How much savings do you have and what’s your income? Are my savings disproportionate?

[turtlessswim]

I earn 65k and save 550 a month. I know that’s not a small sum but it’s hardly moving mountains financially. I wonder how much you have to earn to actually have a decent buffer? I would feel comfortable with 100k saved and it feels impossible. I’m 37.

What on earth do you need 100k for???

im not obsessed with saving, i have a chunk in the bank ( from previous house sale) but spend most of my salary every month. I don’t believe in saving up loads unless you have a specific goal. Living is happening now!

They say 6 months expenses, but I agree that to me wouldn’t feel comfortable. I think it also depends on your circumstances- are you renting, paying a mortgage, how long is the fix and do you have dependents?

It’s a bit of a dilemma right now as I want to save money and have cash in the bank but actually, increasing my pension contribution is a much more tax efficient way to save. I’ve increased my salary sacrifice from my pay each month, and I am seriously considering paying half of my savings into my pension as a lump sum.

So, OP, have a look at your pension pot!

How much is going to pension?
what is your take home pay?
what is your bills?

It depends entirely on your outgoings. If you have no housing costs and low bills then you could look to save more than £550. If you have fairly sizeable housing costs and bills then it sounds like a comfortable amount.

And as I’ve gotten older, and seen friends and colleagues die unexpectedly, I’ve also become far more conscious of not preventing myself from living properly and to the full today for the sake of savings for a tomorrow we’re not all granted.

I guess it depends what your outgoings are and what you’re saving for?
My husband earns just less than you and I’m on maternity leave and we put away about 750 straight from his wage each month. We try really hard to be frugal so we can add any leftover money to our savings / investments.
Luckily we bought our house when interest rates were pretty low so our mortgage payments are fine, and my husband knows about investments etc so we tend to invest rather than just leaving it to sit in a savings account in the bank, which does help to add a bit extra.
Plus we are saving for a new house and so are really motivated to save for that.

Do you mean you think you need £100k in cash? Or in fairly liquid assets such as funds?
i wouldn’t have that amount of money sitting in a savings account.
Nut also the only time I’ve ever had that much in fairly liquid assets was when I was saving up for a house deposit.

I've reached the ripe old age of 66 and have never saved a penny in my life. During the years I've worked, I've always earned a reasonable amount, although nothing like some of the salaries that some people on Mumsnet boast about, and my husband always earned a slightly higher than average salary until he retired. We've never needed savings and if we had any major household expenses, holidays etc if we didn't have the money in our current accounts, we used credit cards. It's worked fine for us!

I this economy it’s so hard to save without disrupting your normal way of life.

Unsure why you want 100k savings… but seems unrealistic

i earn £50k and struggle to save well because of student loan, NI, pension, bills, mortgage, groceries, car, etc. Crazy rly. I barely get to do anything for myself but I get by ok.

"Hardly moving mountains".....£33,000 in 5 years.

I think it's a very healthy amount to save monthly.

Correctly invested in an ISA you'll find it will snowball.

I think that level of savings is more realistic:
-within a couple (economy of scale)
-for higher earners 100k+
-for older people late 40s/50s

I also think people our age need to temper savings against pension contributions to remain tax efficient.

Given your salary (and therefore outgoings) I think £40k in ISA or savings is much better target.
It's 100% of your post tax income (ish)
Which is a very good / healthy buffer and if means you are going to have a balance between savings and pension which gives you a much more balanced position

What are savings for?
If it's a house deposit, 100k sounds reasonable.
If it's in case you loose your job, it's quite high.
If it's to replace the washing machine, it's excessive.

We have longer term savings (new roof, redundancy) and shorter term savings - new car tire, holiday.

If you are saving 15-20% of your income, that sounds reasonable to me. If you are a single parent paying nursery fees for triplets, it sounds amazing. If you are living rent/mortgage free, it sounds low.

This is impossible to give advice on. We'd need a full breakdown of your budget and goals.

£100k in savings as a buffer seems an excessive amount of money.... I'd be paying into pension, investments, mortgage after saving 6 months worth of emergency fund costs in an ISA/premium bonds. Or just plain living.

Iv always saved. Saved 110k for a house deposit (took 10 years) and when that was used iv saved 60k in just over 2 years for work on the house. I'm on 65k so 3.8k net and my bills are £1250 so 2.5k left each month. I put away at least £2k a month. I don't have children and I don't go out to eat very often though. So it all depends on your outgoings.

I tend to split 'savings' in different ways.

Asset wealth, which for most people is the equity in your property, to be released when downsizing and mortgage paid off, tax free.
Pension, long term savings for retirement, tax free on way in taxable in way out.
Stocks and shares ISAs within annual allowance, tax free.
Premium Bonds can be ok but returns are literally a lottery, tax free.
3mth income in easy access savings account, tax free only if you keep interest under £1000/yr.

I think it would depend on circumstances. Do you own a property and do you have a pension? We are early retired and on £5k net per month and save £1500 a month but much of that gets spent on holidays etc and our mortgage is paid off. If you are paying a mortgage and/or childcare then £550 sounds quite a lot.

I earn 70k and save at least 1k a month. I’ve got 72k saved now.

£58k + £23k is our combined household income. We save £1300 a month in various pots - ISAs, investments, premium bonds, high % saving accounts etc.

i earn 70k and save about £600 a month, this will go up once DD gets some funded hours at nursery as her fees are crippling (£1350 for 3 days a week!)

I also do about £100 a month into stocks and shares but that’s my ‘gable’ money

I had a relaxed attitude to building up rainy day savings and preferred to overpay the mortgage and increase pension contribution, but this year I’ve actually needed my rainy day savings (for a medical procedure) and they just about cover what I need. So going forward, I’m going to take that pot more seriously and try to get to the 6 months’ living expenses rule of thumb amount.

I earn just over 90k, over half of my take home goes towards mortgage (purchased this year at a bad LTV and high interest rate), much of the rest goes on childcare, student loan and bills. I try to minimise spending, don't really eat out much, coffee only at home, holidays low key. I am currently struggling to save anything more than £200 a month and some months go into my savings (currently just under 8k).

However, my student loan will be paid off in 6 months and childcare significantly reduces in 12 months, after that I want to prioritise having a good amount in the bank and maybe overpaying mortgage.

I've just made peace with the fact that I've managed to get a (hefty) mortgage for my dream house which I love coming home to each day. Other luxuries will come later.

Would you be able to cover all bills if you got fired or lost your job suddenly, isn't that the usual rule of thumb?

Assuming 5% interest / growth rate that's over £38k in 5 years or £86k in ten.

Not bad, and definitely moving the needle - but all depends what you're saving FOR, as others have said!

Household income roughly £90k…. no savings at all. We’re trying to repay a load of debt so anything left each month goes toward that.

Honestly I save about £60 a month. I'd love to save more but I'm getting married next year so most of my leftover money goes in the wedding fund.