To be constantly worried about dipping into my savings?

[GilmoreGirl84]

As the title says, I feel really uncomfortable every time I have to dip into my savings. I’ve always been told to keep at least three times my salary set aside, and I actually managed to build up a bit more than that.

But over the past year I’ve had a mix of unexpected expenses and a potential redundancy scare at work, so I’ve had to use some of it - and now I can’t stop worrying about building it back up.

What’s your savings strategy? And how do you stop yourself constantly stressing about it?

I don’t constantly worry about it. I have nowhere near what you have put aside, but I do have something and I try to add when I can

You mean 3 x your annual salary? Wow - I have nowhere near that much and don't really worry about it to be honest.

What exactly are you saving for? Surely unexpected expenses and redundancies are times where you should use savings.

No, 3 times my monthly salary.

I had to pay for expensive car repairs, but this happened at a time when I could have been made redundant (and I am still at risk), hence the stress. I know I still have a small pot set aside, but the job market is atrocious and I am struggling to find another role.

But thats why you have savings? So you use thrm.for car repairs then save again

Why don’t you redefine your savings?

have 3 months living expenses and bill money as one pot that you only touch should you have a job issue and no salary coming in. Then have another pot for car repairs and maintenance and add more pots as you need.

we have pots for house maintenance, car maintenance, presents, health (dentist and optician costs), plus a few others specific to us in addition to the emergency fund which is a few months of living expenses. We don’t do salary but worked out how much are bills and living expenses are if we needed to have a lean month and what’s the minimum we could live on and that’s what we go off. We don’t touch that pot but the others get dipped into as needed.

Are you maximising the earnings on your savings? By which I mean locking some of it away in higher interest accounts?

I understand the feeling of dismay seeing the balance go down, but sometimes it's absolutely necessary, as in your circumstances.

My own strategy is to sweep a significant part of my monthly income over to my savings account as soon as I get paid. Then I only withdraw what I actually need, rather than keep it all in my current account.

@BIWI I have a small sum(about £3k) invested long-term, but that sum I can't access for unexpected expenses. I like your strategy and I've used it myself a few times.

@MakeMineAMilkyTea I just have a normal account, an ISA for unexpected expenses, and a small investment account. I also keep a “tax pot” for the money I need to pay tax on my side hustle. I guess your strategy works better since you don’t have sudden dips-like having to cover a holiday from your savings all in one go.

we have different accounts for different things and they are to be used for those circumstances. We save/move a regular monthly proportion of our wages into those accounts. Some months they won’t get used and they build up. Other times they are used for the purpose intended….Christmas, birthdays, cars, household emergencies, etc etc. but at the end of the day, we would take back the money and put it back into our regular account if the system wasn’t working and we need it back into our current account.
My adult son is saving for a deposit for a flat. Recently he had up dip into his savings and it upset him that he had done that. We had to explain it that these things happen. He’d enjoyed a big birthday with friends, he needed to spend for well needed maintenance on his car. Luckily he had the money to make his car safe again and what’s a life if you can’t enjoy a big birthday for a weekend with your friends.

Sometimes these things are needed and justified. Some people can’t and don’t save at all and they’re not even stressed by it, it is what it is. You’ve been lucky to have some savings that have really helped you out in times that you’ve needed so adjust your thinking to that rather than be stressed by it.

I use a small amount sometimes, but I have regular payment of £120 set up each month to pay it back. Its a little like I'm giving myself a small loan and I pay it back.

Money is a tool that you needed to use to fix something. Think of it as cutting a tree with a knife when you could buy or hire a chainsaw.

Our savings only really started to increase significantly at two points...

the first when childcare costs ended and,

the second when the mortgage was paid off and the children through Uni - these fell at the same time for us.

Until these points we started saving through employment sharesave schemes and when they paid out saved one half and spent one half (usually on the house!). Of course we had our pensions going as well. But thats all we could afford when the children were growing up.

Same.
I get paid weekly, and most weeks, I take a chunk and split it between various pots. For instance, the "Car" pot covers unexpected repairs, and the annual service and MOT.
"New car" has a small amount paid in weekly. I start saving for that as soon as I've driven the current "new car" home for the first time. Then, when you need to buy the next car, you've got a good chunk already put aside for it.
I have pots to cover my expensive glasses prescription, the next holiday, the next phone, dentist visits, bits and bobs for the house, my twice a year huge freezer and cupboard stock-up, and perhaps my most useful pot, "This Is Poop", for those just crap things that pop up every now and then, that you really begrudge paying for.

If you've already got the money already mentally set aside and in a distinct "pot", then it almost feels like you've already spent it, and it's a lot less fear-inducing.

I thought you meant three times your annual salary at first too OP!

I think the answer is budget if you can. We have separate accounts for bills so as soon as we get paid we put bill and mortgage money in one account and we pay off any credit card bills. Then try to save a certain amount at the same time so we have left what we have left.

However, there may be times where you don't earn as much or have additional things to pay out, and it's okay to use your savings for that. Try not to stress about it, maybe by telling yourself that that's what they're there for.

My savings strategy is to save money where I can. So I buy as much as I can from charity shops - all my clothes except for underwear have come from there for the past 5 to 6 years. ,and I have some really nice clothes. Its actually increased the range of clothes I wear, in a good way. I call it my ' algorithym free' clothes strategy. I enjoy it too : ) I buy as much household stuff from charity shops too - pots and pans, mugs, all my curtains came from there (saved an absolute fortune doing that), save petrol by cycling when I can. So I still have a nice quality of life, but where I can save money, I do.

I have budgets each month - so a budget for leisure expenses, food, money set aside to pay for dentist and optician costs etc. That way, I know if I am keeping in budget or if I need to dial things back for the rest of the month to stay in budget. I know exactly what I am spending my money on each month against each budget.

It also means I know what I can save each month. Like you I have a mix of money I can access instantly and money put away longer term in fixed bonds or notice accounts. I don't have longer term investments as my life is too uncertain for that.

I think the advice for three months of salary saved is obsolete. That was based on a time with a buoyant job market where you could get another job easily or quickly. For many people that is no longer possible.

If you do get made redundant my advice would be to do anything to earn money to protect your savings. Get a job as evri delivery driver to save money if you need to.

Sorry, unnecessary post.

I realised I was dipping into savings more than I wanted so I started a (very) small business on the side, monetising what is essentially my hobby. I make a few hundred a month and its made all the difference. Sometimes no matter which way you carve it, its the amount of money coming in thats the problem, and unless you change that it will be an ongoing issue.