What are your savings for?

[FrostedSnowdrops]

I tried doing a search but couldn't find anything that answered my question. There are plenty of 'how much have you got' threads though, this is not one of those

I struggle to understand if savings should be cumulative, or eventually spent, or a mix of both. You often see 20% of take home pay quoted as how much you should save, but is that the cumulative suggestion?

We save for Christmas/birthdays on a monthly basis but obviously that is all spent throughout the year. We also save for general rainy day things and try not to dip into that pot.

If you save regularly, what do you try to aim for? Is there a certain amount you save that must not be touched, and if so what proportion is that of everything you save?

When we were younger (early 30s) with small kids we had no savings and we saved hard for a deposit on a house. Then we saved to have about 10k dollars in savings for an emergency. Both of these meant a lot of sacrifices. That 10k savings is still in its account - get a notice about it every year. it reminds me of how close and tight things were then compared to now. Compared to loads of people we were already doing great to even be able to save that money.

We are now older and high earners so we save for

1. pension - this is our priority. We are in the US where social security is probably not much below the UK pension but we want to feel we will have some money of our own going into old age.
2. children's education (so far we can pay for this out of regular income but would use savings if needed)
3. Donations to charity. We give a significant (to us) sum every year to a homeless charity we love. It means a huge amount to us to be able to do this.
4. other nice things. We finally did a renovation on our house - that was worth it. We are finally thinking of doing some holidays just the 2 of us - if we do, unless it was really exhorbitant, we would upgrade our longer flights.

For me pension/old age is the big one tbh.

Pensions is one.

We have long term savings in stocks and shares ISAs which is to supplement our pensions in the hope of retiring early.

Then we have short/medium savings which are for holidays, house repairs etc.

I have a very small amount of savings.
I have one account for Christmas and birthdays which is currently empty.
One account for car related things (Mots and repairs) which is almost depleted.
The rest of my small amount of savings is there for emergencies within the house. My roof tile blew off recently and it covered that for example.

Ideally I want around 10k in savings for emergencies or to prop us up in the case of sudden unemployment.

If I ever reach this, I will then be happy to save towards either the mortgage or home improvements.

Pension
Overpayment on mortgage
Do not touch fund (mine)
Do not touch fund (husband's)
Car/Christmas/Birthday fund

Just about to deplete the 'do not touch' because our boiler is on it's way out, and we were saving in them to pay for a new bathroom which we might as well get done at the same time. Did look into a loan, but the rates were three times the interest, and I hate borrowing money.

Already calculated the interest we will be losing on the savings, so have worked out monthly repayments back into the savings like a loan.

I'm a savings freak and keep track of it on a spread sheet, I don't have a huge amount but I like to have everything in an order.

I have a budget and as soon as I get paid money is paid into all my savings accounts, so I don't get chance to spend it first! We also over pay the mortgage, upping it if I get a pay rise/increase when personal allowance changes.

1. Pension, bumbles along and I rarely do anything other than to up my contribution if I get a pay rise.
2. Premium bonds, I'm aiming for 6 months of our family outgoings in here, I currently have only two months of just mine.
3. ISA, this covers holidays and any home improvements
4. Various smaller accounts for presents, Christmas, car running costs, animal bills, School trips/lunches etc
5. I also have a 'penny' account, where I transfer any random pennies on my current account into it. I've over £15 this month. I read this top tip on here and it's brilliantly easy.
6. I also have premium bonds, JISAs and savings for the DCs which will hopefully go towards university/driving lessons/setting themselves on the road to independence. Ideally I'd like £1k for every year old they are, I'm not quite there yet.

I like order and my head feels clear with all my 'pots' in order, just wish they were a bit bigger

We have different savings. One is just for holidays/treats so when it gets to the amount we need then we spend it on that.

One hovered around 10k and is for future large expenses such as a new car or a new boiler when necessary. We don't contribute to this one at the moment as we have enough in it. If we had to spend some then we would save again until it was about 10k.

We don't keep another cash savings, but overpay our mortgage a certain amount each month which is a type of saving

I pay into work pension. I have an emergency saving account. This has been used to move house, buy replacement old banger car & repairs, holidays, pay credit card off each month, investments, birthday treats for family & friends. Helping family at times of illness.....it's really a never ending list of things that occur

I'm saving in case I get switched to UC before I graduate. No one can say what the payments are likely to be so I'm saving from my student finance.

If you read on money websites, it suggests saving 3-6 months salary for emergencies

I do have about 6 months salary saved. I have some other funds due for release in August - this will be used to pay off as much of the mortgage as possible. Once the mortgage is paid off will go into savings overdrive in order to retire / semi retire ASAP! I am vey lucky and don't need to save for holidays / Christmas etc

Short term - holidays/ things needed for the house/ nursery fees/ annual bills - sum saved monthly
Instant access cash account - 6 months expenditure in case of redundancy
Medium term - new car savings, my 40th birthday trip , known one offs added to annually (basically whatever is left over from pot 1)
Long term - S&S ISAs - early retirement, added to monthly
Pension - retirement, added to monthly

We have short, medium and long-term approach:

Short-term budgeting: Christmas, insurance, car maintenance

Medium- this is currently at 0 but I’d like a holiday pot.
Medium- building up emergency cash savings
Medium- small over payment on the mortgage

Long-term building up a stocks and shares pot over 10-15 years that will either be used for private education or an extension plus pension.

Right now all our savings are going towards a house build

We have a couple of pots:

One- about 60k. Used to put 250 a month in but massive childcare costs at the moment so just £50 a month. This is a pot for retirement or for rainy day/job loss.

Two- currently only £325. Monthly £325 and it covers all car related costs for two cars. Plus the service charge on our flat. The amount in it fluctuates throughout the year.

Three: tax account for our flat . Currently about £600 but by next Jan when we have to pay there should be about £2k.

Four: holidays: currently about £500 and we need to pay off our holiday in May.

Five: kids swimming classes. About £100 at the moment.

I don't save for birthdays or Xmas but I start buying Xmas presents in August to spread it out over 3/4 months. Couldn't afford to dl t all in December.

We have a savings jar.

Also we are currently pooling our pennies for our upcoming trip to Florida in May. I save as much as I can and take advantage of extra money schemes (DS is disabled). His disability money is used to cover the costs of owning a wheelchair and gas.

I personally count long term retirement savings separately from the 20% savings. We do put in a little extra each month to get the full employer match we have with DH’s job, so 5% on top of the 20% savings goes there and we never see it.

As for the remaining 20%, the main thing we were saving for up to last year was a house purchase. We just finished building our house last autumn, so now we are saving to

1. build up our emergency fund back up to 3-6 months of expenses
2. put away something for down the road (to help our children with things like house deposits, university fees, weddings, etc), and
3. build up funds for more in-the-moment things like car purchases, house upgrades, holidays, etc.

The first two categories (emergency fund and longer term savings goals) leave the account the day we get paid, so I never really see the numbers as ‘spending money’. The ‘here and now’ savings category works out to about a quarter of the 20% but will go up to half (as will the long term savings) once the emergency fund is back in place.

I don't actually have separate pots but I do in my head. Drives DH mad when I say we can't spend certain amounts as he can't see the difference!

My main category is the biggest and the untouchable because I am always fearful of job loss / future unexpected expenses / pension top up. There's about a year's salary (post tax) in this pot, in ISAs NS&I bonds and shares.

I also have some smaller pots, firstly one I intend to gradually give to DS whilst he is at Uni (assuming he goes).

The final pot is spendable savings which goes up and down between about 0-7k and it is used for holidays, home improvements and balancing cheap and expensive months (Christmas, birthdays etc). I keep this in premium bonds which means it is accessible in a couple of days and I hope one day will win me £1m!