How much would you want in savings before you would relax a bit?

[baoap]

I’m feeling so stressed and to be honest I can’t remember when I wasn’t stressed about money. I’m on my own with ds (5) and since he was 2 I’ve pretty much obsessed about feeling more secure. I have managed to save 17000 but our basic expenses are 1,500 a month. I can only save 300 a month at the moment and often it gets wiped out for example last winter with a huge heating bill that just couldn’t be avoided. I feel miserable living like this. I sometimes wonder what amount I’m trying to get to that would make me feel better, I guess 50 or 100k but that’s obviously not going to happen.

I agree with several points made by others:

As a single parent i wouldn't go too much beyond what you have as as PP pointed out you would lose any UC entitlement with savings over 16k. You are focussing on a rainy day /crisis but UC is also part of your safety net for that as a single parent. Great if you can manage without and be independent but it is your right.

Higher winter fuel bills are just a part of life for us all. Is your Direct Debit set so that you accrue a balance through periods of low usage and have a cushion in winter? Would paying a consistently higher amount help you feel less anxious about a big bill? Can you change your billing to monthly so that you can keep track maybe.

With your current mindset nothing will be enough. When you hit 20 you will want 50. When you have 50 you want 100. So i'd have some talking therapy through work or nhs to treat anxiety as this will be impacting other areas of life too.

They say when you are an ineffective saver its because your goal is too lose. 'Saving' is too unfocused. And you need a goal like i would like to be at 18k by Christmas. And 20k by next Christmas. And you then work towards that. I wonder if the same would work for you-your goal is too open ended and something specific and that isnt endlessly committing all of your spare cash to something far away is better. Also a mixture of saving goals or pots like PP said. 100 a month to new stair carpet and 100 a month to rainy day fund.

Op you've got almost a whole years savings there if your expenses are 1.5k a month. Please, get help for your mental health. This level of stress and anxiety over money is not proportional. Please do not ruin yours and your childs life with your stress. Not worth it! Look into health insurance that covers you if you get long term sick for added peace of knd. Then start telling yourself a new story - you're doing fine, you have money, life is for living.

I'm single and in SH, so no point in me having more than 6k saved. 16,000 is the threshold for UC but for the amount saved between 6,000 and 16,000 any benefits you can get are reduced. 6k is the amount at which people still get full benefits. Obviously it's different for people who have a mortgage, my rent would be paid so I'd be fine. Although UC for living expenses is a paltry amount, that plus my 6k would keep me going for a good while.

It does sound like you're overly anxious though. It's not good to be that stressed about money when you're in a decent position. I agree with others that you really need to seek some therapy around this.

As a single parent i wouldn't go too much beyond what you have as as PP pointed out you would lose any UC entitlement with savings over 16k.

Has the OP said they receive UC?

This is all rather abstract without knowing more about the OP’s financial situation really. If she has paid off the mortgage, has been paying into a good private pension and has £17k saved on top, that’s very different to having an interest-only mortgage of £300k or a mortgage with little equity, opting out of the workplace pension and not using that £17k more astutely. It could be a great little nest egg or it could be money that would be far better off used elsewhere.

I wish I had £17k in savings! For us that would be around 5 months of all our bills plus food/charging the car. No room for luxuries but fine for the basics. Plenty of time to find a new job or at least a temping job. I think you’re panicking too much.

You've posted this so many times. You are destroying your mental health and your DS will soon start picking up on it. Get some good protection in place - income protection, critical illness and life cover - these will cover most of the eventualities and can be inexpensive based on age and medical history. I recommend Cavendish Online (part of lloyds banking group and recommended number one broker by Martin lewis) and have done to all my friends. They offer free advice and can set everything up over the phone. They also offer a non advised or online service but I think you'd need advice as you're so anxious and it would be important to get it right for you.
Having £17000 in savings is good - a lot of people these days can't save at all. So set up some protection to give yourself peace of mind and then keep saving and see the GP about your anxiety.

I borrowed an extra £5K when I took out my mortgage, in case the house needed any work on it. It didn't really, so I've tried to maintain it as savings.
Over the years, its gone up and down. From a high of £7K to a current all time low of £1K.
It does feel a little uncomfortable, especially as I don't have an overdraft to draw on.
I feel most comfortable at £K and above. That feels like enough to get me through an emergency.
And, although I couldn't live off it for 6 months (never even heard of this as a goal except on here!), I think it would see us through until a benefit claim could be processed.

I wouldn't want more than £16k cash as I think that is the cap for benefits eligibility.

If you have more than that then I'd start paying into pension or mortgage overpayment.

I try to keep 10k emergency savings for stuff like the car breaking or the roof leaking.

If I get to 20k I start to think we can afford a holiday or to get some work done on the house or similar.

We.do have some money in trust for the dc (from an inheritance) which will help with uni and perhaps a house deposit too.

I think you're doing really well, op! I can't conceive of having the sums in savings some people describe.

How useful is it to state that, when it's unrealistic, to a woman who is crippled with anxiety over savings, when she a lot more than most and we have a benefit system. I don't know what business has to do with it. Businesses are allowed to fail, children aren't allowed to starve, in our society.

She asked a question. I answered it. It would be foolish to say "yeah yeah, everything is fine" when I don't believe that is the case. My reference to business was about cash flow. This statement was in response to the suggestion that overpaying the mortgage is the right thing to do. It is, but not at the expense of cash flow. It wouldn't help to not be able to pay a bill as all spare money has been pumped into overpayment. I thought I'd made that point clear, but evidently not.

Life is tough, any savings are better than no savings.

It would be foolish to say "yeah yeah, everything is fine" when I don't believe that is the case.

I agree. The OP sounds like she has high levels of anxiety and may not be making sound financial decisions.

It doesn’t sound like she’s coming back to clarify the financial way up though.

Your last statement is helpful. As said anything over £16k and benefits aren't awarded. So actually unless you are talking private school fees, massive mortgage and lots of debt, things will be ok, if you live in the UK.

This is an important point. If you are a couple then it's likely a very small amount you'd miss out on. But if you have childcare expenses then you'd arguably have more of a safety net with £15k than £20k.

It's a balance but I think your approach of overpaying the mortgage to reduce debt is a good one. Worst case you'd more easily get a payment holiday because of this so you would be at very low risk of losing your home.

Savings can be considered wealth, so 4 simple buckets really.

1 Cash on hand. No need for more than 3 months salary really in a decent instant access savings account. Handy for a boiler repair or impromptu bargain weekends away etc.

2 Savings. Utilising annual up to £20k ISA allowances to ensure growth returns are tax free. Useful for planning home improvements or bigger holidays etc.

3 Pensions. Again can put in up to £60k annually to help tax efficiency. Needed for the day you decide to hang up your boots and relax / enjoy life more.

4 House equity by paying down the mortgage so that your LtV eventually shrinks to 0%. Which allows you to spot paying a mortgage or trade up to somewhere more expensive, or trade down and cash out.