No savings at 42

Minime2.5

I've been really down about my financial situation in recent months. At 42 I have absolutely nothing to my name . No savings no house and that's despite having a permanent stable well paying job . I'm a single man with no dependents so I have no excuses really . I've just been a complete and utter idiot with my money down through the years . I've done some travelling which would have had an expense but that's no excuse for having nothing. I've basically just treated my salary like my pocket money and live from pay cheque to pay cheque without a plan. I'm not sure why I've posted here . There is nothing I can do about the past . Just some words of advice and insight. I'll be 50 in 8 years time which terrifies me being in the same predicament

Passenger

I would suggest you try to live by the 50/30/20 rule as I find it a great way to manage finances. If you stick to it you'll be surprised just how quickly you will accumulate savings.

Also, the Revolut app is a great way to identify where exactly you're spending your money and what you're spending it on. Once you can see where your money is going you can start to change your spending habits.

Harika

While far behind the curve for savings, you still can expect to live 40 years and work 25, so loads of time to turn your financial situation around.
Seek financial advice, there are tools online available to analyse your spending, define your goals and work towards them.

LegacyUser

Can't up the 20/30/50 system enough. Like yourself OP I had zero savings only a couple of years ago and I'm the same age as you. I tired saving through several other methods and always ended up spending the small amounts I'd saved. I started doing the 20/30/50 system and within a year I had a health savings sum and I hadn't felt my life style had changed or found myself short of money. The key is you have to put the amount to save away straight away when you get paid. Set it up as a standing order so that money is out of your account and into a savings account. Have a chat to your bank on what savings account options they have etc but the important thing is you start saving that 20% amount every month.

I have my bills money and my personal money for the month then any money left from either of these pots at the end of the month go into a different savings account for trips or big item buys so I don't go trying to dip into my main savings. If I have no money left from those two pots at the end of the month I start looking at where I'm spending money and cutting waste.

SusanC10

Start a Spending Diary. Doesn't need to be fancy. But track your spending for a month starting on Pay Day. You will see very quickly where your money is going and where to cut back. Especially now during the Pandemic.
Open a dedicated Savings Account. Don't leave all your money in your Current Account.

During the last Recession, I lost my job and my Husband had more than 1 pay cut. Result was our household income was reduced by more than 60% in a short period of time.
We had no choice but to cut expenditure. It really showed how much money we had been wasting.

As others have said you have time to turn this around if you start now.

Neames

Passenger wrote: »

I would suggest you try to live by the 50/30/20 rule as I find it a great way to manage finances. If you stick to it you'll be surprised just how quickly you will accumulate savings.

Also, the Revolut app is a great way to identify where exactly you're spending your money and what you're spending it on. Once you can see where your money is going you can start to change your spending habits.

I'll second the 50/30/20 approach. So simple and not at all extreme unlike the approach proposed by say the FIRE movement where extreme thrift seems to be adopted as a lifestyle.

I also use Revolut for all my discretionary spending. Also there's a very good feature called a Vault where you can add spare change to a saving fund.

There's not much interest being paid by banks so maybe look at buying 10 year state saving bonds so when you turn 52 you're going to get a decent return if you start saving now.

You haven't been an idiot with your money - you've been living your life. You've no one to answer to.

You've gotten this far in life, so it's not like you've no idea how to survive on what you're making. But you did come here for advice, so I'll tell you what i would do. My two priorities would be:
a) emergency fund; and
b) pension.

You haven't specified about the pension; hopefully you have something in place, but if not, now's the time.

As for the emergency fund, how much is up to you. Whatever's manageable. Create a separate deposit account with whichever bank you're with. Something flexible with little to no interest on it (you wont be making much interest anyway so you might as well go for a flexible account while you're figuring out what saving style suits you best).

Ultimately, saving isn't about 'having something to your name'. It's about being prepared for emergencies and being able to long-term afford big ticket items. So really, saving is only ever for the purpose of eventually spending. You're not going to take it with you. What you've spent up til now has enhanced your life, it wasn't wasted.

araic88

You might surprise yourself with how much satisfaction you can get from budgeting a bit and getting on top of this.
It could be a lot worse, you haven't mentioned being in huge debt, which a lot of people are.
Set yourself some short term goals, and stick to them. They don't have to be huge, if they're realistic it'll be easier to reach them.
I also find it helps to "pay yourself first" and to put away savings first, or have it taken directly from source, before you have a chance to spend it. If you wait til the end of the month and save what's left.. there's rarely much left!

sparksfly

Stop worrying. You have your health and your job. You are still young. I have a simple system of managing my finances that looks after my committments, discretionary spending and savings.
I calculate my monthly net income and the amount I need for my committments at the start of the month. From the balance I decide how to split it between spending and savings. This all takes ten minutes. I stick as much as possible to the plan without letting it distract me too much in enjoying life. I also started a pension plan.
I have gone from zero savings (due mostly to kids college expenses) to approx 60k in ten years although I did have a mortgage which I have now repaid. I'm 58.
You have plenty of time and don't regret enjoying your life while you were young.

Tork

I'm another fan of the 50/30/20 rule. What you could try, as a way to curb your discretionary spending, is to get a Revolut or N26 card. Then transfer a realistic amount of money onto that every week. As much as possible, try to use that card for your online/offline shopping rather than your usual one. Having to think twice about what you're buying could help here.

Tork

The way things are going, none of us will be retiring at 65. OP, start small and try that 50, 30, 20 thing. There's no point in living on cornflakes and beans

wildwillow

The only worry I would have is lack of security in not having a house, but that's an Irish attitude which is changing. Are you renting, which some people see as dead money?

Do you expect to have dependents in the near future as in children and spouse? If not, there is no need to do anything drastic. Set aside a portion every pay day as advised and be more mindful of where you could cut back spending without much pain.

Savings are earning nothing at the moment so pension contributions which are tax efficient are a good idea.

PCeeeee

wildwillow wrote: »

The only worry I would have is lack of security in not having a house, but that's an Irish attitude which is changing. Are you renting, which some people see as dead money?

Do you expect to have dependents in the near future as in children and spouse? If not, there is no need to do anything drastic. Set aside a portion every pay day as advised and be more mindful of where you could cut back spending without much pain.

Savings are earning nothing at the moment so pension contributions which are tax efficient are a good idea.

I'm not sure how helpful this is to the OP but in defference to them I can't but question the idea that the desire for and indeed outcome of, home ownership is somehow a uniquely 'Irish' idea. Its a very common phenomenon. Certainly more common than not throughout the OCED.

The Mighty Quinn

OP, I am 34. I have no savings. I know the stress of it. I got paid the other day and it looks a nice number, except I keep a spreadsheet to see what my upcoming known monthly outgoings are, and it turns out I've actually got about 180eur to get me through November after mortgage, bills, car tax and insurance etc etc.

I've been quite depressed about this too, as each month it's a similar story. I must add that I've a baby and one on the way so I despair a little about how I'm going to cope when that kicks up a notch. Hoping some other parents might swoop in and tell me it gets easier.

So, I don't know what to add except you're not alone. Hopefully you're not in much debt, best of luck sorting yourself.

I'd echo the pension call. Even if you don't do any other saving, get a pension ball rolling, even for the tax benefit alone, even if your investment grows 0% you'll have more money than if you'd saved it. And your work life seems to able to sustain you into your 40s, plan for when your work life won't exist.

awsah

Passenger wrote: »

I would suggest you try to live by the 50/30/20 rule as I find it a great way to manage finances. If you stick to it you'll be surprised just how quickly you will accumulate savings.

Also, the Revolut app is a great way to identify where exactly you're spending your money and what you're spending it on. Once you can see where your money is going you can start to change your spending habits.

What is the 50/30/20 rule?

fleet

Where does pension fit into the 50 30 20?

If OP is on the marginal (high) rate it'll be easy to start one, but his contributions will need to be 20% of his gross. A12% hit because its tax free going in, between now and 68 in order to keep a similar lifestyle.

Tork

awsah wrote: »

What is the 50/30/20 rule?

You quoted a post which linked to an explanation to it

Tork

fleet wrote: »

Where does pension fit into the 50 30 20?

If OP is on the marginal (high) rate it'll be easy to start one, but his contributions will need to be 20% of his gross. A12% hit because its tax free going in, between now and 68 in order to keep a similar lifestyle.

Maybe it's time for the OP to speak to a financial advisor?

awsah

Tork wrote: »

You quoted a post which linked to an explanation to it

Thanks 😊

Mad_maxx

Minime2.5 wrote: »

I've been really down about my financial situation in recent months. At 42 I have absolutely nothing to my name . No savings no house and that's despite having a permanent stable well paying job . I'm a single man with no dependents so I have no excuses really . I've just been a complete and utter idiot with my money down through the years . I've done some travelling which would have had an expense but that's no excuse for having nothing. I've basically just treated my salary like my pocket money and live from pay cheque to pay cheque without a plan. I'm not sure why I've posted here . There is nothing I can do about the past . Just some words of advice and insight. I'll be 50 in 8 years time which terrifies me being in the same predicament

you have admitted your mistakes , now dont make them anymore , start saving

you will not only get good at it but get to like to and like yourself for doing it

pwurple

You haven't managed to save over the last 6 months of lockdown either, when travel is gone and there is no sport, pubs, entertainment etc?

I'm 42 too, and luckily as I can work from home, was able to make some changes and build savings the last few months. Sold the car. Food, travel and entertainment budget shrank to feck all. Banks are starting to get tetchy about the amount of savings building, so I can't be the only one finding lockdown to be quite low spend


What are you spending on, as there may be a vice here that needs overcoming too... Do you gamble, drink expensive drinks, have a friendly neighborhood prostitute, perhaps a drug habit?

rtron

Try dividing your Pay (minus rent/bills etc) by the days until your next pay cheque. That will let you know how much money you have to spend per day. Then try and minimize how much you spend each day and save any excess.

JustAThought

One of the few good things about the covid lockdown is that it has given me a chance to appreciate all the things I did and enjoyed while the workd was a different place. Don’t look on the negatives OP - try and find the good. You have a permanent job, low required overheads, no commitments and now the desire and the capacity to save. Start a new good habit - do budget and review where you spend. Its often the small repetitive habits where you can quickly make visible savings - Daily newspapers or magazines, take aways every other night, ten quid on the lotto every week - etc. Have a good look at what gou spend and see if you can reduce it down without making life miserable so you can start a habit of saving. i always tried to have my overheads and lifestyle covered, then a monthly DO NOT TOUCH savings for emergency/crisis, and then general monthly savings that I could dip into for a long holiday or car expenses or Christmas or a ski holiday or whatever.

I think honesty is the key - seeing exactly where your money goes presently and how you spend. Then from this you can strip bad habits or wasteful spend out. It should be a lot easier now most places are shut - unless you are only eating and drinking yours which many people do & is a real longterm waste IMO.

There was a thread on this here before with lots of links to budget apps and suggestions - might be worth a scroll. But the basics were the same -
identify outgoings, establish targets and limits,
implement plan!

Ironically at the moment I would not be starting a pension plan - pensions invest in company stocks and with the world in turmoil at the moment nobody knows what industries will thrive or survive - I know I lost a huge amount of my capital during the last major recession - the shares could never recover as the companies folded . At present I’d rather have cash in the bank or savings for a deposit for a house rather than a risky share portfolio in a volatile global recession. I’d save for a house for a few years first - and then prioritise a pension plan after we are somewhat through this covid shennanigans.

The Mighty Quinn

pwurple wrote: »

You haven't managed to save over the last 6 months of lockdown either, when travel is gone and there is no sport, pubs, entertainment etc?

Just to throw it out there, since lockdown, my company implmented a 20% pay cut across the board. So while I'm not receiving PUP payments and I'm working from home full time, my pay is down a considerable amount. It may not be as clear cut as "why haven't you saved more money when you've less to spend it on".

fits

Yes I wouldn't be starting a pension plan until you have the housing sorted first as the pension will tie up your money until retirement. Start saving for a deposit. If you put your mind to it you'll be surprised at how quickly it builds up. Once you have the housing you can look at the pension.

Ive never bothered with a money diary or anything like that - it may suit some people alright but not our household. We pay into savings first. We also avoid debts and own our cars outright. One can save a hell of a lot by avoiding interest if you possibly can (except on the house obviously).

Psychiatric Patrick

Minime2.5 wrote: »

I've been really down about my financial situation in recent months. At 42 I have absolutely nothing to my name . No savings no house and that's despite having a permanent stable well paying job . I'm a single man with no dependents so I have no excuses really . I've just been a complete and utter idiot with my money down through the years . I've done some travelling which would have had an expense but that's no excuse for having nothing. I've basically just treated my salary like my pocket money and live from pay cheque to pay cheque without a plan. I'm not sure why I've posted here . There is nothing I can do about the past . Just some words of advice and insight. I'll be 50 in 8 years time which terrifies me being in the same predicament

Did you enjoy those travels?

I’m pretty much in the same boat but without a stable well paying job.

You had fun and the experience of travels and like others say plenty of time to rectify the financial problem.

Don’t let it get you down.

sashafierce

How realistic is 50% covering all of that? Groceries , bills and rent for a month? Is no one else renting in dublin

Tork

JustAThought wrote: »

.. Its often the small repetitive habits where you can quickly make visible savings - Daily newspapers or magazines, takeaways every other night, ten quid on the lotto every week - etc. Have a good look at what you spend and see if you can reduce it down without making life miserable so you can start a habit of saving.

This is where I started to save quite a bit of money when I took a look at my finances. Most of us pay more attention to our large expenditure: car insurance, a big grocery shop, a fill of oil in the tank to heat the house etc. It's easy to miss how much money you can fritter away without noticing it. Coffees and snacks in the local shop or filling station, rolls from the deli counter, takeaways at night, impulse purchases either in shops or online. All of these add up and I would be surprised if you didn't make significant savings here if you took steps to curb these habits. Even something as simple as planning your meals and having something ready to go into the microwave after work could save you money.

I agree with the others about trying to save for a mortgage if you can. Depending on where you live and what your outgoing are, you can still put your head down, save a deposit and buy something. If you can manage to buy your own place and have it paid off before you retire, you won't have to worry about hefty rental bills afterwards.

PokeHerKing

pwurple wrote: »

You haven't managed to save over the last 6 months of lockdown either, when travel is gone and there is no sport, pubs, entertainment etc?

I'm 42 too, and luckily as I can work from home, was able to make some changes and build savings the last few months. Sold the car. Food, travel and entertainment budget shrank to feck all. Banks are starting to get tetchy about the amount of savings building, so I can't be the only one finding lockdown to be quite low spend


What are you spending on, as there may be a vice here that needs overcoming too... Do you gamble, drink expensive drinks, have a friendly neighborhood prostitute, perhaps a drug habit?

Regardless of wfh and lockdown most people will not be able or want to sell their car. We looked into taking my wife's off the road as the insurance is up for renewal at the end of November but its not really worth it, 3rd party is still required and its only a 100e in the difference and its a new car so tax is peanuts anyway.

Defo saved on petrol etc but our utilities bills feel beefier as we're here 24/7 now and she's constantly freezing!:)

Ellie2008

PokeHerKing wrote: »

Regardless of wfh and lockdown most people will not be able or want to sell their car. We looked into taking my wife's off the road as the insurance is up for renewal at the end of November but its not really worth it, 3rd party is still required and its only a 100e in the difference and its a new car so tax is peanuts anyway.

Defo saved on petrol etc but our utilities bills feel beefier as we're here 24/7 now and she's constantly freezing!:)

Can she not put a jumper on 😉

OP a lot of good advice here, I intend to use some of itself myself!

Don’t waste time beating yourself up. It’s great you’ve come to this realisation now it’s time to turn it around. You lived your life & travelled, it’s great you had some good experiences.

My mother is very good with money, luckily for her she has plenty of it but she doesn’t waste a penny. She likes the finer things in life & treats herself now that she’s older without us to spend her money. Everything is cooked from scratch, I’d say her food waste is very low. She knows where all of the best deals, she loves her Dunnes €10 vouchers. I wish I was more like that, the amount of food I throw out is a joke.

Be sure you have a roof over your head when you retire & enough money to live off. I’d start working towards that goal.

Volthar

You are right, there is nothing you can do about the past but the future is in your hands. I do not know your financial situation and level of income but what I'd do is to start saving. It sounds cliche but it is as simple as that. At the age of 42, I recommend setting aside a minimum of 25% of your income. Say you save €800/month and you will have nearly €77k in 8 years plus interest or profit on investment. Try to cut any unnecessary expenses too, engage in a side hustle to boost your savings even more, and most of all stay disciplined in making savings. Discipline equals Freedom

Good luck.

pwurple

PokeHerKing wrote: »

Regardless of wfh and lockdown most people will not be able or want to sell their car. We looked into taking my wife's off the road as the insurance is up for renewal at the end of November but its not really worth it, 3rd party is still required and its only a 100e in the difference and its a new car so tax is peanuts anyway.

Defo saved on petrol etc but our utilities bills feel beefier as we're here 24/7 now and she's constantly freezing!:)

The OP's spending was stated as being on Travel and I'm assuming going out. They should have seen a dip in those. My main spends are my mortgage and family cars. it was an example, not an instruction. Clearly the OP is a single man with no dependents, so I was not equating the situation.


So, OP, What are you spending on right now?

You can't save until you KNOW what your outgoings are. Otherwise you just end up plastered in debt.

I'm taking a wild stab at what single fellas with a decent income and no savings have spent it on. Gambling & drink are the usual suspects, or a shopping addiction to toys like guitars or flashy watches. If it's those, he might need some assistance coming off them.


Lame cliche alert, but knowledge is power. You can't fix what you don't understand.

Addle

What are you all saving for?
If I can save €100 a month after everything, I’m doing relatively well.
I have a mortgage and a make pension contributions.
I’d say yours is a pretty common situation OP. Now you know how it makes you feel and that you want to do something about it, so so you will.

Xaniaj

Addle wrote: »

What are you all saving for?
If I can save €100 a month after everything, I’m doing relatively well.
I have a mortgage and a make pension contributions.
I’d say yours is a pretty common situation OP. Now you know how it makes you feel and that you want to do something about it, so so you will.

I'm saving for early retirement!

OP, as suggested, I'd got with a spending diary or something similar just to see where exactly your money is going. From there, try and adjust one small thing at a time and up the saving from there.

fits

Addle wrote: »

What are you all saving for?
.

Next car
Improvements to house and garden
College fund.
Rainy day

JustAThought

fits wrote: »

Next car
Improvements to house and garden
College fund.
Rainy day

Peace of mind.
Walk away fund.
Emergency situation
Zero SW support to pay a mortgage if illness/anything goes wrong
Comfort knowing that when the * hits the fam I will have a financial safety net

Now also looking to turn the house heat on & up for the next 5’months and be able to pay the extra 30% without having financial meltdown

holiday home /bolthole overseas perhaps

Jb1989

Yous all must be on great wages. Not everyone has means left over to save

LegacyUser

Jb1989 wrote: »

Yous all must be on great wages. Not everyone has means left over to save

I wasn't on great wages when I started but its the mindset of 'left over to save' that was stopping me. I had debts and wasn't living in the cheapest area but couldn't move and had no money left each month, saving seemed like a luxury I couldn't have but I stated seeing saving the same as other bills, something I needed to start doing or I never would. I started very small but slowly I got out of debt, got better job and was already in the habit of saving so just changed the amount I was saving. It's all context of what you have - if you are struggling saving 10, 50 or 100 euro over a few months might not seem much to some but be a major effort for you and it's a big boost physiologically to hit a target regardless of how big or small it is.

Tork

Yep, putting any sort of money aside every time you're paid is well worth doing if you can. Sometimes setting up a standing order and putting the money into a separate account can help. If you get into the right frame of mind, you won't want to even dip into that account once the money starts to add up.

If you're not on good wages, then, unfortunately, you need to make changes to get a better job. I found myself trapped in a dead-end career path and got sick of the low wages. I identified a different career, upskilled in my own time and then had to put up with low wages and renting a tiny box room until things improved. It was well worth it in the end but wasn't easy at the time. You do what you have to do - better paid jobs are rarely handed to you.

mr_edge_to_you

OP - I would urge you not to panic. The reality for most of us is, that if we're fortunate to have healthy lives and live to our 70s we'll be working well beyond 65. There's plenty of time to fix the situation.

Revolut and the likes will help in the short term with monitoring spending but you do need a long term plan. With that in mind, I would strongly advise that you engage the services of a suitably qualified and experienced financial planner who can help you put a meaningful plan in place. I know many people say that the Irish obsession about owning your own home is dated and old-fashioned thinking and that is changing. That's fair enough, but if you're going down that road, you need to ask yourself, how will you afford that rent in your 70s?

Plenty of time to sort it out.

sashafierce

Meant To Say wrote: »

Op is concerned about having no savings but wants to pre-order a PS5...

My pet peeve on boards is people stalking through posters other threads and using them against them on a different issue.....

Meant To Say

Meant To Say wrote: »

Op is concerned about having no savings but wants to pre-order a PS5...

OP who admits they have no budgeting skills is exposed as having no budgeting skills shocka!

Hannibal_Smith

Mod Note

Folks, as per the Charter, please offer advice to the OP when replying to their thread.

Thanks

HS

OP, I'd recommend downloading a budgeting app for your phone, one that allows you to enter and track your spending. If you're any good with spreadsheets I'd also recommend creating one. Tracking your spending over time will at least give you a picture of where your money is going.

Johnny_BravoIII

Create 'pots' for your money and manage your 'pots':

- Pot 1 - Day-to-day account - wages paid into this account (25% approx)
- Pot 2 - Bills & Loans - Automated transfer amount (weekly/monthly) from pot 1 to pot 2 to meet bills. (25% bills, 10% loan approx)
- Pot 3 - Savings - Long-Term - Inaccessible bank account ( credit union). Automated transfer from Pot 1 to Pot 3 to (weekly/monthly) (20%)
- Pot 4 - Savings - Save-to-Spend - Holidays, luxury items, clothes. Automated transfer from Pot 1 to Pot 4 (20%)

Requires multiple bank accounts but once they are set-up, its all automated and requires no thinking.

Additionally, I transfer €150 from pot 1 to a revolut account weekly. The analytics is quite good.

The idea is that you don't want "penny-pinching" to dominate your life.
You know there is €100 - €200 in your Pot 1 weekly to do with as you please.
Everything else is taken care of. You only have to decisions on Pot 1.
Blow it if you want, but you will go hungry and start making smarter decisions.
"How do I spend my Pot 1 (example €150) this week.

E.g. if you are earning €35,000 per annum. Your take-home should be circa €2,500 per month.
IMO you could save 40% €1,090 per month.
€1,000 per month * 12 months = €12,000 per year * 10 years = €120,000 * 20 years = €240,000
That's a nice nest egg to retire. Remember every Irish citizen is entitled to €13,000 per annum pension payment.
The above invested in a pension fund would be the way to go.

amdublin

Starting from the time when I was on crap wages to now on good wages, and all the times in between I've always found this worked for me: Second I got paid, I transferred what I wanted to save into the savings account. Whether it was 100 euro when I was on cr@p wages, or the 1000 euro now on good wages, I transferred it the second I got paid.

I found if I left it until the end middle or end of the month it was not there to save.

People have mentioned "they have no money left over to save" and I get that...you always spend what is in the account.

Transfer it and pretend it doesn't exist! You will get by with what you have after transferring.

OP (and anyone else), my two cents for what it is worth. Hope it helps

august12

amdublin wrote: »

Starting from the time when I was on crap wages to now on good wages, and all the times in between I've always found this worked for me: Second I got paid, I transferred what I wanted to save into the savings account. Whether it was 100 euro when I was on cr@p wages, or the 1000 euro now on good wages, I transferred it the second I got paid.

I found if I left it until the end middle or end of the month it was not there to save.

People have mentioned "they have no money left over to save" and I get that...you always spend what is in the account.

Transfer it and pretend it doesn't exist! You will get by with what you have after transferring.

OP (and anyone else), my two cents for what it is worth. Hope it helps

Totally agree with this.

bitofabind

amdublin wrote: »

Starting from the time when I was on crap wages to now on good wages, and all the times in between I've always found this worked for me: Second I got paid, I transferred what I wanted to save into the savings account. Whether it was 100 euro when I was on cr@p wages, or the 1000 euro now on good wages, I transferred it the second I got paid.

100%, do this OP. I've been doing this for the past five years or so. 25% of my monthly salary gets transferred into savings as soon as I'm paid, along with bills etc and then I'll live on the remainder.

You'd be surprised at how much of a kick you begin to get out of seeing that number go up and up as the months go by. I hit six figures a few months ago, it's given me a sense of security I'm really grateful for especially for the year that's in it. The trigger in your brain is that your Savings are now a monthly essential "outgoing", rather than "something I'll do if I have anything in my account at the end of the month."

Minime2.5

Thanks for all the replys thus far . I have 2 questions

1. Does the 50 30 20 rule apply regardless of earnings ? Surely a person earning 50k net a year should be saving alot more than a person on minimum wage . Sure 20% of 50k is more but shouldn't the percentage be greater ?

2. How should savings be split between long and short term savings? 50:50

Passenger

Minime2.5 wrote: »

Thanks for all the replys thus far . I have 2 questions

1. Does the 50 30 20 rule apply regardless of earnings ? Surely a person earning 50k net a year should be saving alot more than a person on minimum wage . Sure 20% of 50k is more but shouldn't the percentage be greater ?

The 50, the 30 and the 20 of the 50/30/20 rule are interchangeable. You can swap the percentages around. So you can save 50%, live on 30% and splurge 20%.

The percentages are a general guide so you have a system to manage your finances.

antiskeptic

Minime2.5 wrote: »

I've been really down about my financial situation in recent months. At 42 I have absolutely nothing to my name . No savings no house and that's despite having a permanent stable well paying job . I'm a single man with no dependents so I have no excuses really . I've just been a complete and utter idiot with my money down through the years . I've done some travelling which would have had an expense but that's no excuse for having nothing. I've basically just treated my salary like my pocket money and live from pay cheque to pay cheque without a plan. I'm not sure why I've posted here . There is nothing I can do about the past . Just some words of advice and insight. I'll be 50 in 8 years time which terrifies me being in the same predicament

Did the same up to my late-30's and had the same startled moment. I didn't bother with 20/30/50 or whatever that means. I just halted every single spend in a total commitment to saving. This with a view to getting a roof over my head.

It became almost addictive, finding ways to not spend money. Downsize your rental, sell your car and drive a banger, whatever...

You simply find out what you need to do to get a mortgage you can afford without killing yourself and set about getting one as quick as you can.

There ain't no feeling like not having a landlord knock (or have the potential to knock) on your door again.