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The Saver: Which Category Do You Belong To? … And a Giveaway

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The Saver: Which Category Do You Belong To?

Saving Money is Hard

Why is saving money so much harder than spending money? Spending money comes so easy…  some might actually say that spending money gives them huge amounts of (temporary) pleasure! Why do we not get the same level of enjoyment out of paying £100 into a savings account that we do blowing it on a night out or on a fancy meal? Why does spending £1000 on a holiday feel so good, yet putting £1000 away for a rainy day feels like you have suffered a loss? There is no doubt about it… Saving is hard.

The answer is simple really.We are the generation that thrive on immediate gratification.We want things now and we don’t care how. We would rather blow £10 on some junk food than make an extra payment on our credit card. After all.. £10 is too small a sum of money to make a difference.. right?

Wrong!

Some call it the snowflake effect, I call it getting a grip of your life and understanding why it is important to save. For those of your who are new to the concept of compound interest or the power of savings, consider the following situation.

According to recent research, the average family in the UK spends £1230 each year on dining out / takeaways – which equates to approximately £100 a month. Not only is this extremely unhealthy, but it is utterly ridiculous!
Consider a situation where a family halves the amount spend eating out and instead saves the money – £50 per month – for their child’s future education at an annual interest rate of 5%. Assume that they start to save this money each month from the moment their new baby is born until they are ready to leave home at 18 and they would have a whopping balance of £17,460!

In reality, £50 per month is a pretty insignificant amount of money, where as the result is unarguably VERY significant!

Which Type of Saver Are You?

The Disciplined Saver –

You are pretty disciplined when it comes to saving and regularly build on your nest egg! You have probably been at it for some time and can already see some interest and other results of your dedication. Transfer the bulk of your savings money into your savings account on Pay Day and re-evaluate your situation throughout the month. Consider shifting an extra few pounds here and there when you skip a latte or other treat. You can always do better.

The Occasional Saver –

You like to save sometimes. You understand that you probably should, but don’t think skipping a month here and there makes too much of a different? (OOOPS!) You consider yourself to be in control of your finances, but admit you could probably do a little better and are often over-cautious about leaving enough money in your current account to see you through to the end of the month out. Automate your payment to your savings account on Pay Day. This way you will never miss a month. Consider increasing your savings goal by £10-£20 a month and track your progress. Keep going as long as you possibly can!
I think if we are honest, a LOT of us fit into this category!

The Horrendous Saver –

You are a total disaster when it comes to savings. Your credit card would suffice in an emergency right? (WRONG!!). You would much rather buy a few new DVDs each week than wait and save for retirement. After all you only live once right? Why miss out on today in case tomorrow never comes?
The horrendous saver needs to take immediate action. Automate a monthly payment to your savings account (open one if you need to) and delete the savings account from your online portal view. Re-evaluate what you might like to do later on in life… Start a family? Buy a dream house or Retire early? Search for the motivation, because somewhere it exists! Depending on how bad you are with money, you might want to even try and forget about your savings account and consider the monthly transfer a ‘bill payment’

 

In Summary

The time to start saving is not tomorrow, the time to start saving is right now. Small savings make a big difference. Small sacrifices today mean a big reward for the future. To celebrate the series of educating others on the power of saving, I am delighted to announce a GIVEAWAY!! Full details below

So Honestly – What type of Saver are you? What % of your monthly income is your target… and what is your actual?

 

a Rafflecopter giveaway

Lovely comments

  1. Budget & the Beach says

    I’m somewhere in the middle of a disciplined saver and occasional saver. I WOULD be a disciplined saver if I actually made enough to always cover my basic needs and then some. But the life of a freelancer is unpredictable, and sometimes I only make enough to cover basics. That is not good enough for me, which is why I want to go full time. So I can always be disciplined. 🙂

  2. John S @ Frugal Rules says

    Your posts never cease to make me laugh, especially for a Monday. 🙂

    I think why saving is so difficult for many is that it requires discipline. And, let’s face it, we all struggle with discipline in different areas.

    In terms of short term savings, I would put myself in the disciplined saver category. But, in terms of long term savings (retirement), I would be in the occasional category. I don’t do it to the extent I do short term, and I know that needs to change. I guess I need to start practicing what I preach, huh?!? 😉
    John S @ Frugal Rules recently posted..Why We All Should Care About High Frequency TradingMy Profile

    • savvyscot says

      Aww thanks John – glad to hear I can make someone laugh 😀 !

      You are absolutely spot-on! We all struggle somewhere with discipline.. whether it is money, alcohol, food, gambling etc.

      That said, we can all improve in every area and we have to realise that we can never be perfect!!

      Practicing what you preach is HARD!
      savvyscot recently posted..10 Tax Tips for Contractors & FreelancersMy Profile

  3. Pauline says

    I am somewhere between disciplined and occasional. At the moment I am spending all the money I make but I have investments whose interests/dividends are automatically reinvested and they amount to probably 50% savings rate. You have to tell me where you get 5% return in the UK, my Santander saver is already at 3% and I find it amazing nowadays!
    Pauline recently posted..How I sold my flat… again!My Profile

  4. C The Writer says

    I’m definitely the horrendous saver. Not saving money is dangerous. I’ve experienced it firsthand. It’s really, really bad. I am in the situation I am now because of not saving.

    • savvyscot says

      Hey C – good for you being able to admit you are in that category. It sounds to me like you should start to automate a payment (however small it may be) and start working on changing bad habits. It will take time, but it will DEFINITELY be worth it in the long run.. 🙂
      savvyscot recently posted..10 Tax Tips for Contractors & FreelancersMy Profile

  6. thestarvingartistcanada says

    I’m not a spender, nor am I a saver.

    I’m an investor.

    I use credit to my advantage and every penny that comes or goes comes from my brokerage account.

    While it’s “cash” balance is showing a negative, the total value of the account is still nicely positive and climbing.

    You can’t beat inflation by saving. You have to invest. So that’s what I do.
    thestarvingartistcanada recently posted..why I don’t like bondsMy Profile

  7. CF says

    I am very strictly disciplined. I think the best way to stick to something is to make it a habit and a routine, so I’m pretty anal about saving and allocating money.

    We don’t spend much on groceries ($200 for two of us a month), but we do like to eat well. So when we do go out to eat once every month or two, we WILL often spend $50-$100 and indulge in our foodie-winesnob sides. However, that money comes out of our “fun money” budget, since we’re basically eating for fun and enjoyment.
    CF recently posted..How to improve your finances while off workMy Profile

    • savvyscot says

      $200 a month on groceries is fantastic! Good job…. I am glad you have the balance to indulge! Sounds like you are well on your way to being the perfect saver – now to educate the rest of the world

  9. Anne @ Unique Gifter says

    I’m somewhere between the disciplined and the occasional, myself.
    We try to save the entirety of my spouse’s paycheques, roughly. My spouse is the higher earner. That said, out of that we pay the mortgage and the car payment. We have “automated” doubled mortgage payments as our savings and then whenever we build up excess cash, we drop that in as well.
    Anne @ Unique Gifter recently posted..I’m Giving Away a Gift!My Profile

  10. Vicky says

    I would fall somewhere between disciplined and occasional. Instead of setting savings goals, I would just save whatever was leftover at the end of the month. Fortunately, most of the time I had some leftover, but I do wish I was more disciplined when I was working full-time. 🙂
    Vicky recently posted..Weekend LinksMy Profile

  11. Catherine says

    To save money…I usually look at my utilities and change them up if I can (cell phone plans often have monthly promos that I call about),sell stuff online…every penny helps!

  13. Vanessa says

    I don’t think it’s fair to ask disciplined savers to save a bit more here and there. Usually the most disciplined savers are saving HUGE sums of money and saying that they “can always do better” is a bit bullying.

    I might be sensitive though because I’m a disciplined saver and I give myself a small strict allowance of which every penny is spent or “saved” for the following pay period. I’m sure I could do a bit better but my quality of life would fall dramatically
    Vanessa recently posted..New savings goalMy Profile

    • savvyscot says

      Hey Vanessa. You make a good point, but I would say for every 1 of you (a proper disciplined saver) there are 100 ‘almost’ disciplined savers. I am 100% not advocating that you reduce your quality of life. As soon as quality of life starts to drop in a big way – you are saving too much!! Good for you – you should be proud of yourself 🙂

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