How much money do you think you should ‘save’?

[Lookatmeimsandradeeee]

Posting for traffic

Just trying to do a revised family budget as a few things have changed in recent months and it got me wondering how much do people perceive they ‘should’ be saving each month? By saving I mean money you specifically allocate to be tucked away in an ISA or something for the future? £100 a month? £1000?

I know there is no right or wrong answer - I have a number in my head but I’m just curious as to what others ‘like’ to try and save monthly?

[CaseStudyResearch]

It’s a tough one because it obviously all depends on lifestyle.

DH and I earn a combined salary of over 100k and have fairly low outgoings - no kids, mortgage etc. But as we are saving for a deposit, we’re saving as much as possible. I’m managing to save about £600 a month on a 30k a year salary. DH is saving a couple of grand. Previously with living less frugally, it’s been more like 1-200 a month for me.

We have a financial planner who was really good at telling us to visualise pots for different things to save towards ie what does retirement look like, what does our future home look like, do one of us want the option of going part-time etc, which has really helped us to focus our savings.

[Yarnswift]

Depends what you’re saving for. Some into short term savings until you have whatever you need as a buffer and an amount you won’t miss into investments/long term.

I try to save about 40% of my net income. I don’t always manage it and if I don’t because something comes up I don’t beat myself up, but at least 1/3 gets saved most months. Any windfalls, bonuses or tax rebates go straight to savings.

[truthybeach]

I want to save for a specific purpose, home improvements. My goal is ideally is 10k in 8/9 months, however this will involve lots of sacrifice & budgeting which i’ve not ever done much off. Appreciate I am fortunate in that respect.

My question is should I transfer the money as soon as I get paid so I have to cope without it or do I see what I can scrimp by on for the month & transfer whatever is then left?

[truthybeach]

CaseStudyResearch Can I ask are you taking the money from your salary as soon as you get paid?

[FreckledLeopard]

I save 10% of my net salary and transfer it savings by standing order on payday. I also use Chip to save smaller amounts every few days. Windfalls, extra income etc tends to go into savings (but depends on what other financial commitments I have that month).

So much is dependent on an individual's circumstances.

[TeenTimesTwo]

Would working out your budget and then saving half of what you have left over after essential bills work?

So say you have an income of 2000, rent 1000, utilities, food and other bills of 600, and you have 400 left over for clothes, eating out etc, so you save £200 and have the £200 for spends?

[Lookatmeimsandradeeee]

Freckledleopard sorry if this is a daft question, but what’s ‘chip’? I’m off to google it, but I’m not very ‘tech cool’ so not very up to date on stuff!

[DownAtFraggleRock]

a pension chap once told us you should save 11% of your income for retirement, to keep the same standard of living.

[FreckledLeopard]

Chip is a really cool little app! I heard about it a few months ago. Basically, it's regulated and controlled by Barclays I believe. You download the app and link it to your online banking. It then monitors your account, your spending, when all your direct debits etc are due and then every few days, calculates a small amount it will save for you. If you don't want to save that amount, you can tell it not to. Basically, it saves smallish sums every few days - you barely notice it going out of your account - but it all adds up. I've saved about £180 since the start of February.

[KanielOutis]

I don't really save much at all. Maybe £50/mth. I have a mortgage and pension so figure the long term savings are in those. The monthly savings are just a buffer.

[DuchyDuke]

I save 50 percent each month and budget off the rest. Need to make hay while the sun shines.

[RunRabbitRunRabbit]

When DH and I started to earn enough to save something we had a goal of having the equivalent of 3 months joint salary in savings. It took a while to get there but it was worth it.

YNAB is a good app to help with that kind of plan.

[MissDuke]

We used to always make sure we had a minimum of 6 months salary saved but after moving house and doing a lot of work to the new one, we are down to about 3 months which is a big worry to me to be honest. Really need to get on top of it again.

[2018SoFarSoGreat]

It really depends on where you are in life. I am nearing early retirement age so saving 35% of my income. Financial planner just told me I need to add another 3k a month (amount of old mortgage) if I'm going to be able to do it in two years. It's sensible so I need to just buckle down and stop spending frivolously.

[Bobbybobbins]

We used to save quite a lot and now we don't!! With 2 pre schoolers in nursery it's impossible. But we are slightly overpaying our mortgage and paying over 10% into pensions so I'm ok with that for the moment

[Curious2468]

This is the kind of thread that really highlights the differences between those who have and those that don’t tbh. I’m 😲 at saving 1k a month because that’s nearly half of our income (1 earner). In an ideal world having a few months income saved is wise but for most people I know that simply wouldn’t be an option. We decided to use some extra funds we had to clear a small chunk off our mortgage which we can then use to skip mortgage payments if something major came up in the future. Everyone’s situations are so different though that I think it’s likely impossible to compare tbh

[TomRavenscroft]

I read or heard once that whatever age you were when you started saving, you should save that percentage for retirement.

I didn't start saving until I was about 35 (to my shame now), so put away that much, or sometimes 40%, of what I earn. It depends a lot on cashflow as I work for myself and have peaks and troughs.

[Firesuit]

Having a target for saving implies it's a chore to get out the way, then you can spend everything else. I've had an opposite philosophy for most of my life, I've spent as little as possible (subject to some minimum standards with regard to what I wanted in the context of housing and holidays) and saved the rest. I wanted to ensure that as soon as possible I could maintain my standard of living without working, from investment income.

During the 90's I had about ten years of little real saving, home in negative equity. Then I had 50% pay rise, and apart from moving to a bigger home (justified as I had just got married) I did not increase my spending. At some point in the following ten years I reached a position where investments could be viewed as covering bills, and 100% of my earnings allocated to additional investments, generating additional lifelong income.

I think you need some goals. How long could you survive with no income from not working? Save to get that up the 3 months, then 6 months, then a year. Having done that, work out what income you want in retirement and how much you'll have to save to get that.

[Firesuit]

I do know that not everyone can save, which is why I mentioned that for ten years I didn't, despite being on a high income. (Had a large mortgage at the start, then my income fell relative to when I took it out.)

[pitterpatterrain]

Freckled - thanks for the tip, I plan to download Chip

[WeirdCatLady]

It’s really an impossible question for anyone but you to answer. Incomings - Essential outgoings = spare. I don’t see how asking random people is going to help you. Unless of course you’ve got an article to write...

[summerisonitway]

For me, it depends on exactly what you mean by the term 'savings'. For example, we have estimated that I will need a new car in about 4 years and we have worked out how much money we need to set aside each month in order to afford a new (second hand) car. The money we save all generally has 'jobs' in that way - for holidays, cars, MOTs, insurances, Christmas etc. I don't really think of this money as savings as it is stuff that we are committed to paying for, it's just a matter of when we pay for it. We do also try to have an amount of money put aside for any emergencies or other things that may crop up.

[Rememberallball]

DH earns £30,000 and I’m on about £27,000 including management hours, enhanced hours for additional responibilities and covering others leave. We save about £500 a month each and DH gives me £500 towards bills. The money we save goes towards holidays, car maintenance and (at the moment) we’re having IVF so need to save for that. Later this year we will be moving and I will probably give up working as we will buy outright so only have living expenses, utility bills and no rent/mortgage. We are lucky as we plan to move from the outskirts of London to a much cheaper part of the country

[ReanimatedSGB]

I have no savings. I do not earn enough to save. There are a lot of people in this position.

[kissbeforelippy]

I also use CHIP and think it’s brilliant. Such an easy app to use and you are in control. I also use an app called Account Tracker by Graham Haley to keep track of our accounts. It helps me save if I can see at a glance where our money is going.

I read somewhere that you should have at least two months’ salary saved but realise that this is not always possible.