How much is enough? Please help!

The more detailed financial fitness calculator linked from that page is good, as well as the emergency fund one - gives you more detail on your current commitments and the possibilities.

Savings of £18k is great - well done.

Now you've got into the habit, keeping it up will get you into an even better position - but you can definitely ease your foot off the pedal and do some fun things too.

You shouldn't think about stocks & share type investments for your emergency funds. The market is volatile, and the whole point of an emergency fund is that it's available to use immediately in an emergency - not just when the market is up. So keep that part in cash, in a high interest account - either instant access or a notice account that lets you get the money immediately but with a penalty on the interest payment. At the moment there are good rates on cash ISAs, but they only have an advantage if you'll be getting more than £1k a year interest- if not, there's usually a better rate available on an ordinary savings account.

Usually the recommended amount for an emergency fund is around 6 months spending, but you may want a bit more if your employment is at all unreliable.

Then plan for any known big spends coming up - expected car or house maintenance, fixed rate coming to an end on mortgage or 0% credit card.

What's left over after that is what you can think about investing with. Stocks and shares ISA (you can have this as well as a cash ISA, as long as you don't put more than £20k a year into the 2 combined) or pension (or both). At 38 there's still just time to open a LISA, which gives you a hefty bonus on savings of up to 4K a year (deducted from your £20k total ISA allowance), but locks the money away until you're 60.

How about taking the amount you've been saving every month up to now, and splitting it into 3? Use 1 part for pension (you save tax on money that goes into this, so the pot increases faster), 1 for other investments, and 1 part goes back into your spending pot.

£18k is a very healthy amount - it's equivalent to at least the net annual salary on min wage. It's more than enough to cover unexpected household expenses, car repairs etc. and if you were to lose your job, it would give you plenty of time to find another one. Well done, and allow yourself some treats but keep saving - the time will come when your savings could be the difference between retiring when you want to or having to work till whatever the pension age is in the future.

I think it’s a great achievement! As it’s your safety net, I’d definitely not invest it. Investing is always with a longer-term view, not for money that might need to be accessed at short notice. Assuming you’re taxed at 20% you can earn £1000 interest-free before paying tax (at 40% it’s only £500) so you’d have to work out if a cash ISA is paying better returns than an easy access savings account. Bear in mind that in a lot of ISAs you cannot replace what you’ve taken out without it going against your allowance - some do offer that feature though. Any additional savings you’d be able to split between a cash ISA and S&S ISA if you wanted to, sharing your annual allowance. If you haven’t paid into an ISA this tax year you could open one now (I.e. before the new tax year) and pay in what you want so you have the full allowance next year.
I would definitely do the things you’d like to do with your DD this summer! Well done again.

Work out your expenses and put your numbers into this calculator and see if you are still worried.

https://www.hsbc.co.uk/financial-fitness/emergency-fund-calculator/

Me, too!

OP, your friend's a twat and you're doing great.

Your friend probably doesn’t have any savings and is being p.a.! I think £18k is a really good chunk of money. I never have more than £1k-2k in my savings account - I’m terrible with money.

But if you are paying off debt that will soon end you will naturally be better off.

You could continue to save a small amount anyway so it will still go up, even if not at the same rate.

Why don't you make a new budget? Allocate yourself a certain amount of fun money each month and use the debt repayment as holiday allowance once cleared?

I find different levels of savings lots handy. Some is in two year ISAs which do have an option for a couple of withdrawals up to a certain percentage without penalty.

I also have a savings account which pays more than 5% and allows unlimited withdrawals but the rate only applies up to 5k.

The latter is for car repairs, house stuff if needed so is more every day saving than 'not to be touched ' savings.

If you've managed to save so much and repay debt then there is a happy medium to be had of a bit more enjoyment and a increasingly savings which if you have them in decent accounts should gain a bit in interest too.

I don't think there is any perfect amount. £18k would pay my expenses for about a year, so I don't think it is small at all. I don't think many people have £50k sitting in a bank, as most people would put it into a pension or overpay the mortgage, so I think your friend is talking out of her bum.

I would say a safety net is a sum that would see you through if you suddenly lost your job and had to still pay your mortgage/rent, bills, food and other expenses. It will depend on the type of job you have and how easy it would be to get another with a comparable salary. If you are on minimum wage, it would be relatively easy to find another minimum wage job. If you were a high earner in a niche field it might take longer to find something that pays the same.

It would also depend on what other things you have in place, eg. Some people might have mortgage insurance if they lost their job, so might not need as much in cash savings as the insurance would cover the mortgage repayments until a new job is found.

Some people have very small savings because they have funnelled all their spare cash into a pension, ISA or buy-to-lets or whatever. Some people have huge savings pots but no pension. And some people have mountains of debt and 2 pennies down the back of the sofa. I think £18k is a great safety net.

That is the most BS comparison ever!! The U.S. stock market is up on average just under 10% for the last 100 years!! There is literally no better place to have your money.

Well this isn't true, and is why you should be careful of taking financial advice from randomers on the internet. Cash ISA returns have now beaten stocks & shares ISA growth for the past two consecutive years - source here, and cash ISAs have no risk unlike stocks and shares.

@Grounded03 I've heard people say that too, but while I think it can apply for salaries, I can't see the benefit in discussing specifics on your bank account. Especially with the internet, you can have knowledge and be informed on finances without having in depth discussions with your friends.

A normal one is close to useless. I'd recommend just stocks and shares.

A cheap place to get an ISA and a cheap fund is Fidelity. Don't use hargreaves lansdowne or your bank. They're generally a rip off with charges!

38 is ok! Do some reading online about ISAs on like moneysavingexpert or something . Investing will help secure your financial future!

£18k is an amazing achievement and higher than most people have. Don't put any stock in what your friends says.

You really should consider putting it an easy access stocks and shares ISA. How old are you? If reasonably young, I'd consider putting it all in an equity index like the S&P. You have a 20k allowance a year to put in your ISA.

The one rule is to invest invest invest. The rich are rich not because they save but because they invest whatever they can.

I have £3k in savings and it’s the most I have ever had! £18k is a brilliant achievement. I disagree with the other posters saying not to discuss money. Men discuss money all the time and there is such a lack of knowledge /embarrassment in many women’s financial knowledge. My mum’s confidence and lack of expertise in this area is not good and kept her in an unhappy marriage. I think it’s really important to normalise these conversations among women. But don’t be disheartened by your friends. I don’t think many people have £50k in savings at this stage in life!

We have 3 dc and 2 adult incomes. Savings are 28k with 4k in interest free credit card (itching to pay it off but we earn interest on the savings so makes sense not to rush). Those savings will drop significantly when we buy a new car. My absolute minimum in savings is £10k but I’m happier with £20k. If I had £50k I’d go on more holidays 😂 life is for living and it’s about balance.

Honestly I’d say a good safety net is a couple of months income which you more than have! Comparison is the thief of joy - please be proud of yourself and don’t worry about what your friends have or what they think. You are doing a fabulous job providing for yourself and your daughter.

Well.done OP I think that's a.really good amount. Honestly I'd ignore the "friend".- but I would not mention this to her or anyone else again. No good comes.of giving details of personal finance.

I’d probably keep saving, but save 2/3 of your current amount and use the remaining
amount for treats.

Don't ever talk about money to friends.

Hah I've got 200 quid

It totally depends. DH and I both have public sector jobs, 6 months full pay for sickness, and additional critical illness insurance so I don't feel we need a huge safety net (also no kids). If we were self-employed or in an industry prone to redundancy I'd want more in savings. You should be very proud of what you've saved. The lessons learned here are not to share financial information with anyone, and that no matter how close a friend is, they'll still try to piss on your chips if they think you're doing better than them.

You’ve done amazingly well!

I would going forward have two savings accounts or more - fun stuff, holidays, days out, Christmas.

That way mentally you aren’t spending your savings.

Six months of expenses is generally considered a prudent safety net,