Feeling guilty about spending money..
Discussion
The situation and honest account of things is...
I'm 34 and earn just over £60K having just started a new job
I have £80K outstanding on my mortgage (monthly payments are less than £400)
£15K in savings
£8K unsecured loan outstanding
Pension pot of £6K (sod all, I know, but see below)
No PCP/car leases/flash gym memberships or other drains on resources
Single and no kids
After a pretty transient attitude to money in the past, not to the point that I'd amassed debts or been irresponsible, but I spent what I earned pretty much every month, I keep worrying about my finances and particularly the future.
I was made redundant 18 months ago and got a £30K pay off which all went on a mortgage overpayment. Ever since I've been really wary and borderline tight-fisted with my money and feel worry. Especially when it comes to the future - I'm now paying 15% of my net income, plus a 3% company contribution, into my pension because my pot currently amounts to nothing.
The sensible part of me says pay off the loan and have a few grand in the bank and keep amassing.
The other half of my says buy a Caterham for £15K . It's something I can always sell off in the future if needed. And I still have a decent wedge left each month to start amassing some savings and / or pay off the unsecured loan.
Unfortunately because I do around 30K a year I'm in a diesel MINI so something interesting daily is out of the question.
What do you reckon? Head versus heart?
I'm 34 and earn just over £60K having just started a new job
I have £80K outstanding on my mortgage (monthly payments are less than £400)
£15K in savings
£8K unsecured loan outstanding
Pension pot of £6K (sod all, I know, but see below)
No PCP/car leases/flash gym memberships or other drains on resources
Single and no kids
After a pretty transient attitude to money in the past, not to the point that I'd amassed debts or been irresponsible, but I spent what I earned pretty much every month, I keep worrying about my finances and particularly the future.
I was made redundant 18 months ago and got a £30K pay off which all went on a mortgage overpayment. Ever since I've been really wary and borderline tight-fisted with my money and feel worry. Especially when it comes to the future - I'm now paying 15% of my net income, plus a 3% company contribution, into my pension because my pot currently amounts to nothing.
The sensible part of me says pay off the loan and have a few grand in the bank and keep amassing.
The other half of my says buy a Caterham for £15K . It's something I can always sell off in the future if needed. And I still have a decent wedge left each month to start amassing some savings and / or pay off the unsecured loan.
Unfortunately because I do around 30K a year I'm in a diesel MINI so something interesting daily is out of the question.
What do you reckon? Head versus heart?
If you stick with a car like the Caterham that holds its value, it's just eventually an asset you can sell if you hit bad times again to pay the rent. Factor in insurance and tax etc versus the fun you get back out and it's your call.
If you go in for classics, a big point missing from most threads is the money spent to keep more complex / expensive cars in good health when considering appreciation at sale time.
With the pension though, your at an age where the capital will multiply so don't ignore paying whatever you can into there. You've got a life for living, it's all balance.
If you go in for classics, a big point missing from most threads is the money spent to keep more complex / expensive cars in good health when considering appreciation at sale time.
With the pension though, your at an age where the capital will multiply so don't ignore paying whatever you can into there. You've got a life for living, it's all balance.
The Caterham should be relatively cheap to run, especially as I'll likely do no more than 5K miles a year or so in it.
I know it's odd having a personal loan and savings, but I'd sold a more expensive car, bought my MINI outright and have money left over. The original loan was to part fund the car I sold.
It's affordable and definitely doable but that doesn't make it the 'right' choice I suppose. Then again you're a long time dead.
In terms of not saving enough, I can up my pension contribution but I'd hoped 15% was a decent enough amount.
I know it's odd having a personal loan and savings, but I'd sold a more expensive car, bought my MINI outright and have money left over. The original loan was to part fund the car I sold.
It's affordable and definitely doable but that doesn't make it the 'right' choice I suppose. Then again you're a long time dead.
In terms of not saving enough, I can up my pension contribution but I'd hoped 15% was a decent enough amount.
My situation is very similar to yours and i am constantly wondering about how much to spend v save. Have a read of mr money mustache if you haven't before. Its at the extreme end of savings over spending but something i wish i'd known more about in my early 20s.
I chose to pay off the personal loan with a recent bonus and removing money from shares/funds i'd invested in. By the sounds of things you could quickly save up enough to get back up to £15k in savings and then go buy the car - but would you want to do that? Every last bit of savings on a toy....How secure is the new job? How's the house looking - need a new drive? Fancy a new kitchen?
What rates of interest are you getting on the savings? And the debt?
Personally, i want rid of my mortgage next, even though the rates are low (1.99%) i intend to save/invest with the aim to earn more than 1.99% and hopefully have it paid off in under 5 years. Sounds like you could do that in 3-4 years. It will mean sticking with my 10 year old 335i instead of having a newer m3 but longer term i think its the best thing to do. But, its the boring/sensible choice and life is for living, right?
Anyway, clearly i am not much help through my own lack of indecisiveness but will be watching with interest.
I chose to pay off the personal loan with a recent bonus and removing money from shares/funds i'd invested in. By the sounds of things you could quickly save up enough to get back up to £15k in savings and then go buy the car - but would you want to do that? Every last bit of savings on a toy....How secure is the new job? How's the house looking - need a new drive? Fancy a new kitchen?
What rates of interest are you getting on the savings? And the debt?
Personally, i want rid of my mortgage next, even though the rates are low (1.99%) i intend to save/invest with the aim to earn more than 1.99% and hopefully have it paid off in under 5 years. Sounds like you could do that in 3-4 years. It will mean sticking with my 10 year old 335i instead of having a newer m3 but longer term i think its the best thing to do. But, its the boring/sensible choice and life is for living, right?
Anyway, clearly i am not much help through my own lack of indecisiveness but will be watching with interest.
scottri said:
My situation is very similar to yours and i am constantly wondering about how much to spend v save. Have a read of mr money mustache if you haven't before. Its at the extreme end of savings over spending but something i wish i'd known more about in my early 20s.
I chose to pay off the personal loan with a recent bonus and removing money from shares/funds i'd invested in. By the sounds of things you could quickly save up enough to get back up to £15k in savings and then go buy the car - but would you want to do that? Every last bit of savings on a toy....How secure is the new job? How's the house looking - need a new drive? Fancy a new kitchen?
What rates of interest are you getting on the savings? And the debt?
Personally, i want rid of my mortgage next, even though the rates are low (1.99%) i intend to save/invest with the aim to earn more than 1.99% and hopefully have it paid off in under 5 years. Sounds like you could do that in 3-4 years. It will mean sticking with my 10 year old 335i instead of having a newer m3 but longer term i think its the best thing to do. But, its the boring/sensible choice and life is for living, right?
Anyway, clearly i am not much help through my own lack of indecisiveness but will be watching with interest.
I suppose the fact that I'm questioning it means I know it's probably the wrong decision.I chose to pay off the personal loan with a recent bonus and removing money from shares/funds i'd invested in. By the sounds of things you could quickly save up enough to get back up to £15k in savings and then go buy the car - but would you want to do that? Every last bit of savings on a toy....How secure is the new job? How's the house looking - need a new drive? Fancy a new kitchen?
What rates of interest are you getting on the savings? And the debt?
Personally, i want rid of my mortgage next, even though the rates are low (1.99%) i intend to save/invest with the aim to earn more than 1.99% and hopefully have it paid off in under 5 years. Sounds like you could do that in 3-4 years. It will mean sticking with my 10 year old 335i instead of having a newer m3 but longer term i think its the best thing to do. But, its the boring/sensible choice and life is for living, right?
Anyway, clearly i am not much help through my own lack of indecisiveness but will be watching with interest.
The money's sat in a current account so earning no interest.
The house is a 15 year old new build, if that makes sense, with original fixtures and fittings, and could do with a bit of a refit. But it's more than liveable and I'm out of the house for 12-14 hours a day.
Getting a trade off is hard.
Maybe I should be brave and spent a third as much on a motorbike instead! That's what I've always wanted but too frightened of getting seriously hurt. Nothing too daft and not a superbike, just something big to go touring around Europe on.
thenortherner said:
I suppose the fact that I'm questioning it means I know it's probably the wrong decision.
The money's sat in a current account so earning no interest.
The house is a 15 year old new build, if that makes sense, with original fixtures and fittings, and could do with a bit of a refit. But it's more than liveable and I'm out of the house for 12-14 hours a day.
Getting a trade off is hard.
Maybe I should be brave and spent a third as much on a motorbike instead! That's what I've always wanted but too frightened of getting seriously hurt. Nothing too daft and not a superbike, just something big to go touring around Europe on.
If your savings aren't even earning any real interest you'd be mad to keep them and continue with the loan. Your situation isjust costing you money at both ends. Getting the loan paid off is a no-brainer in that situation IMO.The money's sat in a current account so earning no interest.
The house is a 15 year old new build, if that makes sense, with original fixtures and fittings, and could do with a bit of a refit. But it's more than liveable and I'm out of the house for 12-14 hours a day.
Getting a trade off is hard.
Maybe I should be brave and spent a third as much on a motorbike instead! That's what I've always wanted but too frightened of getting seriously hurt. Nothing too daft and not a superbike, just something big to go touring around Europe on.
Maybe save up for the bike after that and see if you want to buy one then? Your savings power must be significant so its not like you'd have to wait that long to buy a bike/car. And when you have no debt and are only talking about spending your savings i think it makes the decision making a little more straight forward.
I'm a regular tightwad and always prefer to pay off debt, save or pay into pension (currently 40% of salary plus employers 5%) but in you situation I'd say go for the Caterham. You won't lose money and they're pretty liquid. Keep paying the 15% into your pension and then pay off the unsecured as quick as you can...if you don't have dependents you'll do it quickly.
eta
Missed the bit about the bike..clear the debt then £7k on a newish MT09.
eta
Missed the bit about the bike..clear the debt then £7k on a newish MT09.
Ahhh, this isn't making it any easier!
The loan is 3.4% APR.
If I go down the savings route I'd pay £5K into LISA. It's only sat in my current account until I make my mind up.
I could pay off the lot and bridge the gap within 6 months or so if I tried. I'd probably get a better deal buying a Caterham in the winter!
Ref. the MT09, I think I'm too frightened of getting hurt! It sounds odd but I'm more attracted to the bigger tourers like the FJR1300 or VFR with panniers.
The loan is 3.4% APR.
If I go down the savings route I'd pay £5K into LISA. It's only sat in my current account until I make my mind up.
I could pay off the lot and bridge the gap within 6 months or so if I tried. I'd probably get a better deal buying a Caterham in the winter!
Ref. the MT09, I think I'm too frightened of getting hurt! It sounds odd but I'm more attracted to the bigger tourers like the FJR1300 or VFR with panniers.
thenortherner said:
Ref. the MT09, I think I'm too frightened of getting hurt! It sounds odd but I'm more attracted to the bigger tourers like the FJR1300 or VFR with panniers.
Listen buddy, you're 34 not 64.Seriously either buy the Caterham now or do your bike test and get a MT09 or Street Triple. The loan APR isn't too bad plus you havn't got much of the summer left, get it done...you won't be on your deathbed regretting losing out on 3% interest margin.
If I were you to address all avenues I would:
Pay off the full amount of the loan
5k towards a fun car or bike
2k into a stocks & shares isa plus the monthly amount your loan payment was to rebuild the savings.
Aim to end the mortgage in around 5-10yrs.
Once mortgage is done accelerate the retirement provisions.
Set yourself some goals.
Pay off the full amount of the loan
5k towards a fun car or bike
2k into a stocks & shares isa plus the monthly amount your loan payment was to rebuild the savings.
Aim to end the mortgage in around 5-10yrs.
Once mortgage is done accelerate the retirement provisions.
Set yourself some goals.
This might not be helping but a caterham is very cheap to insure and, if you buy well, you won’t lose much if anything on depreciation 
the downside is that higher rate pension contribution relief is expected to end at some point - though in my (possibly irrelevant) view I am not sure the govt would dare annoy so many high paid teachers, doctors, civil servants etc by giving them only 20% relief on pension contributions
the downside is that higher rate pension contribution relief is expected to end at some point - though in my (possibly irrelevant) view I am not sure the govt would dare annoy so many high paid teachers, doctors, civil servants etc by giving them only 20% relief on pension contributions 1. Increase pension payments enough to use the proportion of your income subject to higher rate tax, hopefully through salary sacrifice and your employer will pay in their saving in NI.
2. Pay off the loan.
3. £4,000 into LISA, government will add £1,000 to this, invest in a suitable fund to grow. I would use Fundsmith but I am not a financial adviser and there are others better qualified to give advice.
4. Overpay mortgage if possible without penalty, plus add to LISA in future years if possible.
5. If you later decide you would like a fun car or motorbike stop overpaying the mortgage or adding to LISA and buy one using a loan or PCP.
2. Pay off the loan.
3. £4,000 into LISA, government will add £1,000 to this, invest in a suitable fund to grow. I would use Fundsmith but I am not a financial adviser and there are others better qualified to give advice.
4. Overpay mortgage if possible without penalty, plus add to LISA in future years if possible.
5. If you later decide you would like a fun car or motorbike stop overpaying the mortgage or adding to LISA and buy one using a loan or PCP.
CaptainSlow said:
Edible Roadkill said:
Aim to end the mortgage in around 5-10yrs.
Once mortgage is done accelerate the retirement provisions.
Don't do this, get what you can in the pension now as you're benefiting from 40% tax relief..you may not be able to do this in the future.Once mortgage is done accelerate the retirement provisions.
Money you put in a LISA gets a 20% tax rebate, and you can't access it until you're 60.
Money you put in a pension gets a 40% tax rebate, plus any employer contribution, and you can access it earlier than the LISA (I think, I'm not a pensions expert).
I just bought a Caterham, it's awesome and I don't expect it to cost me anything (apart from upgrades
) over 2-3yrs.
Money you put in a pension gets a 40% tax rebate, plus any employer contribution, and you can access it earlier than the LISA (I think, I'm not a pensions expert).
I just bought a Caterham, it's awesome and I don't expect it to cost me anything (apart from upgrades
) over 2-3yrs.thenortherner said:
The situation and honest account of things is...
I'm 34 and earn just over £60K having just started a new job
I have £80K outstanding on my mortgage (monthly payments are less than £400)
£15K in savings
£8K unsecured loan outstanding
Pension pot of £6K (sod all, I know, but see below)
No PCP/car leases/flash gym memberships or other drains on resources
Single and no kids
After a pretty transient attitude to money in the past, not to the point that I'd amassed debts or been irresponsible, but I spent what I earned pretty much every month, I keep worrying about my finances and particularly the future.
I was made redundant 18 months ago and got a £30K pay off which all went on a mortgage overpayment. Ever since I've been really wary and borderline tight-fisted with my money and feel worry. Especially when it comes to the future - I'm now paying 15% of my net income, plus a 3% company contribution, into my pension because my pot currently amounts to nothing.
The sensible part of me says pay off the loan and have a few grand in the bank and keep amassing.
The other half of my says buy a Caterham for £15K . It's something I can always sell off in the future if needed. And I still have a decent wedge left each month to start amassing some savings and / or pay off the unsecured loan.
Unfortunately because I do around 30K a year I'm in a diesel MINI so something interesting daily is out of the question.
What do you reckon? Head versus heart?
OP.I'm 34 and earn just over £60K having just started a new job
I have £80K outstanding on my mortgage (monthly payments are less than £400)
£15K in savings
£8K unsecured loan outstanding
Pension pot of £6K (sod all, I know, but see below)
No PCP/car leases/flash gym memberships or other drains on resources
Single and no kids
After a pretty transient attitude to money in the past, not to the point that I'd amassed debts or been irresponsible, but I spent what I earned pretty much every month, I keep worrying about my finances and particularly the future.
I was made redundant 18 months ago and got a £30K pay off which all went on a mortgage overpayment. Ever since I've been really wary and borderline tight-fisted with my money and feel worry. Especially when it comes to the future - I'm now paying 15% of my net income, plus a 3% company contribution, into my pension because my pot currently amounts to nothing.
The sensible part of me says pay off the loan and have a few grand in the bank and keep amassing.
The other half of my says buy a Caterham for £15K . It's something I can always sell off in the future if needed. And I still have a decent wedge left each month to start amassing some savings and / or pay off the unsecured loan.
Unfortunately because I do around 30K a year I'm in a diesel MINI so something interesting daily is out of the question.
What do you reckon? Head versus heart?
If you maintain that pension percentage and increase it by say 3% per year on average alongside pay rises, then your pot will be worth anything from approx £600k to £1m at age 65.
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