Whatever happened to "saving for a rainy day"?

Doodledog

I think that a lot of people who will be badly affected by the fuel crisis won't be those who have frittered away their money though. They will be those who have to spend the majority of their income on rent/mortgage, childcare and bills and will have little or nothing left over. If they have a gym membership, a newspaper or fancy soap, why not? Everyone needs a bit of luxury, particularly if they are working all week.

I don't think the full crisis falls into the category of 'a rainy day', but I know what you mean in general. I was also brought up to save for what you wanted and to 'put something by' for a rainy day. As I've got older, I realise that means tests often penalise people for doing so, and have wondered whether I'd have been better off spending more when I was younger. So many people are very keen to wonder whether others 'can afford' tp pay for things that others get free, or if they 'need' any concessions, and rather than see thrift as a positive thing see it as evidence that you were 'lucky enough to be able to save'. It does sometimes feel as though spending is rewarded and saving penalised.

I think you’re right - younger people can’t be blamed for not saving when you realise the financial pressures brought to bear these days. Home ownership is all but out of reach and any hope of saving for the massive deposits needed are impossible when you look at the financial pressures - rents were already spiralling and when you add the cost of living increases and fuel prices, there’s not much left over to save.

I agree with you about means testing. I had this very argument with a family member recently. Their attitude was that in general people should save if they can and it’s something I agree with mostly. It’s means testing I have a big problem with because if you’ve been able to save and you run into difficulties, means testing thresholds are set so low that you’re left struggling even if you’re only a pound or two above the threshold and you’re expected to drain your savings before you get help.

It’s happening in later life care too - albeit in a different way, but still a form of means testing to my mind. An elderly relative went into a dementia care home recently. Her funding pot came from the sale of her home and when we were dealing with the arrangements it came to light that it’s common practice in the UK for care homes to charge self funders more per month so that they can provide subsidised places for Local Authority funded residents. Our relative is paying in the region of £1000 a month more than LA funded residents in our area. Now I know there’s a social principle involved, but we worked out that if she lives five years her funding pot will be exhausted and she will have to rely on the LA, who may want her moved to a cheaper facility before they will pay. And yet in that time she will have essentially contributed £60,000 towards LA funding for other peoples’ care. I find that really hard to swallow.

Yes, the only people who can possibly see that as acceptable are those for whom £60k is less than 10% of the profit they've made from just living in their house or those who will get it paid anyway.

It is those with modest means who are bled dry, and they are the people who are castigated for resenting the fact that the system is so unfair.

'53MadeInYorkshire'. It must be very hot for you if you're living in the conservatory. Could you not move into a cooler room?

I’ve never earned enough to save but have managed to pay mortgage on my little excouncil house. I am paying about the equivalent of a weeks rent in a private rental for my monthly payment. However if I had been in social housing I could not have afforded to work I also run a car but for how long I don’t know. I just about manage.
I was amazed at Asda being criticised for its new yellow label foods. Love them and I save but some people say they feel stigmatised. How silly. So although I would love to have a fat bank account. I’m content. With making do, knowing I don’t owe anyone I do feel sorry for families tho.

When filling a form for a Blue Badge or similar, remember to fill it in remembering your worst most painful day because that could happen again in future. That money may become very necessary.

You asked what happened to "saving for a rainy day".
There are many good answers, here is my contribution.

Since around 1980 banks in Denmark no longer offer interest on the money in a savings account - so there was no real advantage in trying to save.

Tax rebates were, and are still, based on whether you were a member of a union and its scheme for unemployment benefit, so it made sense to join. However, you were taxed on earnings that you had deducted at source and paid into a pension fund, and taxed again on the money when it was paid out when you retired, so it made no sense to contribute to pension schemes apart from the compulsory ones.

If you need national assistance, any money you had in a savings account in your own name has to be withdrawn and used up before national asssitance is made available to you.
Another good reason for not saving, or at least not banking any money you tried to save.

A savings account in your children's names, to be made available to them for further education once they reached the age of 18 was not touched by national insurance, and if you had a saving account of the kind designated "Saving to buy a house" you could keep that money too, as long you were living in rented accomodation and owned no property yourself.

Household insurance did not cover cash stolen from your home, even if it had been securely locked away. This has been altered on the face of it by most insurance companies, but they have increased their premiums when they abolished the no insurance for cash rule - so really it boils down to the same thing.

Since 1979, living on an average wage in a city, expenses were so high that it literally was not possible to save more than a very modest amount a year.

Now as a pensioner I have managed by practising strict economy to put around 300 euros aside in the course of the year since our last cat died, in order to pay to have our two recently acquired kittens chipped, innoculated and issued with EU passports next week. And somehow in the course of the next two or three months I shall need to find a comparable, or slightly larger amount to have them both neutered before the female comes into season.

So this I think answers why people stopped saving, so now it is only really our generation who would know how to do so.

Norah

The people on holiday, getting nails, who have Land Rover - are not in crises and we needn't have opinions on their 'rainy day pots'. Unfortunately, the people in crisis haven't money to save and need not be judged.

Exactly this. My partner and I don’t have spare earnings to put away and save.

Rain would be very welcome at the moment let alone saving for it. There is the famous quotation 'The poor will always walk among us.' I think that life should include things we all enjoy and something saved for bigger things. It is not a governments job to keep bailing swathes of the population out all the time. Food hubs, food banks etc are a modern version of what has always existed the better off helping out the less well off.

That's exactly how society should work.
Without that, we have lost humanity.

I am saddened to read some of these posts, they show a complete lack of understanding or compassion, and are rife with generational division; just what the government want you to do. While people are spreading stories about other having the latest phone (allegedly) or having their nails done, or heaven forfend, treating themselves to a coffee and a slice of cake, they are not blaming those at fault, the government. Can we please stop with the 'all youngsters' nonsense, you don't know mine, and I don't know yours.

I was brought up to save by a father who was an accountant. I remember going on a school trip and him saying to me to make sure I didn't spend all my pocket money but keep some for contingencies. I didn't know what contingencies were! I do now and have always kept some money aside for them!

I do have some savings and am grateful for that as the present cost of living crisis would be a big worry otherwise. I feel so sorry for those who through no fault of their own are unable to save, but have no sympathy for those who earn good money but never save but spend on luxuries. Why should those who are careful bail them out when they come upon hard times. It's true that those of us who are careful end up losing out on benefits but at least we can be confident that we have done our best to provide for ourselves and our families. Tempting as it is to spend, I'll always feel a need for a 'rainy day fund' - those contingencies my dad was so concerned about.

I think everyone was bought up to save (with exceptions, of course)
People are speaking as if it's unheard of.

It’s always been the same- the “feckful” are the ones punished whilst the feckless get a (mostly) free ride… ☹️

Doodledog

My two both rent, and are both paying back student loans, so buying somewhere of their own is nowhere near as easy as it was for us, even though we bought at a time when prices were rising and interest rates very high.

I don't think it's fair to blame young people for not doing what we did - times are different. I also think that castigating them for buying little luxuries is unfair when they work so hard. We didn't buy fancy coffee* as it wasn't available, and also because saving the £3.50 every day might have moved us closer to the deposit for a house. It would be a drop in the ocean these days, so it's really not comparing like with like.

*insert 'frivolous' spending of choice.

I worked out that NOT buying coffee for £3.50 for five days a week for a 48 week working year would allow you to save £840. It's too hot to work out how many years it would take to save even a 10% deposit for a £100k house, but it would be a long wait.

I have never had enough income to save. On t he other hand I have never owed any money or bought anything on hire purchase. I have paid credit card in full each month.
My husband used to say I was economical to the point of meanness.

People in the same nursing home as my relative have no savings and are funded by the state. My relative has worked hard, has savings and owns their house. They receive the same care but my relative is self funding to the tune of approx £40,000 per year. I don’t know the circumstances of those being state funded but how on is this system fair? My relative would have been better off spending all they earned and qualifying for state funded care.

Perhaps the people being "funded by the state" were on the breadline and couldn't afford to squirrel away enough to fund £40,000 a year. But we live in a country that (until now, mostly) doesn't value a person by how much they have in the bank, but by the fact that they are a human being.

Adelaide66: Private housing is a huge obstacle to saving

Why?

It is not a governments job to keep bailing swathes of the population out all the time.

I agree - they should not be bailing out businesses that refuse to pay their workers a living wage.

Food hubs, food banks etc are a modern version of what has always existed the better off helping out the less well off.

Thank goodness for food banks. If the less-well-off had to rely solely on the whims of the better-off (who might decide they were not what they considered "deserving") they might never know where their next couple of day's food was coming from. From my own experience, many of those that contribute towards food banks are often only a bit better off than the less-well-off. My low-waged (but not by me) cleaning-lady struggles to make ends meet on many occasions, but feels honour bound to buy something extra each shopping session for the food bank. As do her adult children who also have little left over at the end of the month.

'The poor will always walk among us.'

Yes, they have - for centuries - what a sad reflection on the way humanity has organised itself that they still do.

Money is power and control. And those that have the most of it are going to make damned sure they are not relieved of either.

There are more of us - the many - than there are of them - the few, and the danger is that if we, the many, form a cohesive movement, we could completely change the status quo.

So we must be encouraged to divide ourselves into factions and fight among ourselves. And accept that the poor will always be with us because, well, that's just the way of the world, isn't it?

I worked out that NOT buying coffee for £3.50 for five days a week for a 48 week working year would allow you to save £840. It's too hot to work out how many years it would take to save even a 10% deposit for a £100k house, but it would be a long wait.

But you have to start somewhere don't you?

I'm self-employed so have no occupational pension to look forward to.
I started saving into a personal pension by investing just £20 a month as that was all I could spare at the time, with a mortgage and three children to support.
I index-linked the premium so it gradually crept up, and as my finances have improved I've increased the amount I save each month.

It's grown into a pot that I hope will be a reasonable supplement to my state pension?

I wouldn't dream of paying that for a coffee.
Unnecessary expense, particularly daily.

Good post Dickens and HousePlantQueen.
I find some of the posts on here quite smug. How many people through no fault of their own have found themselves unable to save. It’s not a moral failing.
It would only take an unforeseen disaster for any of us to be living in a precarious situation, savings or not. I’d rather live in a compassionate non judgemental society than an obsessively acquisitive one.

I worked out that NOT buying coffee for £3.50 for five days a week for a 48 week working year would allow you to save £840. It's too hot to work out how many years it would take to save even a 10% deposit for a £100k house, but it would be a long wait.

Yes, that was my point. It's difficult to compare now with the 70s and 80s but anything we could save went towards the deposit on our house, and you could see the total growing. It was tough, but it was achievable so we did it, like countless others. Coffee 'to go' wasn't available then, but if it had been I wouldn't have bought it as it would have kept the deposit out of reach, and we wanted it as soon as possible so that we could get married and have a place of our own.

For young people now, even in cheaper parts of the country you are looking at a minimum of £200k for a starter home, so they need to save £20k as a deposit whilst also paying high rent and student loans. I can understand the thinking that this is so far our of reach that it seems unachievable (and of course it's a higher mountain to climb in more expensive areas). Why not buy a coffee a day, or have a gym membership or nice soap) to make life pleasanter while you wait the many years it will take to save up?

For some people money is a highly emotional issue. Usually caused by experiences in the early days. Some folk feel they have to reject money and keep it out of their lives. Push it away.

They say no to it all their lives unless they find help in places like Debtors Anonymous where they will meet others who have lost it all.

There are grandiose debtors and pauper debtors. No one really understands this unless they have lived with someone with this awful condition.

They are viewed as wasters, greedy, lazy etc but the condition is as real as Covid or pneumonia. And it is possible to recover or at least to manage it. With effort.

There is absolutely no reason why not.
Except that others will judge it and you'll be found lacking in some way.

For me, I resent being put into the bracket of people who can even do that - a bit like those in Blackpool, spending their universal credit money.