Are you committed to your saving and spending?


   5 min read

Here’s a brief look at how your spending and saving could affect you now and the decisions you might need to make in the future.

The demands on your finances will change over time. Your life changes, priorities shift and lifestyle can play a more important role. In turn, this will affect how you feel about saving and how you save. It could be a constant juggling act with what to do with your money.

Master your spending

Spending less to save more isn’t a new concept. Spending the money you earn allows you the lifestyle you want or simply just need. Spending isn’t just about the luxuries. Some economies are easier than others. Everyday essential spending like childcare, energy bills or commuting costs places constraints on the money you'll have available. It’ll also impact on your place and ability to save.

Try and maintain a commitment to addressing your spending over time. Regular budget and spending reviews are a good habit to get in to. Of course these are not always possible due the demands on your time but they can focus your financial commitments at important times – like buying a house or a growing family. When you review your finances, look at your lifestyle too, and what’s driving your spending and for what purpose.

You might find our article It's time to talk about money useful. You can also find help in our budgeting guide.

Your lifestyle and quality of life

If your lifestyle is holding you back from saving in to your pension then it could have an impact on you later on. By not saving enough, your lifestyle now could affect how much you end up with in your pension.

Not having enough money saved could affect your ability to spend for a quality of life when you retire or stop working. When thinking about saving, think about the lifestyle you want in the future - even if it feels far off. If retirement is getting close, tailoring your spending to what you think you might get as an income is a good way to prepare. Not everyone will be able to afford the same lifestyle in retirement.

Flexibility in your saving

Getting on top of your spending to support your lifestyle gives you an opportunity to look at how much you save and when to save. Saving needn’t be inflexible, it’s able to adapt with you and your lifestyle as you look to prepare for what lies ahead.

Starting to save early on could give you a chance to reach the quality of life you want. But what happens as things change? Saving more when you can means your pension savings are able to adapt to the unexpected. If Coronavirus has taught us one thing – it’s that you never know what can happen to impact your finances.

If you can, saving more in the lead up to planned additional spending could reduce the need for any drastic spending decisions. And when you think about lifestyle and quality of life – saving more in the lead up to retirement could mean you’re able to work less or start to be more flexible around working.

It’s important to remain committed to your pension savings as things change for you. You will need to keep an eye on your pension limits along the way. With your pension, you’re also still invested. The value can go down as well as up and you might not get back what you put in.

What about your other money?

At any time you could end up with additional money. This could be an inheritance or a performance related work bonus. If that happens, this starts to play a role in your commitments to your saving and spending. Naturally some extra cash could ease short term constraints on your financial commitments in your lifestyle.

If you’re counting down to retirement, this could mean re-looking at your plans. Putting more in to your pension could bring forward retirement or adjust the quality of life you might want. Likewise if you’re closer to retirement it could also change what you want to do with the money you’ve saved – like taking less cash out immediately.

By finding yourself with additional cash it could also mean a delay or even a stop to plans for using equity release. A delay to taking equity release might mean a recovery in house prices and an increase in your assets.


The right financial advice

When it comes to plans for your money, whether it’s your house or pension savings, the right financial adviser is best placed to understand you and your money. Their knowledge of the market means you will get the right product.

As your life changes the proactive support they can give you will help you and your commitment to your savings and spending.

You can learn more in our article The value of financial advice