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?

I posted on the other thread about savings
I have separate amounts

One amount that I don’t touch but I will add to as and when - it’s my fuck you money 😂 it’s a large amount and enough to say a reasonable fuck off everything for at least 18 months -2 years and I’ve kept that amount for at least 15 years. I don’t really think about it .

Then I have two separate smaller amounts one in cash in the the house of around 6k and one in the bank of around 4K .
The 6k will go up and down a bit I use that for stuff that I want to buy that aren’t necessary Or unexpected bills. When it gets to 10k I will take 5k and put it with my fuck you all savings 😂

Because of my savings Covid and the lockdown hasn’t affected me at all money wise
But I can appreciate that I’ve been very lucky to be in this position .

I think it's worth considering the 'whatifs' just to make sure you are comfortable. So what if you were fired tomorrow, gross misconduct. (You didn't do it but can't prove it). You pull DD out of nursery but they have a notice period and that eats into your savings - now you only have enough for two months of beans on toast The bad publicity makes getting another job harder - what next?

Well for me I'd be thinking can I take a mortgage holiday? If I sell up is there equity in the house? In an absolute worst case scenario would we be out on the street? No, we are fortunate to have several family members who could and would take us in. Therefore, for us, 3 months savings is probably enough. (Personally I would save enough to cover nursery fees for 3 months too - hard to job hunt without childcare)

How long will your DC be in childcare OP? Will she be in school soon so you have that money free?

My wages are roughly 1/8 of yours at the moment, but I’ve got lots of different saving pots. I’ve separated it out into long term savings and sinking funds. My LT savings are largely in premium bonds, but I also have a plum account. I never take out, only add to my bonds but my plum account is where I take money from for unexpected ‘big’ expenses, like I had the opportunity to buy a car for £150, so I took it from there.

My sinking funds I keep mostly in Monzo pots, I’ve got several - car, Christmas and birthdays, school, beauty, things like that. I operate a zero based budget and pay into savings in some form via DD or standing order monthly. Any extra money I get, be that selling on eBay, profit from shares, profit from selling my other car, birthday money etc is allocated to a pot or a purpose on the day I get it. Pre pandemic, I set my
Monzo card up to send round ups to a specific pot as well.

My DP thinks it’s convoluted and silly, he just has one account and that’s it, but he never has savings and it’s always a scrabble to find money if something comes up for him.

That was all a really long way of saying, I know you say you don’t have much to spare but could you split what you do? Some to long term savings and some to house etc?

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.

That's not the goal though. The goal is to save whatever you'd need to survive under the exceptional circumstances under which you have somehow been fired from your job without paid notice AND were unable to find a new job - even a part time one at a lower salary - within a reasonable period of time.

The idea is to have an emergency fund not a sabbatical fund, after all

I’ve been asking myself the same thing lately, OP.

We were saving to buy a new house with a £150k deposit. Sale fell through and we ended up moving to a house I inherited but had never planned on living in. It doesn’t need any work but was the wrong location for us but we’re now WFH full time so it works.

We’re both on high salaries, secure jobs, long service (so redundancy would be decent, if it came to that), great pensions/illness benefits etc.
we live really well on one salary, and save the other in full. Generally have a really nice life with plenty of luxuries, but our costs aren’t excessive.

House deposit savings pot is increasing every month but sitting in a savings account and earning no interest.

Half in mind to keep £30k as an emergency buffer, and blow the rest on a shitload of plastic surgery, and loads of puppies. Do something mad and stop being so sensible for once.

Having savings shouldn’t be depressing. If a year is too much can you aim for 6 months living expenses? Honestly the security of having a buffer should ‘the shit ever hit the fan’ is much better than new stuff.

I’d split the difference OP. Of your discretionary income, spend half, save half. Keep building your pot, but growth will be slower.

We could live frugally for about two years on our savings. I can’t tell you how much peace of mind that brings.
But you seem to want permission to stop saving which is fine you have to do what you’re comfortable with and only you know what will make you happier saving or house improvements?

I'd want more than 3 months expenses before I stopped saving and spent spare cash - unless the car needed replacing or I needed expensive dental work or something. I also kept DS in nursery when I was made redundant last year, to keep his place and my sanity!

You could set up a separate house pot and stash half of what you're saving in there?

So you have security of up to 1 year (although half pay for the 2nd six months - would that cover your essential bills?) if you got sick - what if you get so sick you have to stop working? What if you are sick in such a way as it's expensive - being sick/disabled can be expensive

I have about 3 months living expenses if I lived off beans on toast and pulled DD out of nursery

1 - 3 months isn't that long! Especially in the current employment climate, and this is likely to get worse

2 - what if you get sick/disabled and need your child to attend nursery to give you a break?

Do you have critical illness cover? Life assurance? A will? More than a basic Pension?

as long as I'm prepared to keep nursing which I am

What If you COULDN'T keep nursing? I was a nurse, I left for other reasons but even if I hadn't I'd have had to quit a ward role at least around 18 years ago due to splitting from ex and any role around 15 years ago due to ill health

As a nurse I'd expect you to know you never know what's around the corner. Plus many hcps get injured on the job and have to leave.

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?

True

I'd say 3 months of enough to actually properly cover the essentials - so not living on beans on toast etc is the absolute minimum

6 months is the ideal - again actually enough to cover 6 months

I'm now disabled and on benefits so sod all savings! But that's another reason for 6 months cos it can take that long for benefits to be running smoothly

With a secure job I think 3 months’ worth is okay, but I think you should top it up so that it reflects 3 months of actual expenses. A lifestyle of beans and no nursery is not realistic.

What makes you think you would get a years salary for redundancy? Everyone I know in public services gets pretty much the minimum when there are redundancies due ti restructure etc.

@korawick12345 That's what the policy says, 1 month full pay per year of service up to a maximum of 24 months, I have 17 years so would get 17 months.

I'm not trying to seek permission as such, more that I am trying to decide for myself what is best and taking on everyone's different perspectives is interesting but I think once you get into all the 'what ifs' suddenly nothing feels like enough and I don't have the luxury of earning the kind of money that allows me to save up huge amounts easily. I'm saving what I can now but it's hard to have so many things I'd like to do as well as have savings so whilst it's so good that so many of you have made the commitment to have those savings, I just cannot see how I can achieve the same kind of amounts without living excessively frugally for years to achieve it. I currently make exactly £595 more than I need to cover my mortgage bills and childcare, that needs to cover food, fuel, anything DD needs like clothes etc and savings. I'm currently saving £230 there or there abouts each month which is not nothing but is also not much at all. Childcare is my biggest expense by far at £830 a month so things will definitely be easier in a few years but as she's only just turned 1 it's a long way off and I'll always need some childcare at least as she'll need wraparound care as well once she's in school. But hopefully that won't be as much as it is now.

I like the idea of keeping saving for now to at least get to a full 3 months salary emergency fund as that would cover longer if I had to make it last, especially if this hypothetical emergency happens after I no longer have to pay full time childcare. But after I have that I think I like the idea of splitting my savings so that some goes into that slowly but some also goes into a separate pot for savings for the house.

I feel like this; my job is about as secure as it’s possible to be and we have worked out that if either DH or I lost our jobs then we could live on one wage (just about). We have a little pot of savings in case something bad happens to the house and we have life insurance and critical illness cover so I’m ok with now Using the money we have to do things or save towards holidays etc; I don’t want to be saving for the sake of it and not enjoy life which would be the reality for us as we don’t have a huge amount left at the end of each month

My savings give me huge peace of mind. I'm feeling really burned out in my current job, so it's my fuck-you fund for when I reach my limit. I'm dealing with a health problem the NHS can't treat so I'm paying for private physio that keeps me working for now. It bailed us out when my DP was seriously ill abroad and we had to pay all costs then claim thousands back from travel insurance. In all of these situations, I've not had to scrabble for cash, knowing that it's there.

I live frugally to make sure I have savings but in our situation, it keeps the stress levels down.

I invest seperately for long term savings but keep my emergency fund (with other short-term savings) in an offset mortgage savings account, so it saves me mortgage interest.

Why not leave savings and start to save separately for the house improvements ? Also spend a day checking all outgoings

You deserve your treats and nice home
And I’d still leave savings intact
You never know

Another option is to look at insurance. We have some savings but we also have further piece of mind through various insurance policies which will cover the mortgage and living expenses in the event one or both of us become ill or are made redundant. This is covered by a fairly small monthly cost and releases more of our monthly income for spending on the house, holidays, whatever. Life is very short, I would find a way to maximise your enjoyment of life NOW.

@Bluetoybox Keep your savings.

List all the jobs/decorating you want to do in the house in order of priority and what would make you the happiest

Work out what you can do yourself and what you might need a professional for.
Put feelers out to friends and colleagues for recommendations for the professionals

Get quotes or otherwise figure out how much roughly you would need to spend to do the jobs

Anything you can do yourself, look out for special offers at the dot stores - they usually do these at bank holiday weekends

Get colour charts and make mood boards for what you want

You're in a very strong position, financially, but keep your 3mnth pot, and save and then spend to do up your house
That's what I would do anyway.

(This reminds me of the house Vs classic car thread)

*dot = DIY

A qualified nurse is about as stable as a career gets, even if the NHS automates nursing as a PP said and makes redundancies (ridiculously unlikely), plenty of better paid alternatives outside of the NHS!

I would say if you have stuff you want to do/buy and aren't spending for the sake of it, go for it.

I forgot to say - if you build a really good idea of what you want you'll be ready to move on bargains when you come across them, that's all

I've got a couple of months of costs saved up. I did have twice that but we decided to overpay the mortgage. Dh is 10 years older so closer to retirement and wants to be mortgage free by then. I'd like to retire early - or at least get a less pressured job. We have contingency plans on top of a few savings and would ultimately sell up, downsize and rent until we could find new jobs. We have quite a lot of equity in the house, so although not ideal it would get us over a bad patch.

I guess you are in a fairly steady position as a nurse, but all sorts of this go wrong.

What if the country went bankrupt? (not hard to see with the current level of spending)

I guess you might still be ok as a nurse, but what if you were sick at the time and the government could not fulfill sick pay commitments. Might be going a bit extreme there, but I can definitely see situations even as a nurse where you would need emergency money.

I have 3 salaries saved and overpaid the mortgage for the next 2 years (mine allows me to just call and ask for the overpayment to be used as mortgage payments).
I wanted/needed to buy new furniture for a two bedroom flat, I did overtime and saved £3000. When it came to actually buy it, I put it all on a 0% credit card that I paid within the 2 years required, but I used money from my salary, not the savings. I knew I had the money to pay it if it came to it. Can you do something similar?

I think lots of people replying on here are sensible and cautious, but lots will also be high earners. You’ve got a good start with a buffer, more than lots of people not relying, or not on Mumsnet, have! How about saving half and spending half from now on? Or allowing yourself a three- month saving break, say, to do bits around the house?