Is it really worth having so much in emergency savings when you have good job security?

[Bluetoybox]

I work for the NHS and my job is secure.... Not a 100% guarantee of course, but about as secure as it gets. I've also worked long enough that I have full sick pay entitlement (6 months full pay, 6 months half pay) and in the unlikely event that I was made redundant I'd receive over a year's salary in a redundancy package. I'm not planning on doing anything to get me fired and of course as many who know the NHS will know, you have to pretty much murder someone for that to actually happen so again, not really something I am anticipating being an issue.
I've finally cleared all debt apart from Mortgage and am now building an emergency fund. I have about 3 months living expenses if I lived off beans on toast and pulled DD out of nursery. There are things I'd really like to do though especially to my house which could do with a lot of TLC to make it a nicer home for us. AIBU to think, especially with the interest rate as it is, it's not really worth plummeting lots of money into savings when I could be using it to make my home nicer and increase its value which in a true financial emergency would probably help me more anyway as I could sell my house if I absolutely had to.
I know this year has taught everyone we need to be more financially smart but does that alwaysean having money just sat there doing nothing?

To be clear, I don't mean to spend my current savings pot, I just mean to stop saving into my emergency fund and start saving for other bits instead.

Interesting...hope to be in this position next year. Following for opinions :)

Is any nhs job secure though? Or is it just until the next batch of costcutting measures?

DH and I are on v high income and have good job security, lots of equity in our home etc. We always have 6m costs in savings. Always.

We are pretty risk averse though, generally.

Keep the three months' savings; moving forward spend half on the house; save half. Obvs the house money may have to stack up a bit.

Have you got critical ill health insurance?

How's your pension? DH and I have secure jobs and good sick pay etc but we still save a combination of long term S&S savings and shorter term 'fun' savings for holidays (hollow laugh) and house stuff. All are accessible for emergency situations but since we could live on one salary that's unlikely to be needed.

I would say very important for the next few years. We are in a period of suspended economic normality because of COVID (and Brexit). Its going to get rougher.

I'm a nurse. Even if they did cut staff from the chronically short staffed service I work for, I wouldn't be made redundant, I'd be relocated to one of the many other chronically short staffed services. It's not a guarantee as I say but it's not at all likely that I'll be out of work as long as I'm prepared to keep nursing which I am.

@NoIDontWatchLoveIsland

DH and I are on v high income and have good job security, lots of equity in our home etc. We always have 6m costs in savings. Always.

We are pretty risk averse though, generally.

I read this as '6 million' in savings to start with!

What we’ve learnt this year is that unforeseen things happen! What happens if you need more than a year off? You have nothing beyond that. What if you need time off because (god forbid etc) your daughter gets sick, and you need unpaid leave?
It’s the things we really don’t see coming that you need cash reserves for

My pension is good. I don't make additional contributions but I work full time and always have done with the year out for maternity leave the oy exception so my pension is fine just bumbling along. I do have critical illness and life cover.

@Juliesipadwillcallyouback so did I

I'm in the same position as you. Have been saving like mad and got to the point that I could manage for about 6mths and have some money left over if the worst happened. Would really like to get my garden done with the extra. I'm too scared to spend it but then I'm not sure what I'm saving for? The kids to go to uni? It's always the slog without the reward at the moment. I'd enjoy having the garden done if we don't get away again this year (teacher- long holidays). Money in the bank never feel like enough and doesn't give me any pleasure.

Savings makes me feel secure.
It is a balance I think.
Homes need maintaining and can be a bottomless pit if you want constantly nice things.
I grew up in poverty and spent my early adult life being really crap with money.
My savings reduce worry.
I know that I can replace my washing machine, fix a roof or buy a new car without a concern.
That feeling gives me more satisfaction than a room make over.
I do spend money decorating and repairing, but in a conservative way.

Losing your job or getting ill aren’t the only emergencies.

What if your boiler breaks, your car breaks down and I don’t know, you get an unexpected massive bill?

Whilst I do think 6 months emergency fund is massive, I would be happy with 3 months and then use extra money for other things.

I would say make sure you have 6 months' worth of costs first. It's not just in case you lose your job - what if...

you needed a new car at short notice
you had a large house repair bill
you or someone in your family fell ill and you wanted, for example, a private scan or consultant appointment to speed up a diagnosis?

3 months of beans and toast and no childcare costs sounds a bit unrealistic in terms of emergency savings TBH

In an ideal world, I’d have a years worth of of living costs at all times. I know that might seem extreme but I desperately hate feeling financially insecure. One thing that shouted at me from your OP was that you could survive three months on beans with no childcare, but in the event of there being a catastrophe that would mean you needed to access those savings, wouldn’t nursery be even more important for your DC to limit the impact of the upheaval? Could you not aim for six months of full budget savings?

I second the question about critical illness cover. Mine covers my DS for the 8 major childhood illnesses as well, and the woman I spoke to pointed out that if a child does get horrifically/terminally ill, parents/a parent doesn’t want to or isn’t able to work due to medical commitments etc. It terrifies me but it made me realise how important it is.

3 months' living expenses isn't much if you think about what could happen, how quickly you could be in trouble and given you'd be in a position where you were in difficulty, something must have happened to you or one of the kids to mean you couldn't work, so you'd be either physically or psychologically not in the best state at that point to have to sell your house. I would aim to get to 6 months' living expenses and then change focus to saving for your house projects.

@Bluetoybox

I'm a nurse. Even if they did cut staff from the chronically short staffed service I work for, I wouldn't be made redundant, I'd be relocated to one of the many other chronically short staffed services. It's not a guarantee as I say but it's not at all likely that I'll be out of work as long as I'm prepared to keep nursing which I am.

I still wouldn’t be comfortable letting go of your safety net. I believe there’s going to be strategic level transformation programme to try and create efficiencies - just on the basis of how many nhs related transformation job roles are being advertised. Covid may push certain services into automation earlier than anticipated. But I guess that just depends on your speciality.

I wouldn’t be happy with just 3 months savings . What if something happened to your child and you had to give up work to look after them? There are too many ‘what ifs’ ?
I would save at least a year’s buffer if at all possible. You can’t possibly know what the future holds. I’m sure there are lots of people who are fecked now but could have had lots of savings if they had been more sensible with their money.
Jobs, health etc aren’t a given!

Don’t underestimate the security of having enough money to cover most eventualities. Knowing you can pay for something if you Need it is 10 times better than buying something just because you want it.

I suppose that's the hard thing though isn't it... You could easily say that whatever you have is not enough because there's always something worse that could happen, as people have said; a boiler or car breakdown, a serious illness, a comet landing through my house. So when is it enough and when do you actually say you're now ready to start using some money for other things to enjoy life that little bit more? I am talking about very conservative things here. After childcare and everything I can only save a few hundred a month so I'm not talking a total house makeover, but my house is a 1950s ex LA house with artex walls and doors that have gaps big enough to slide a cup of tea u fed them. It would be nice to slowly, bit by bit save for a room to be replastered or a new door one by one rather than funnelling ever penny into a savings account just in case. But I'm genuinely asking. When do you decide you have enough savings?

I've got a year's salary saved.
It's in case I lose my L. A job (I've got a difficult personality, so never expect stability).
Also if partner leaves me and daughter or dies I will be fucked so best to have something right?
Who knows?

To save a year of expenses just feels such a dim and distant goal! In fact I just did the maths... To actually save a full year of my take home salary, deducting what I already have in savings would take me 80 months to save! Over 6.5 years! That just feels so depressing a goal to have.

We've just finished replenishing our savings account since I went back to work after mat leave. Now it's done (6months) we are saving instead for house stuff.
We have life insurance and critical illness too in the event work don't honour their policy or as pp said if dc got sick and we couldn't or didn't want to work.

We met a financial adviser and his view was to cover these things first - it's alright saying you could sell your house but that's an absolute last resort, and the last thing you need to be doing in a crisis.

Your home is an investment too - granted - and you will benefit from investing in it longer term but, in your shoes I'd get some more savings aside first. Interest rates could go through the roof for all we know - the next couple of years are unpredictable.