Savings - how much do you have?

[twinkletoesbluesky]

Just that really, trying to get a good lump saved in case of emergencies.

How much do you currently have saved and do you feel comfortable with it?

I know some people have hundreds whilst others have thousands so just interested really....

I agree, it’s not about amount, but about savings in relation to income/bills.

I have an Emergency Fund of 3 months of my income, which would actually be 6 months of expenses, as in an emergency I would cut out all non-essential spending and savings, thus reducing spending.

I also have a Bills Account which all bills come out from, and it is about 3 months ahead. This is really important, as @bowlingalleyblues says, once you build up a reserve you don’t get late fees and can take advantage of discounts for paying ahead (eg paying yearly not monthly or paying cash not credit).

Finally, I also have a House/Appliances Replacement Fund and other savings funds, like Christmas and Holiday. I also have a Retirement Account.

Otherwise I want my money working for me - paying off my mortgage etc.

@TuftyMarmoset no, but we do on our other investments. A couple of times a year, we shift what’s accumulated in our accounts into our investments, leaving back a buffer. We typically keep about 15-20k easily accessible for us outside of the portfolio.

Probably 25k out of the 54 has been mentally allocated to a new car for me (currently we are a one car household), flights to Australia (probably premium economy) and another holiday somewhere next year.

@WalkingOnSonshine I understand having a bit of liquidity, it just seems odd to me to use a current account for that when you can get a better return in an easy access or short notice savings account.

@TuftyMarmoset DH hasn’t lived here for too long so we have previously been restricted by the types of accounts he is allowed access to, due to not having a credit score.

This period between Nov & Feb is probably our most expensive due to birthdays, Christmas, insurance renewals plus visa renewals, so we tend to have more sitting in our accounts now than the rest of the year.

Most of mine is in an easy access ISA but we use our allowance every year within the investments. We’re happy with how we’ve got things set up, it’s working for us.

We have enough to cover normal household expenses for 6months or more.
I like the comfort of having a buffer should normal life or employment throw up any issues.
I have friends/family who frivolously spend every penny monthly on unnecessary material thing but who when the boiler or car breakdowns flap with worry. I couldn't live with that feeling or concern over just buying stuff to feel happy.

@LifeAdvice do you keep those funds in separate accounts may I ask?
I agree with a pp. We should be taught about money in school.
Can anyone recommend any good books with advice for low earners/ the financially illiterate, please?

[quote TuftyMarmoset]@WalkingOnSonshine I understand having a bit of liquidity, it just seems odd to me to use a current account for that when you can get a better return in an easy access or short notice savings account.[/quote]
But with interest rates the way they are, you're taking about very small amounts of money, eg about £50-60 a year even if you have £10k in cash savings, so most people will be happy to give that up for convenience if not needing a separate account.

Plus many current accounts pay interest or cashback so you're getting a return anyway .

We have savings now we are retired but for years when bringing up the children we had none at all. I shudder to think about it now. We used to have months when we couldn’t afford to repair the car and I used to have to calculate the cost of the shopping in the supermarket as I went round.

[quote FindingMeno]@LifeAdvice do you keep those funds in separate accounts may I ask?
I agree with a pp. We should be taught about money in school.
Can anyone recommend any good books with advice for low earners/ the financially illiterate, please?[/quote]
Look at the moneysaving expert website.

Get the weekly email for ongoing hints and tips to learn over time.

There's a money makeover to review all aspects of your budget and learn about putting money away for Christmas, insurance, broken cars, pets and washing machines etc.

Plus a five part MSE Academy online financial education course.

There's a also a financial education textbook that's aimed at schools but would be good for anyone who wants to learn more.

Only about a months’ expenses but gradually building that up. I do have access to good amounts on 0% credit cards though and could sell investments if I absolutely had to (circa £3k in isa) .
Only just starting to save properly but the impact of real inflation and pitiful savings rates means it’s a better idea to be investing anything you don’t need for 4-5 years plus. U.K. has pretty poor numbers of people saving relative to other countries but also very few who invest their money.

@FindingMeno Martin Lewis created a free textbook which is aimed at secondary school kids but still provides a useful foundation for others www.moneysavingexpert.com/news/2018/11/financial-education-textbooks-funded-by-martin-land-in-english-s/

@BarbaraofSeville it’s true that interest rates are low but something is better than nothing, and for example I have a savings account with the bank that we have our joint current account with, so I can just manage it in the app alongside which is super easy. (Short term savings for that one as tbf the interest rate isn’t great)
I think my DP’s account pays interest on balances up to £3k and he has about £5k in there and I keep telling him to switch the rest to somewhere else so he can earn interest on all of it. I think that scenario is probably relatively common.

For an emergency fund the advice is to acquire 3-6 months salary in case of job loss or sickness. We have £20k in ours but are retired on defined benefit pensions. We have £30k earmarked for new car and holiday to Canada when we can go. The rest of our money is in investments which I don't really count as savings. They are part of our pension income.

@TuftyMarmoset and @BarbaraofSeville thank you!

mdh2020 that’s exactly the same as us. My DH and I didn’t have anything saved until our early 50’s.

@FindingMeno Happy to answer, I also think financial literacy should be taught in schools!

If it helps - my pay goes directly into my Bills Account. From there, direct debits transfer money over to:

1. my Everyday Account - this is for groceries, eating out, clothes, whatever I want to spend. I can spend this account to zero.
2. my pension fund
3. my Savings Account which is a combination of long term savings things, so both the Christmas and Holiday savings are in here. I save for them separately, but I don’t want a lot of little accounts and doing this means I can ‘borrow’ from one, if needed, eg pay for the holiday upfront to get a discount, or buying a Christmas present in January before the fund is rebuilt. So borrowing money from the other side of the fund, but knowing my natural direct debit saving will repay it to account. If I was saving for anything else big, eg a car etc, it would probably be saved here too.
4. the amount left in my Bills Account is both the Bills account and the House/Appliance Replacement Fund. All my bills come out here as direct debits, including mortgage. This account always need money in it, hence me now having the buffer I mentioned in my previous post. As I also put in a bit extra each pay to cover replacement household items, the buffer builds quite easily. Eg I am slowly saving towards a replacement oven, stovetop, boiler, fridge, painting whole house. However, last year when the boiler did conk out, I used all the money to replace it, and again keep saving knowing the rest will cover it and it will catch up. Does that make sense?

This system means I really only have to focus and use my Everyday Account and even if I was sick or without internet access for a fortnight or month all my bills and money would move around on direct debits and be fine. Obviously, I look over it more than this!

Finally, my Savings Account is also an offset account for my mortgage, so the money there is doing it’s job twice :)

Hope this helps. I know some people will hate this, others may like it, but it works for me.

Sorry - forgot to add, the Emergency Fund is in with the Savings Accounts. This is just because I didn’t want lots of different accounts, so I worked out what money for best together and lump it together. I have a Note on my phone of the amounts for each one, but it is usually pretty easily to remember.

@LifeAdvice that is so helpful.
Thank you for your time explaining that
It makes me think I need to do similar.

We do similar to @LifeAdvice, one point I think is key is separating out your day to day spending money from everything else as it controls the amount that is spent and keeps your savings and direct debits for bills all safe and separate. You have a lot less to think about and the majority of your finances take care of themselves.

£8500 in premium bonds and around £12000 elsewhere. DH is now retired with a small pension and I'm not on a mega salary but this is enough to keep us going for a while if everything collapsed. We also have a lot of equity in the house which is our main buffer.

I started saving in my 20's. A % of my wages would automatically move into my saving every pay day. That amount has gone up and down with having children etc - both of whom are now 18+.

I earn well ish and have low out goings these days. Have a decent pension. Currently have just over 5 years of monthly income saved.

I'd also give all that money away if it meant I wasn't disabled.

@YuleHaveAWonderfulChristmas that sounds sensible regarding % of income. I’m just starting out trying to save / invest about 20% of joint net income. Do you mind me asking what the percentage is that you have done?
I am also planning to save / invest anything above a certain amount. So additional income / second job etc to be invested.

@TuftyMarmoset court order from DH divorce with ExW.

Sadly £0 for me now after being made redundant and using all savings. Partner the same.
Own my house though and partner owns his and rents it out for a £2.6k monthly income. So, between us approx £900k in property but nothing in the bank!
Currently considering selling both properties and moving out of London to buy three properties, one to live in and two to rent out. That way we'll be able to save again. I work and he has his own business.
We are both early 50s.
I shall be cashing in a CS pension soon.

@TiddleTaddleTat I save 1/3 of my wages currently. Its been up and down over the years.

Just do the most you can afford. Every little helps !