What would you do with these savings?

[DIYnovices]

I’ve got about 45k total savings. Holiday this year paid for. This year will be tight due to childcare and hiked up mortgage so although we don’t want to eat into savings for living only we may have to (max 2k).

I like to have a good chunk set aside for emergencies such as boiler repairs, new car (def will need one in the next couple of years) and obviously to save for the future. We have 3 kids.

I would like to get our garage converted to give us a bit more living space but quotes are coming in at around 20k. This would leave us with 23k. We really want to take the kids on a holiday next year so add in a new car and I’m looking at having 15k in the bank. It doesn’t seem much for a family of 5. We earn ok wages and expect to be able to put away around £400 per month into the savings account come September this year.

Am I being ridiculous or should we wait to decide about the garage until we are past this year and started putting money away again to see if we can actually achieve our £400pm plan? DH thinks we go for it but I’m reluctant to commit.

I'd save it for a bit longer until you actually start adding the 400 and see how it goes. Doing everything you want to do is not going to leave you with a lot for emergencies.

These are our joint savings, husband has no extra. Joint current income about 90k (before tax). I say ‘savings’ but this is mostly inheritance. For the last few years we’ve only put £50 per month away as most of spare our money is eaten up with childcare. This as about to end and no plans for any more kids.

This would include building and insulating a room, flooring, heating installed etc. I would need to decorate on top of that. We do have the furniture already.

Yes. Internal access already exists. Heating and wiring included in quote. First quote is for £16,800 but I’m getting a few. It’s not massive.

I was holding off on the car. Hoping it can last another couple of years and then there might be some more affordable electric or hybrid cars for sale which would reduce running costs.

I'd put 20,000 each of you in the highest fixed rate ISA you can find for a year - probably about 4.2 % . Or if you can afford to for 2 years. That'll earn you about just over 1700 in interest over the year tax free (if you do it now) by end of next March or £3,500 by March 2026.

Then put the rest into the highest interest account you can find and add your £400 a month to it every month.

By next April 2025 you'd be almost £5000 (in total) up and by April 2026 you'd be almost £12000 up. You could take that 12000 then and keep saving.

What would I do? I'd make sure I have six months salary for both of us saved as a cushion and only after that would I consider spending.

I'm aware not everyone is as financially conservative as this but to have no significant savings if I got sick and couldn't work, dor example, would be awful.