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?

Sorry, ‘not replying’, that should say.

Three months isn’t long, especially by the time you’ve found new work and then gone through all the checks.

I always aim to have a years worth of living costs as a rainy day fund. I like the security it brings, even more so now I have children. I wouldn’t want to claim state benefits so need a good backup plan. Saving doesn’t have to be depressing and should be encouraged from an early age.

I'm with you OP, we don't have 3 months full take home pay, but we do have a bit.

We also have 2 really nice cars, various bits of jewellery and watches etc we could sell, and even raid the kids savings if times got tough.

We do have some savings of course, but I've just raided it to spend some money on home and garden improvements which will benefit us all in the here and now, and make the garden much more fun for the dc should we end up in another lockdown.

I try to strike a balance between future proofing / disaster planning, and making life fun for now. I'd prefer my dc to have a lovely childhood than a huge inheritance.

Having said all of that, I'm in a relationship and we'd need to be desperately unlucky to both lose our very secure jobs and not find others, I'm a HCP so I fully understand where you're coming from, even if I lost the use of my limbs there'd probably be a role for me on the 111 helpline or suchlike.

I'd try to save enough to scrape by of 6 .
months, so mortgage, bills and basic food (but not just beans on toast).

I know a few people who have unexpectedly wanted to take time out or cut their hours to help care for unwell relatives at end of life and their saving allowed them to do that.

But 3 months is still really good and if you're still saving why don't you put a percentage of what you're saving each month into a 'fun' saving pot for the house and the other percentage into the 'safety net' saving pot.

@Bluetoybox

Ha, I read that as £6m! 😂😂

sorry - posted too soon

What I wanted to say is maintaining your house is a very valid way to keep its value and isn’t a waste of money. It’s absolutely worth keeping it in good decoration and repair

There have been a few posts on here with the aim of showing the NHS to be overgenerous with sick pay (there was one yesterday). It makes me think the government will go after that next and are laying the groundwork.
I'm sure your unions will be all over it, but it's my impression from these MN threads.

[quote DoubleTweenQueen]@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)[/quote]
I feel like this is really good advice. Once you know what your priority is around the house then you’ll know that you can carry on saving half and spending half etc.

This suggesting your job isn’t secure probably don’t work in the nhs. Most NHS Trusts can’t afford to pay redundancy and there are so many nursing vacancies you’d always find another job before redundancy ran out. The main situation I feel you need to be prepared for is a child falling ill. You really wouldn’t want money concerns on top of that. Whereas new car/boiler there’s always credit (which if you’re sensible isn’t the devils routes mumsnet always paints it as)

I think having savings sounds sensible, we used to aim for 4 months worth of living but now since covid are aiming for 8 months.

Once we have that we may try and over pay mortgage or extra pension contributions.

This thread is not at all representative of the wider UK public. Most people have almost no savings, so I'm surprised how many say they have a year's salary or more. That's definitely not the norm (not that it's a bad thing, it's just a hugely privileged position).

OP well done in saving what you have. In your position I would now keep adding to your savings pot but more slowly - split whatever you have at the end of the month between a long term "emergency" fund and a short term "house" fund. Your day to day quality of life matters and there's something really encouraging about being able to see the fruits of your labour in your home.

4 years ago my husband lost his very secure job, mine suddenly became insecure. We aren’t big spenders, we were mortgage free, but it was a shock. We were fine, if a bit squeaky bum, but in the year before he got a new job, we spent bugger all and I built up savings. It became a habit.

I’ve got a years salary saved now.

But...you have to live, we’ve now got a mortgage, some of the savings are going on refurbs. I’ll still keep about 3 months salary in savings and build up again.

I’d say in you position, do your garden, it’ll give you huge pleasure.

Forgetting the fact your boiler might pack up /roof need fixing /car stops running.
I became seriously ill (worked in the NHS) first year was fine but then because it was clear that I wasn't ever going to be able to work again I was taken down the dismissal route (which took 5 months). At the same time I had to apply for my pension (took 7 months) and benefits (took 6 months for pip, 4 months for esa). It was a very worrying time, my critical illness cover didn't cover my illness. The one saving grace was that I had savings that got me through to being able to claim benefits /pension. Having a life changing illness, losing your Job and having to fight for pensions /benefits is hard enough without adding short-term financial worries on top. I'd always recommend having 6 months income to live off, you never know when life's going to throw you a curve ball.

We have a base rate of savings of 6 months that we won't go below, and a topped up rate of 12 months. The second half we can spend on anything without dipping below the six months mark, and in an emergency we'd go down to the three month mark.

You can't sell your house that quickly. It's good to have a range of options to hand.

Quick access cash
Unused credit
Overdrafts

Plus having all those things in good order makes going to the bank for a mortgage on a new property much easier too.

And if you sell your home you still need somewhere to live!

[quote Bluetoybox]@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.[/quote]
Blimey! No wonder the NHS is fucked financially! Not much scope for change to be made when those are the redundancy arrangements! Fill your boots OP!😀

I don't think we ever had that kind of buffer, similar jobs to you, but we did have no debt and lots of equity. I think you are fairly secure. Just think ahead to future expenses.

I'm a troublemaker (so, basically a woman with an opinion) so I always have a year of takehome in savings. Gives me enough breathing space to pay the bills and find a suitable job, rather than just any job. It's also enough to go on a holiday (well, in normal times) to give me a reason for taking such a long gap between jobs. 'Well, I wanted to go on this once-in-a-lifetime trip, here's a photo to prove it...'

My house is falling to pieces. I'd still rather prioritise the if-I-get-fired fund.

How much is enough savings blanket is so variable. Ours is 10k as an absolute minimum preferably 15k, this should see us through a year of no income at bare bones spending. Although the risk of us both losing our income is low and we'd manage ok on just one of our salaries.
We're now at the point where we have surplus savings doing FA and the house is in need of repairs so we will be spending on that next.

Always have three moths full living expenses saved. Always.
Or be striving to get there.
Most of the nicer things we want aren’t real. Money in the bank is.

I would be looking at the most likely what ifs such as serious illness of the children, so not losing your job, but having to quit and not being able to work for a time. 6 months is much safer than 3.

I saved hard all my working life. My colleagues mocked my basic but reliable car, my time spent hunting bargains, my shopping in Lidl, my do it yourself approach to booking holidays rather than going to a travel agent for an all inclusive and my determination to overpay my mortgage and get it all done by the time I hit 45.

We never went without and had the holidays we loved when we wanted them, but always shopped around and used coupons and money off codes. I was laughed at and told I was wating my time when my wage was good and my job secure.

I am the one laughing now. I was able to walk way from a job that was seriously too stressful and had taken over my life to the extent that I cried on the drive in every day. I can use those savings to support myself and give myself the luxury of time to bumble about doing all of the hobbies I could never enjoy when working. I did not have to wait until I was 67 to retire - I have bought myself an early, healthy retirement by saving hard.

I do wonder if the price for flashy cars, constantly remortgaging the house to put on yet another extension or replace the kitchen (again) will be worth having to work all of those extra years. It would not have been for me.

Savings = security, reassurance and good sense to me. But each to her own.

@singsingbluesilver

I saved hard all my working life. My colleagues mocked my basic but reliable car, my time spent hunting bargains, my shopping in Lidl, my do it yourself approach to booking holidays rather than going to a travel agent for an all inclusive and my determination to overpay my mortgage and get it all done by the time I hit 45.

We never went without and had the holidays we loved when we wanted them, but always shopped around and used coupons and money off codes. I was laughed at and told I was wating my time when my wage was good and my job secure.

I am the one laughing now. I was able to walk way from a job that was seriously too stressful and had taken over my life to the extent that I cried on the drive in every day. I can use those savings to support myself and give myself the luxury of time to bumble about doing all of the hobbies I could never enjoy when working. I did not have to wait until I was 67 to retire - I have bought myself an early, healthy retirement by saving hard.

I do wonder if the price for flashy cars, constantly remortgaging the house to put on yet another extension or replace the kitchen (again) will be worth having to work all of those extra years. It would not have been for me.

Savings = security, reassurance and good sense to me. But each to her own.

I suppose it depends on your outlook. Without being morbid, retirement at whatever age isn't a given, my friend was very frugal and often went without to save for retirement. She unfortunately didn't come close to being in a position to retire, and in her final weeks she didn't once say I am glad I saved. I suppose it's an insurance, and like a policy, you hopefully will need it and be able to use it, but might not. I think a balance is better personally. Getting a car that means ££££ repayments a month is rarely a good idea, but one that you enjoy driving is probably worthwhile to many.

I would aim for 4 months which gives you a bit more flexibility. Then spend a few months on some home improvements before going back to saving again. There has to be a balance between saving for the future and spending now.

3 months of bare bones savings isn't a huge amount. But you could split your savings from now on. Half to making your home nice, or other things like holidays, save the other half for the future.

You're probably quite young but in a decade or two's time you might be physically struggling, or be fed up of nursing or any other reason why you might fancy a change of scene and having a decent amount of savings behind you will give you options.

I'm currently in a similar position - very secure job with good redundancy protection but also very unlikely to be made redundant, but I'd like the flexibility to work part time, or change jobs to one that's less full on (currently has quite a lot of face to face presenting and talking to people and I find it very draining to have to be 'on' all the time), so I'm saving even though I don't 'need' to, but I still spend money if I want to, not that's there's really anything I want - most of my money usually goes on holidays and eating out.

The thing is it's not just about security of your job - what if something were to happen to you that means you can no longer work? Do you have a good enough insurance policy that would enable you to live off it and your savings?

My FIL had a major stroke age 45 and hadn't been able to work since. Luckily he had good insurance because even though he has paid in since he was 16, his workplace pension paid out a pittance.

I would aim for six months savings but do the remaining 3 months as 50/50 savings and house pot.

We’re also working at getting two months ahead in the bill account so there’s extra security there.

I also shove a small amount into a stocks and shares ISA for longer term security. I’m worried about what the pension future will look like for me so I want a secondary nest egg that can ease some of that burden.