How much would you put into savings with this monthly income?

[Booooot]

In a Great position after years of hardship of selling a property which means we will be mortgage free, debt free and have 50k to go straight into savings. Our combined monthly income is going to be 5000, our outgoings around 900.

I’m a “can’t take it with you! Might as well enjoy it!” Kind of person while my husband is a “No we must be sensible and not spend anything and save it all.” Kind of person. I want to meet in the middle somewhere.

what would you do?

Do you have good pensions and do you have dependents?

I don’t have a Pension yet and we have 2 young children.

Save 1/3
Spend 1/3
Go on holiday with 1/3

Enjoy! x

Put the £50k into savings and treat yourself from your monthly income.

You have £4100 available per month, for me that would be

£500 each to spend including family days out
£1100 saving per month
£1000 each into a pension

with this income and low outgoings you are mad not to be putting a lot into pensions.

I take it the 5K is the take home pay?

First thing is getting your pensions sorted. Half your current age -as a rough guide this is the percentage you need to put away in your pension each month. If your employer contributes X, then top this figure up until you get to half your current age.

I'd save hard until you have 12 months salary saved, and after this save 1/3.

I'd also consider starting junior savings in each child's name ready for uni/deposit etc.

Do I just contact a pension firm? When I start work will they pay into it too or would I have to have 2 different pensions?

Are you currently employed? If so I'd imagine you'd be automatically enrolled in your workplace pension. Usually there is a named person or department at each company that you can contact to up your pension contributions. Definitely focus on workplace pension before starting a private pension - make the most of your employer contributions.

I’d do £500 each into a pension. £250 each child into a jisa. £1000 into my own S&S ISA. And whatever left into premium bonds!

I’d use the cash for living expenses and reduce your take home from work to 12.5k so that you take a break from income tax and reduce your NI. You will turn your 50k into at least 60k by this mechanism, by stashing it in your pension. Will take more than a year but well worth it. Then buy some vanguard or fundsmith equity and earn 7 to 18% pa on average on it.

Not currently employed, have only ever done part time work so don’t think I’ve ever been enrolled. Once qualified I’ll be working for the NHS, they do a pension I believe.

“I’m a “can’t take it with you! Might as well enjoy it!” Kind of person while my husband is a “No we must be sensible and not spend anything and save it all.” Kind of person. I want to meet in the middle somewhere.”

You’ve been with him a while if you’re married with children. So how have you met in the middle previously?

Why were you in debt?

If that was from overspending, then I’d try to “re-programme” yourself and not see this money (which sounds like a windfall not a result of hard work?) as something to treat yourself with now. Move to a mindset where saving is a treat.

Decide together what you want to spend on - e.g. a holiday and commit to saving for it, not spending out immediately. Get into good habits that make both of you happy.

If you have no pension at all you need to be funnelling loads of your income into it now.

You need to speak with an IFA. Have you been making NI contributions?!

These all sound like very sensible answers 🥲

How old are you OP if you don't mind me asking? That'll affect what position you'll be in.
I'd also consider buying back some NI years if you have less than 35 working years until retirement age, as otherwise your state pension will be affected.

I’m 29, husband is 36

For the immediate future I'd max out premium bonds and then stick any winnings in a SIPP or similar.

Times are tricky right now and having easyish access to the money might be beneficial in the short term.

With no pension, that would be a priority.

Look at pension calculators to work out how much you need to save to obtain the income you will need in retirement.

I would also have an investment ISA for tax-free savings, to bridge the gap between early retirement and when the pension can be taken.

Also make sure you have an easily accessible pot of 3 to 6 months outgoings for emergencies.

In your position, pension and savings would be a priority. I would also travel and make memories a family, but do it on a sensible budget.

I wouldn't spend for the sake of it.

we have combined income of 3k pm. Atleast 1k goes in savings more if possible. Interest rates in saving accounts are so good at the moment i would use that to your advantage whilst the goings good!

I was thinking 1k into savings each month tbh. £250 to each child in their savings.

My take home is just over £5k. I put £2k into the joint account for mortgage, childcare, general living expenses etc, £2.4k into savings/isa/pension, £100 to charity and £500 to spend on shit (mainly Vinted, books, Lego and games). I have to have the fun money element otherwise what’s the point of working hard in a serious job.

I'd have another look at outgoings before you go to the next stage - even without mortgage £900 is very low?

Have you included all your annual expenses / insurance / Christmas / kids clubs / clothes / holidays / kids school trips / uniforms.

Monthly amounts for homewares, medical stuff, toiletries / groceries / kids treats / toys / eating out.

I'm approaching a year on YNAB and the number of annual pots I have to add to every month is sobering!!!

Max pension contributions for you both. To get a decent rate of replacement in retirement you need to be putting in half your age plus tax relief and/or employers contribution to a pension. Eg, if you are 30 put 15% of your monthly take home pay in to a pension.

Do not delay this.

So I should wait until I qualify then overpay my pension?

Will you have childcare on top of that outgoing?

do you now own a property to live in?