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?

We are very lucky that we both have well-paid, reasonably secure (but who knows) jobs and our mortgage was paid up a long time ago. Just us two in the house.

We have saved over a year's joint earnings based on how we live NOW. If we cut back then that would probably last quite a lot longer. And of course, the balance in value of the house as well would help if we downsized..

We've spent quite a lot on the house in the last 12 months but that was money we didn't spend on holidays so not out of our savings as such. Two holidays we had already booked, and had refunds when they were cancelled so used that money.

We will keep on saving as long as we can I suppose

And as I said, I know we are fortunate.

Nobody can predict the future

Therefore there is always a need for savings

I thought I had a secure job, but I was made redundant before covid appeared

There are relationship breakups

There are illnesses & deaths

What about retirement when you are not able to work ?

@NHSnamechanger

Personally given my personal experience I would keep any savings. Bullying in the NHS is endemic. All it takes is for there to be a reshuffle and you end up with the manager from hell. In my Trust they never make anyone redundant. When they need to make savings they just bully the non-favourites until the break or leave to get the numbers down.

There's plenty of nursing jobs outside of the NHS anyway, having the PIN is more relevent really.

You know what. I am in the same boat and I think you should do up your house and live as you want (within reason) as you have a good level of security. I have about 4 month saved that is it.

I don't understand why the tax payer should fund you a whole years salary if you get made redundant

Your post annoyed me.
It’s one month’s salary for every continuous year worked in the NHS.
Is’s the Employment Rights Act 1996.
I have never heard of a nurse being made redundant, have you

Why? It's a fair question. Why should my taxes pay for such a generous redundancy package for NHS staff when I would receive a meagre redundancy package in the private sector?

I don't know of any nurses who have been made redundant but I know someone who worked in NHS administration who was made redundant and received a years pay as part of the redundancy package.

You’ve been a nurse for 17 years and your child is 1 . What did you spend your left over wages on before you were paying for childcare ? I would have thought that you could have saved more than 3 months wages in 16 years ?

£200 a month , every month for 16 years gives you almost £40 k .
Those starting out would be wise to start saving asap.

One useful mortgage product which makes more of your savings is an offset mortgage. You have a savings account linked to the mortgage, and the balance of the savings account is subtracted from the outstanding mortgage when the interest is calculated each month. It means that that money is effectively helping to reduce your mortgage, but you still have access to it when needed.

I'd be very nervous only having 3 months in savings (even in a v secure job) but different people have different comfort zones.

I've only been able to start saving in the last 18 months or so, and it's made a huge difference to my general wellbeing and feeling of security. I think there's never a bad thing about having savings.

You can’t predict the future.

I’m a saver, growing up we has absolutely nothing so while not at all tight I am careful with my money and I have a financial plan so I do know where all my money goes each month.

I had a two year period where I essentially spent nothing apart from the bare essentials, I was saving to buy somewhere and I needed a large deposit due to living in London. That money wasn’t used as a deposit, but it enabled me to take a year out of work when I became a parent.

I have some money saved at the moment, I could pay my mortgage and get by for about six months. I’m in the process of selling my garage so that will significantly increase my savings.

If you can afford to save it is very sensible, it can save a lot of stress and worry in an emergency.

We do have to remember though that savings are a luxury that simply aren’t available to most people.

It’s a good question though - when do you have enough, so you can stop saving and start spending? Especially on things like your house which can be a good investment.

I would want to have enough to cover boiler and car blowing up, and a couple more big household emergencies.

My mum and dad saved all their lives for “the future”. Future came, mum got early onset dementia and all their exciting plans of travelling in retirement etc went out of the window. We had such a frugal life as kids and whilst never technically went without I was always embarrassed about our old fashioned house and never having fashionable clothes. I funded myself completely through uni and never asked for a penny. They had both come from very poor backgrounds and were so afraid to spend money.

I am definitely in favour of having an emergency fund but if doing up house will provide joy here and now then that should be considered as well. As you said it will increase value of the house. It’s not like you’re spending money on designer hand bags!

It’s a balance. Be sensible but don’t put saving above everything else

I’m in a similar job position to you OP in that it’s as secure as they come, have the same sickness package etc. I don’t have any savings AT ALL never mind 3 months worth. It would be great to be in that position but in reality I think VERY few people are. Spend the money and be happy.

In work I come across a lot of people who have had their life change in a few minutes. I'd keep the savings and maybe read/listen to Your Money or Your Life.

Money experts always say you should have approx 3-6 months net income in savings for emergencies, which may not necessarily be redundancy. It could be something as yet unforseen.
Personally, I think 6 months is a bit extreme, and I am not sure that many could afford that, so I personally always tried to have about 3 months, net income. Then if you have to dip into it, for something unexpected, then aim to replace asap.
I could not say what the unforseen circumstances would be, because that is the nature of something unforseen.

When do you decide you have enough savings?

6 months living expenses for us and mortgage and cars paid for, which put wasn't ideal when DH's income suddenly went to zero at the beginning of the pandemic but at least we haven't had the bailiffs coming around and the threat of losing the house like a lot of his friends in the same industry.

And people can think what the like about my artex

@milveycrohn

Money experts always say you should have approx 3-6 months net income in savings for emergencies, which may not necessarily be redundancy. It could be something as yet unforseen. Personally, I think 6 months is a bit extreme, and I am not sure that many could afford that, so I personally always tried to have about 3 months, net income. Then if you have to dip into it, for something unexpected, then aim to replace asap. I could not say what the unforseen circumstances would be, because that is the nature of something unforseen.

I suppose it depends what that money is for. If it's just to cover for loss of income and is over and above money that would be needed for annual and irregular expenses (eg holidays, insurances, Christmas, car servicing/MOT) plus replacement of white goods, cars, roofs and windows, then the OP has a long way to go to be in this position if her only savings are three months basic expenses.

I only save up for specific things, I've never had or needed a general emergency pot of savings.

@GirlsBlouse17

I don't understand why the tax payer should fund you a whole years salary if you get made redundant

Your post annoyed me.
It’s one month’s salary for every continuous year worked in the NHS.
Is’s the Employment Rights Act 1996.
I have never heard of a nurse being made redundant, have you

Why? It's a fair question. Why should my taxes pay for such a generous redundancy package for NHS staff when I would receive a meagre redundancy package in the private sector?

I don't know of any nurses who have been made redundant but I know someone who worked in NHS administration who was made redundant and received a years pay as part of the redundancy package.

One week's salary, not a month, depending on age. The maximum statutory works out at about £12,000, but employers can offer a lot more than that.

I would get savings up to 6 months of full living costs as a minimum. Then look at a house renovation fund.

You also need to think about the ‘what ifs....’. The stuff that seems unlikely. Partner has a car accident and is unable to work again? You have a child with a disability that requires round the clock care? You wake up one morning and realise you no longer want to be a nurse?

Why should my taxes pay for such a generous redundancy package for NHS staff when I would receive a meagre redundancy package in the private sector?

You need a better union. Just because you're getting fucked over doesn't mean others should.

@Graciebobcat

I only save up for specific things, I've never had or needed a general emergency pot of savings.

Lucky you. But the thing about emergencies is that they can just happen out of the blue. What if your boiler breaks? Or there's a storm and you lose half your roof? Or your car needs a new clutch?