumstances (e.g. salary and rent).

If she's working longer than you, then it makes sense that she'd have more savings and be able to contribute more. If she's currently earning more money than you, she should also be able to save more money each month than you atm. In an ideal world you'd probably be earning equal amounts and be able to make an equal contribution to the mortgage, but that's not the world we live in.

It might help to track your outgoings for a month or two to see where your money is going and where you can trim the fat. Nobody wants to live like a hermit, but obviously sacrifices are going to have to be made if you're saving for a deposit.

GingerLily

We pool 70% of our salarys together to cover joint expenses including bills, mortgage /rent, savings, medical, wedding gifts etc. It means that everyone is left with a nice amount of discretionary spending money.

It works for us anyway

whiskeyman

It's not about how much here.
You mentioned she's 'savage' at saving and you aren't.
She most likely resents this and it's a reason for your rows.
When saving like this, you both need to be on the same level if possible.
There are exceptions of course, depending on individual circumstances, but communication and a plan needs to be agreed.

pwurple

The guidance for 'steady state' spending is 50/30/20.
50% bills, 30% discretionary, 20% savings. This is when you're not saving for anything in particular, just rainy day fund.

If you are saving for something, swap your ratios. So, 30% saving and 20% fun.

Even better if you can take a decent chunk out of your bills (drop a car for example, or reduce rent or childcare) and put that to savings.

antix80

You will need 10% of the purchase price of the house, plus legal/surveyor fees and some money to finish the gaff like furniture, carpets, paint, etc. For arguments sake, let's say €50k. That's €25k each. Something tells me she has that saved already or at least she's close, and now wants you to scrimp and save so you can pay your share.

On the other hand, you've just started earning decent money and probably want to have a nice lifestyle which won't be possible if you're saving every penny. So it sounds like an issue of priorities. How soon do you want that house?

LegacyUser

dudara wrote: »

I suppose the most ideal answer is that your contribution to the deposit would be in line with your salaries. If you both earn roughly equal salaries, then 50-50 each. If one of you earns substantially more, then they’d probably be able to save more & hence contribute more.

There’s no rule of thumb though, as some people are better at saving than others. Some people will have saved their whole life, and others won’t.

Are you asking this question because you have little savings and she has more?

We're roughly on par salary wise. She's just more capable of saving a larger sum of her income than I am. Over the previous few months she's saved a larger amount than I have. It's possible I could squeeze a little more out of myself but that leaves very little for other things.

mirrorwall14 wrote: »

When the serious saving started we pooled our finances and maxed the joint savings we could do together. It was the first time we got a joint bank account

We already have a joint account but it's prominently for paying bills, groceries etc rather than the constant IOU's

Did you work on a percentage you some to save monthly? (I see someone else mention this also)

woodchuck wrote: »

I don't think there is any set number that people here can give you. It depends entirely on your own circumstances (e.g. salary and rent).

If she's working longer than you, then it makes sense that she'd have more savings and be able to contribute more. If she's currently earning more money than you, she should also be able to save more money each month than you atm. In an ideal world you'd probably be earning equal amounts and be able to make an equal contribution to the mortgage, but that's not the world we live in.

It might help to track your outgoings for a month or two to see where your money is going and where you can trim the fat. Nobody wants to live like a hermit, but obviously sacrifices are going to have to be made if you're saving for a deposit.

I used to track my spending but stopped add it became tedious entering things manually, I have thought about restarting to see where I can get better.

GingerLily wrote: »

We pool 70% of our salarys together to cover joint expenses including bills, mortgage /rent, savings, medical, wedding gifts etc. It means that everyone is left with a nice amount of discretionary spending money.

It works for us anyway

How did you land at this figure? The more I think about it the more this would make sense

whiskeyman wrote: »

It's not about how much here.
You mentioned she's 'savage' at saving and you aren't.
She most likely resents this and it's a reason for your rows.
When saving like this, you both need to be on the same level if possible.
There are exceptions of course, depending on individual circumstances, but communication and a plan needs to be agreed.

I'm not saying I'm terrible or anything, we have a kitty for holiday we equally contribute to. I'm probably around the 20% figure as my minimum savings on a monthly basis, from time to time I might add an additional 100+ depending on my balance come payday. While I would estimate she quite possibly saves double what I do.

I think it's a fair point about the resentment, I'm trying to see what's reasonably do able based on offers experience.

pwurple wrote: »

The guidance for 'steady state' spending is 50/30/20.
50% bills, 30% discretionary, 20% savings. This is when you're not saving for anything in particular, just rainy day fund.

If you are saving for something, swap your ratios. So, 30% saving and 20% fun.

Even better if you can take a decent chunk out of your bills (drop a car for example, or reduce rent or childcare) and put that to savings.

This is good and worth exploring, thank you. I think the ratio I'm at is close enough to the former, maybe I can up it a notch!

antix80 wrote: »

You will need 10% of the purchase price of the house, plus legal/surveyor fees and some money to finish the gaff like furniture, carpets, paint, etc. For arguments sake, let's say €50k. That's €25k each. Something tells me she has that saved already or at least she's close, and now wants you to scrimp and save so you can pay your share.

On the other hand, you've just started earning decent money and probably want to have a nice lifestyle which won't be possible if you're saving every penny. So it sounds like an issue of priorities. How soon do you want that house?

We've been saving for close to a year at this stage, I'm a little further if than she is but that's a fair point I hadn't coincidered.

There's an element of truth in your last paragraph, I haven't had the easiest time with regards to having money to save or enjoy (yay recession). Where as now I'm in a good position it can be difficult to push my savings more. As mentioned I do put away a minimum of about 20% of my salary each month, additional to this we both put money towards a kitty for holidays and joint account for expenses, bills tent etc, there isn't always much surplus at the end

Lex Luthor

I also try to stick to the 50/30/20 ratio
50% needs
30% wants
20% savings/pension

Right now my 50% needs are up at about 53 because my eldest is in 3rd level but I usually manage it very well and review it every year

mirrorwall14

To expand on mine when saving for the deposit. We put the whole of both salaries into one account then budgeted right down to our coffees and savings for unavoidable events (Christmas, birthdays etc). Gave ourselves a small equal monthly amount (which we forfeited entirely for the month or two before we bought) and saved everything else. The budgeting got better and the savings better as we got used to the set up. And now three years after we bought we continue to use the same set up and it has allowed us to over pay the mortgage and cover some unpaid leave for our second baby. Two in childcare though will remove almost all of our rainy day savings (all the standard necessary savings will continue Christmas, birthdays etc). We try not to touch the rainy day savings at all generally

Honestly having everything pooled puts a real brake on any ‘crazy’ purchases or unnecessary stuff while our own personal allowances allow us to be silly but without affecting the household. Like I’ve lost 2.5 stone so a whole new wardrobe has been needed but I had been putting aside some of my allowance for a while so was able to blow 300e on new clothes without impacting the house. Now if I lose the other 2.5 stone and need another wardrobe I’ll probably need help from the main budget but that will be ok

katie275

When me and my partner were saving, I was able to contribute more to savings as I earn more. He cut back on luxury items e.g. takeaway coffees, cut down on going out for drinks with friends etc. No-one should be expected to save every penny, you have to live a little aswell but if you are careful with how you spend and save as much as you can I think that's pretty fair.

silent_spark

If you’re on par salary wise and your partner is not too different in her spending habits how is she absolutely savage at saving, and you’re not? If she’s cutting back on more discretionary spending than you are to further your savings goals, then that’s not a fair way to progress - either you need to up your game to her level, or you need to agree to a lower monthly savings amount where both of you contribute equally. Anything else is bound to end in resentment, and could follow you for the duration of living in the new house - ie, if one of you has sacrificed and paid for a higher share of the house, despite you both earning relatively the same salary. If you were on different salaries, it would be a different scenario, but in my opinion, equal salaries should mean equal monthly savings.

dudara

Agreed, if you’re both on equal salaries, why is she able to save more than you?

LegacyUser

I need to sit down and workout this 50/30/20 as I see some of you include pension and some other things. I'm already at 20% (roughly) for what I save, I don't think the remainder is being allocated very well.

With regards to salaries, there's about a 300e difference give or take, that coupled with subsidised canteens, additional bills (motor tax/insurance) on one side and some other expenses means I'm not quite able to stretch to her levels. She's quite minimalist which reflects on her spending habits

Jimmy Bottlehead

BetterSaving wrote: »

I need to sit down and workout this 50/30/20 as I see some of you include pension and some other things. I'm already at 20% (roughly) for what I save, I don't think the remainder is being allocated very well.

With regards to salaries, there's about a 300e difference give or take, that coupled with subsidised canteens, additional bills (motor tax/insurance) on one side and some other expenses means I'm not quite able to stretch to her levels. She's quite minimalist which reflects on her spending habits

I can recommend trying a new budgeting approach, OP. I've always been extremely loose with money, never managed to save, always lived month to month.

I downloaded an app/program called You Need A Budget (YNAB) back in March and its absolutely turned my life around (and my girlfriend's, too).

If you want any info, drop me a PM, but it definitely makes it easier to see where you can make financial improvements.

Lux23

We save two fifths of our income, we have to dip in and out of it every so often but we have a sold deposit now.

ILoveYourVibes

Poorsoul wrote: »

My partner and I are thinking of buying a property in the near future and having a heated debate on how much we should be setting aside each month.

I've been working for the last 5 to 6 years with roughly 2 of those on a reasonable salary. She's been working a few years longer. I'm generally good with money, I've no debts, a little savings and spend most of it on things other than alcohol. She's not to different in spending habits but is absolutely savage at saving.

On what I believe is an average enough salary, after paying Dublin rent (which to be honest were fortunate seems to be less than most), bills, etc what would male for a recent contribution towards a deposit?

This isn't the way you should be looking at it at all.

Where are you buying ? What is the average price of a house where you need to live?

To buy a house over 220k you need at least 20% of a deposit. Most houses in Dublin are twice that threshold. If you are buying rural it might be 10% if you find a place under 220k.

In Dublin the average deposit required in the South is 56k. Its 29 k in west Dub and the north side.

So then the question becomes when you want to buy. If you want to buy in three to five years in Dublin you need to be putting by maybe 10 k per year for three years. Or perhaps 5k per year for six years. That would leave you with about a 30K deposit.

10k a year means about 800 a month between you. (so 400 each) You would actually end up with a bit more. But doing that for 3 - 5 yrs would leave you with enough for a deposit.

So ideally both of you should be putting 100 euro per week into savings and not miss a week for 3 to 5 yrs. And if you let it gain interest etc it will be a bit more.

I have no idea of what percentage of your income that is. But if one of you earns less or more etc. Maybe they could make up a bit for the other one.

Set it up as direct debit OP both of you etc. 100 euro per week each. In three yrs you will be house hunting in west dublin in 5 in dublin south.

ted1

whiskeyman wrote: »

It's not about how much here.
You mentioned she's 'savage' at saving and you aren't.
She most likely resents this and it's a reason for your rows.
When saving like this, you both need to be on the same level if possible.
There are exceptions of course, depending on individual circumstances, but communication and a plan needs to be agreed.

She might be savage at saving as he pays for two....

ILoveYourVibes

antix80 wrote: »

You will need 10% of the purchase price of the house, plus legal/surveyor fees and some money to finish the gaff like furniture, carpets, paint, etc. For arguments sake, let's say €50k. That's €25k each. Something tells me she has that saved already or at least she's close, and now wants you to scrimp and save so you can pay your share.

On the other hand, you've just started earning decent money and probably want to have a nice lifestyle which won't be possible if you're saving every penny. So it sounds like an issue of priorities. How soon do you want that house?

That isn't the case anymore. A house over 220k you need 20% under new rules from the central bank. And its hard to find a house under that in Dublin.

If you were prepared to live outside dublin maybe.

You do have to add in surveyor fees and legal fees etc. There are not set prices for legal fees they vary wildly. From between 1k to 5k. And it does depend on the price of your house largely which seems unfair because its the same work etc. Most solicitors charge a percentage fee. You might be able to find one who doesn't though partic if they are not busy so it can be worth waiting.

A type 2 surveyor report is typically 500 - 1000

There will be other charges etc.

It's best to put between 5k to 10k away.

As regards carpets etc. I know lots of people have bought a house with zero furniture just the basics from family etc. And saved up for a year living in the house.

ILoveYourVibes

ted1 wrote: »

She might be savage at saving as he pays for two....

Possible I don't like to comment.

But as I always say the solution is to stop going out at all they should be anyway.

jon1981

I earn more than herself so basically we agreed an amount we'd both be happy to have as disposable income monthly. It means i end up putting in far more than herself. Basically savings are 70% my contribution but we have the same money as our own when all savings and bills are accounted for.

The way i see it, it's not going to be a healthy relationship if i have far more money than she does and vice versa. That said we're married 3 years and together 10 in total...but we did start this saving split strategy 6 yrs ago and we both have a similar attitude to money, we value it. Also it builds alot of trust into the relationship.

DelBoy Trotter

ILoveYourVibes wrote: »

This isn't the way you should be looking at it at all.

Where are you buying ? What is the average price of a house where you need to live?

To buy a house over 220k you need at least 20% of a deposit. Most houses in Dublin are twice that threshold. If you are buying rural it might be 10% if you find a place under 220k.

In Dublin the average deposit required in the South is 56k. Its 29 k in west Dub and the north side.

OP the above information is totally incorrect. First time buyers only have to pay 10% deposit, regardless of the price. And obviously, they can put more to it if they like, but the minimum is 10%. If you’re not first time buyers, then it’s 20% of the purchase price as a deposit

ILoveYourVibes

DelBoy Trotter wrote: »

OP the above information is totally incorrect. First time buyers only have to pay 10% deposit, regardless of the price. And obviously, they can put more to it if they like, but the minimum is 10%. If you’re not first time buyers, then it’s 20% of the purchase price as a deposit

First time buyers yes I think so.
I would want to make my deposit at least 50% of the total asking price anyway. But that's just me.

But you can say this is bs if you like. A lot of the reason people are NOT getting mortgages is they expect to get one while only offering the minimum 10% on a deposit as first time buyers..

And I never mentioned first time buyers though.