Money question I can’t ask friends

[Tewqk]

i read today that everyone is advised to have 1k savings to weather any storm that may come soon. I don’t know how 1k would help. I have 7k savings, single mum with maintenance of 550. I am thinking of trying to save 200 a month but it feels pointless given the extent of expenses at the moment, 200 a month won’t fix much. Is 7k reasonable? Is it too low? For context my mortgage is 890.

They tend to say 3 to 6 months' worth of basic spending. I've been between jobs many times, but never longer than 2 months so for me enough to cover 2 months is enough.

I think that's a lot TBH. How long could you last on just the 550 income if you needed to with those savings?

Agree, 3-6 months of bills and living expenses.
In Australia it takes that long for income protection insurance to kick in in case of illness or injury. You need to be able to support yourselves until then.

That figure seems quite reasonable.

As a single parent if you lost your income then you would qualify for some benefits. If you have more than £6000 saved it affects how much (up to a maximum of 16k when you get nothing)

Trying to up it a little to feel more secure of just putting it away in a different pot to cover Christmas car etc so you never have to dip into that other than dire emergency is sensible.

You might be better to focus on budgeting rather than saving. The mse webpages have good templates which include expenses like car maintenance within the monthly budget.

If you are saving for something specific like you know the boiler needs replacing then that's slightly different to 'back up' saving. If you up this too much you'd be expected to use it first in the event of job loss

I just feel worried I will lose my job to be honest. That’s my main concern.

the mortgage feels high but there’s nothing I can do about that now

Would it be best to keep my savings with family instead so it doesn’t go over 6k. When calculating 6k does it include any debt? I have 4K debt

So you have savings of 3k then. How much does your 4k cost you a month?

Why lose your job specifically? Employment is high and this is an important variable in economic cycles. Are you in a sector that you consider may get hit?

7K is fine by the way if it’s 6 months income.

Unless the debt is interest free, I'd clear it and keep 3k savings.

What's a reasonable amount of savings depends on many factors.

There's no point living like a monk and building up thousands in savings, conversely its irresponsible to spend every penny you have if you have spare money you could save.

Definitely pay off debt if it not is interest free.

If you are concerned about job loss and being required to live on savings instead of claiming benefits you could overpay your mortgage instead of saving and of you do lose your job you'll be entitled to benefits and your mortgage will be smaller. Plus some mortgages allow you to count previous overpayments towards future repayments if you need to take a mortgage holiday.

But for an overall guide to 'what to do in what order' have a look at ukpersonal.finance/flowchart/

Wouldn't that be benefit fraud? I wouldn't do that.

@BarbaraofSeville do NatWest do a mortgage holiday like that? I’ve only overpaid 100 a month for a year though so that’s only one repayment I guess?

@BarbaraofSeville thank you for advice xx

@SweepItUnderTheCarpet maybe but I haven’t lost the job yet so thinking in advance ..

Save whatever you can, comfortably. We are in for a rocky year, possibly two, and you don't know what might happen. Having a bit extra is no bad thing.

@Qik its highly paid and everyone is worried. I guess I could certainly try and get a lesser paid job

Don't know, ours is with HSBC and doesn't work like that but it's often mentioned on here as how it works, so it's a case of checking your own arrangements.

Where did you read that? The normal advice is 3-6 months of expenses in savings as PP have said. That will help if you should have an accident/get I'll/lose your job. £1000 won't go far at all - but I suppose for some even £1000 in reserve sounds like a fortune.

If you don't mind being investigated for benefit fraud then yes go ahead and do that.