How much is enough? Please help!

[whentoatopa]

A few years ago I was left in an awful situation. It made me very panicked about life as I had one dc at the time, only a few months old. Two years have now passed and I have managed to save 18k. I have 3k credit card debt that I also pay off each month interest free.

When I hit 18k last month I felt relieved. I have never shared finances with friends but I did tell my best friend that I had reached my safety net goal and I was pleased… to which she said a safety net is only more than 50k (!) so she hoped it was at least that??

I feel REALLY disheartened and now also worried that I haven’t given any real protection to me and DD. I could continue saving as I have but it’s been a miserable frugal two years and I was hoping to do more things this summer with Dd. Am I deluded? I have no good financial background/don’t come from money so perhaps this isn’t the big amount I felt it was? I feel like the wind is out of my sails a bit. For context my mortgage is 850 a month so it is quite high I guess.

Honestly I would use the savings to pay off your debt. The interest on the loan/credit card will be far higher than the interest you earn on savings.

I have no savings so you are in a far better position than me and many others.

£18k would see most people through an extended period of unemployment. That's what most people think about when they wonder if they have enough put aside.

It's worth considering the average adult in the UK has about £12k in savings.

@IfIHadAHeart the 3k is interest free so I just pay the minimum alongside what I’ve tried to save

Pay off the credit card immediately and have a £15k savings. That's better financial sense.

You have done really well to save that on your own in that time. I suspect she is one of those kill joy types who can't bear you have done something worthwhile.

They generally say to try to get to a point where you have 6 months of outgoings as savings so that's a good self measure to aim for.

Please don't let anyone put you down for this achievement because it is one!

Crossed about the interest free in which case yes pay what you have to but make sure you clear before interest free period comes to an end.

What an amazing achievement, you should be immensely proud of yourself . 💐💐

Six months of expenses is generally considered a prudent safety net,

You’ve done amazingly well!

I would going forward have two savings accounts or more - fun stuff, holidays, days out, Christmas.

That way mentally you aren’t spending your savings.

It totally depends. DH and I both have public sector jobs, 6 months full pay for sickness, and additional critical illness insurance so I don't feel we need a huge safety net (also no kids). If we were self-employed or in an industry prone to redundancy I'd want more in savings. You should be very proud of what you've saved. The lessons learned here are not to share financial information with anyone, and that no matter how close a friend is, they'll still try to piss on your chips if they think you're doing better than them.

Hah I've got 200 quid

Don't ever talk about money to friends.

I’d probably keep saving, but save 2/3 of your current amount and use the remaining
amount for treats.

Well.done OP I think that's a.really good amount. Honestly I'd ignore the "friend".- but I would not mention this to her or anyone else again. No good comes.of giving details of personal finance.

Honestly I’d say a good safety net is a couple of months income which you more than have! Comparison is the thief of joy - please be proud of yourself and don’t worry about what your friends have or what they think. You are doing a fabulous job providing for yourself and your daughter.

We have 3 dc and 2 adult incomes. Savings are 28k with 4k in interest free credit card (itching to pay it off but we earn interest on the savings so makes sense not to rush). Those savings will drop significantly when we buy a new car. My absolute minimum in savings is £10k but I’m happier with £20k. If I had £50k I’d go on more holidays 😂 life is for living and it’s about balance.

I have £3k in savings and it’s the most I have ever had! £18k is a brilliant achievement. I disagree with the other posters saying not to discuss money. Men discuss money all the time and there is such a lack of knowledge /embarrassment in many women’s financial knowledge. My mum’s confidence and lack of expertise in this area is not good and kept her in an unhappy marriage. I think it’s really important to normalise these conversations among women. But don’t be disheartened by your friends. I don’t think many people have £50k in savings at this stage in life!

You really should consider putting it an easy access stocks and shares ISA. How old are you? If reasonably young, I'd consider putting it all in an equity index like the S&P. You have a 20k allowance a year to put in your ISA.

The one rule is to invest invest invest. The rich are rich not because they save but because they invest whatever they can.

@preppingforlife thanks, sadly not that young (38) so have started late. How do I find one of those Isas? Can you have a normal one and a stocks and shares one?

£18k is an amazing achievement and higher than most people have. Don't put any stock in what your friends says.

A normal one is close to useless. I'd recommend just stocks and shares.

A cheap place to get an ISA and a cheap fund is Fidelity. Don't use hargreaves lansdowne or your bank. They're generally a rip off with charges!

38 is ok! Do some reading online about ISAs on like moneysavingexpert or something . Investing will help secure your financial future!

Well this isn't true, and is why you should be careful of taking financial advice from randomers on the internet. Cash ISA returns have now beaten stocks & shares ISA growth for the past two consecutive years - source here, and cash ISAs have no risk unlike stocks and shares.

@Grounded03 I've heard people say that too, but while I think it can apply for salaries, I can't see the benefit in discussing specifics on your bank account. Especially with the internet, you can have knowledge and be informed on finances without having in depth discussions with your friends.

That is the most BS comparison ever!! The U.S. stock market is up on average just under 10% for the last 100 years!! There is literally no better place to have your money.

I don't think there is any perfect amount. £18k would pay my expenses for about a year, so I don't think it is small at all. I don't think many people have £50k sitting in a bank, as most people would put it into a pension or overpay the mortgage, so I think your friend is talking out of her bum.

I would say a safety net is a sum that would see you through if you suddenly lost your job and had to still pay your mortgage/rent, bills, food and other expenses. It will depend on the type of job you have and how easy it would be to get another with a comparable salary. If you are on minimum wage, it would be relatively easy to find another minimum wage job. If you were a high earner in a niche field it might take longer to find something that pays the same.

It would also depend on what other things you have in place, eg. Some people might have mortgage insurance if they lost their job, so might not need as much in cash savings as the insurance would cover the mortgage repayments until a new job is found.

Some people have very small savings because they have funnelled all their spare cash into a pension, ISA or buy-to-lets or whatever. Some people have huge savings pots but no pension. And some people have mountains of debt and 2 pennies down the back of the sofa. I think £18k is a great safety net.

But if you are paying off debt that will soon end you will naturally be better off.

You could continue to save a small amount anyway so it will still go up, even if not at the same rate.

Why don't you make a new budget? Allocate yourself a certain amount of fun money each month and use the debt repayment as holiday allowance once cleared?

I find different levels of savings lots handy. Some is in two year ISAs which do have an option for a couple of withdrawals up to a certain percentage without penalty.

I also have a savings account which pays more than 5% and allows unlimited withdrawals but the rate only applies up to 5k.

The latter is for car repairs, house stuff if needed so is more every day saving than 'not to be touched ' savings.

If you've managed to save so much and repay debt then there is a happy medium to be had of a bit more enjoyment and a increasingly savings which if you have them in decent accounts should gain a bit in interest too.

Your friend probably doesn’t have any savings and is being p.a.! I think £18k is a really good chunk of money. I never have more than £1k-2k in my savings account - I’m terrible with money.