# Am I saving too much?



## pingin (5 Apr 2011)

I'm currently saving a quarter of my monthly salary towards a mortgage deposit. I have about €20,000 saved. 

Problem is, with public service pay cuts and rises in VHI etc, my monthly budget's getting a bit tight. I'm reluctant to reduce the amount I save, but maybe that's not the wisest approach to take.

While I know there isn't any ideal figure, am I saving too much? An extra one or two hundred added to my monthly budget would make all the difference and I'd still be saving a fair amount.


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## PaddyW (5 Apr 2011)

Save what you feel comfortable with. If things are getting a bit tight, then allow yourself a little extra room for budgeting during the month. Decide on a figure that would ease things a bit with you and deduct that from your savings amount each month. Are you getting a good return on your savings? Check out the best buys.


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## mmclo (5 Apr 2011)

House prices are tumbling so in a way your 20k is appreciating quite rapidly. This is important as the % of deposit to hosue price will be important in getting a mortgage now and may influence the type and what you pay. With that in mind you could ease up a little depending on your own preferences and needs


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## Protocol (5 Apr 2011)

I have a mortgage and save nearly 25% of my net wage as well.

So, IMHO, no you are not saving too much.

I recall when I earned 3k net pm, I used to pay rent, run a car, take 4-6 foreign hols a year, and save 1000 pm.


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## so-crates (5 Apr 2011)

Pingin, you need to look at drawing up a budget as percentage is not necessarily a good guide. You need to calculate what your income after tax is and what your cost of living is. If the latter cannot be reduced then that determines what you have left over to save. While generally people can reduce their cost of living there are limits as to how low you can be reasonably expected to go. You do have to eat, move around in public, dress, and wash and sleep somewhere. You can reduce these costs by selecting the most cost effective means of meeting these necessities but fundamentally you cannot entirely avoid them. The lower your income is, generally, the larger the proportion of your income is devoted to cost of living. Which is what you have just come up against. Your income has dropped at a faster rate than your cost of living so you either need to reduce your savings to make up the shortfall in your cost of living or reduce your cost of living further to allow you to continue saving at the same rate.


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## niceoneted (6 Apr 2011)

Protocol - I am doing exactly what you say you did when you were on 3k a month. I pay a mortgage though not rent.
I think OP if you want to and I also think it is in your best interest to have as much saved so there is room for improvement. Perhaps not every month but what say every second month.


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## Bronte (6 Apr 2011)

I don't think there is such a thing as saving too much. But if it's making you miserable, and as you can afford it of course you can reduce the amount you save or cut your spending.


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## pingin (6 Apr 2011)

Thank you all for those useful tips. 

Most of my money is in the Post Office (savings account and savings  certificates), with a little bit in the credit union. Not sure if I'm  getting the best rate with the PO. I've made a few withdrawals over the  years, so that's probably affected things. 

As you say mmclo, the nest-egg is growing nicely but I'd also like to  have enough to cover the extras such as insurance and furnishings.

I've started putting a monthly budget together using the Apple Numbers  application. It takes a bit of getting used to but it'll probably be  worth it in the end. Did budgets on paper in the past but it wasn't very  detailed. I've kept a spending diary too; nothing spectacular there,  though the Saturday coffee treat was costing more than it should. I think I may be making too high a provision for electricity, gas etc.

I'll scale back the saving a bit and see what happens.

Thanks again.


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## Chris (6 Apr 2011)

Agree with Protocol and especially Bronte's comment on there being no such thing as saving too much. I save between 25 and 30% of household income excluding pension contributions. I would probably be reluctant to make too big a change to my living standards if income went down, but I think that is a very personal decision. 
As house prices are still coming down to meet you, I think it would not be a mistake to save a little less to maintain a certain living standard.


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## Godfather (6 Apr 2011)

pingin, that's a fantastic philosophical question... I'm a huge saver and I'm wondering if this kind of approach will be punished by a property tax or by bankruptcy of a bank...


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## pingin (6 Apr 2011)

We had a talk at work a few months ago from a financial adviser who said the best place to have your money at that time was in Anglo Irish Bank! He reckoned that they the best rate and they were secure because of the bank guarantee.


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## coin (6 Apr 2011)

It depends on what you earn too. I get 2300 gross and manage to save 43% of it every month.


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## Godfather (6 Apr 2011)

coin said:


> I get 2300 gross and manage to save 43% of it every month.



Wow! Lucky you!!!


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## pingin (6 Apr 2011)

Not sure where I'm going wrong. In one way I'm well off: car paid for, low rent, social drinker, don't spend on clothes (fashion disaster), no expensive habits (single, no girlfriend at present!), apart from the occasional book or CD. But then, I suppose the small things all add up and eat into the budget...


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## flattea2 (6 Apr 2011)

pingin said:


> though the Saturday coffee treat was costing more than it should.


 
Dont forget to enjoy life too


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## coin (6 Apr 2011)

Godfather said:


> Wow! Lucky you!!!



I could save a bit more but choose to live my life at the same time, interest I get from fixed term savings is handy for the odd holiday too. Obviously not tied to a mortgage and kids helps a lot. Won't be long away though!


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## anastasiablu (6 Apr 2011)

I did a share investment 10 week course several years ago, the lecturer impressed me most with his opinion that above all else we should invest in memories. We also virtually invested 10,000 at the beginning of the course and had lost so much by the end I realised I should stay away from shares and focus on the holidays/memories.


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## Godfather (7 Apr 2011)

Every time I'm buying something I always ask myself "do I really need this?" so that I won't finish into compulsive buying... When Lenihan was suggesting to spend to save the economy I was shocked... Spend your money or borrowed money??? 

Furthermore, encouraging spending could have bad effects on the environment if then our recycling places contain so many things that can still be re-sold by the Saint Vincent de Paul Society with no problem... 

To paraphrase Gordon Gecko: "Saving is good, just diversify as much as you can"


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