Is it ok to not really be saving anything, if we already have savings?

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Very long, sorry!

For the last 5 years I've been a SAHM. We did a LOT of financial planning for this, and had saved £50,000 before TTC. DH and I have never been high earners, but we live quite frugally anyway and don't enjoy foreign holidays, have expensive hobbies etc. We have a very modest but adequate house in a lovely area, and run two cars. So for the last five years, we've been living off DH's £25k plus £100 per week from the savings we accumulated for this period of our lives. It's actually been pretty comfortable and we've enjoyed holidays etc, and been able to cover the odd big bills that have come our way.

We have half of our savings left in the bank (£25k) and I will be returning to work in the autumn, as our twins will be starting school. The thing is, I still want to be around for the DC. Pick them up from school, have the holidays with them etc. I won't be earning much anyway, so any hours in childcare wouldn't be "profitable" to us. I've worked out a few options, all of which would basically allow us our current lifestyle plus all the time with our DC. However, we still wouldn't be adding any more to our existing savings. Just no longer dipping into them.

Does this sound ok? I always imagined that when I went back to work we would start replenishing our savings, and I feel a bit uncomfortable about not doing so. I'm not worried that we wouldn't manage - we've already been absorbing the ridiculous increases in the cost of living and our mortgage is fixed for another 5 years. I suppose if things get even more expensive then I can look for more work.

BTW this is absolutely not a stealth boast - I know we are lucky compared to some, but I also know we are not wealthy by any stretch!! I'd just like an outside perspective on our situation.

Of course its fine, main reason for having savings in my view is to cover home repairs £25000 is ample.

If you've got 6 months salary in savings then go ahead

I would say that when the children are young as long as you are maintaining your savings you are doing great. However taking a long term view it would be great if you could find even £50 a month to add to savings.

It sounds fine. Most people have nowhere near 25k in savings. I think if savings are important to you and they are not diminishing then that is fine. I think there is a lot to be said for living a frugal lifestyle with less stress and foreign holidays, many people just stress themselves out juggling two full time jobs to pay for all the extras. Of course I also understand that many couples need two full time jobs just to make ends meet as well but that doesn't sound like that's the case for you. I have a friend with two young kids, always constantly stressed about working full time, condensing hours into longer days, not seeing enough of her kids etc but does this just to pay for an amazing house and foreign holidays and numerous days out.

Are two cars essential to the way you live? My concern in this set up would be the cost of replacing a vehicle. If you have two but could manage with one, less of an issue.

I don't think you need to add to long term savings but a bit of slack in the budget so you can replace a washing machine or pay for a car repair would make me feel more comfortable.

How much will your job add to the family pot once you deduct childcare and commuting? If it's not more than a couple of hundred pounds it might not be the right job longer term. If you are only needing to add a few hundred pounds a month then evening work or an early morning weekend shift etc might be better.

Sorry I read your twins are two but it's five so school hours clearly make more sense.

You sound like you have your running costs pretty well nailed if you've managed this for five years.

A job that suits your childcare even if it doesn't maximise income sounds like it would make for easiest family life. You can add to your savings again in a few years as they get more independent.

The question is really more around what are your savings for.

1. Enough aside to continue if dh lost his job as the main earner. 6 months is usually recommended.
2. Pensions - do you have them?
3. Savings for your children - do you have them
4. Insurances for critical

Illness and life insurance - do you have any?

1. Kids club fees for when they want to do it rather than you wanting to have them at home

And so on. I guess it depends what you're thinking about in terms of the purpose of savings and what you have invested where.

You've done really well so far given your dhs income of £25k, even to have accumulated 50k savings in the first place.

But that money isn't making you any money for the future so you prob need to set apart what you need money for in the future and how that works with minimising your income in the future.

Put another way OP, your costs are going to be increasing as you get older. Money for the kids, the mortgage, your pensions, their savings etc. your income requirements is actually increasing at a point you want to maintain/ reduce.

Depending how old you are aswell, depends on what your earning capacity is over how many years.

I would also consider how easy it is to earn more and up your hours if needed and how quickly you might be able to do this

With interest rates where they are now you should be able to get at least 4% even on an easy access account (perhaps a mix of ISA and easy access for tax/ to take advantage of the good rates for smaller amounts). This will give you 1k a year in interest.

This is exactly what savings are for, to rely on when you need them. Saving for maternity leave is completely reasonable.

I would consider longer term when considering hours to work etc.

Forget cost of living. Your dc are going to become more expensive with every passing year anyway. It feels like a long way off when they're only 5 but it's really not. Give it 5 years or so and you'll be paying for four adults anytime you want a meal out. Shoes and clothes prices rocket as they get older. Activities. The Y5 school trip will cost you £800 instead of £400 because you have double whammy. They'll eat a lot more, use more electricity when they start using an ipad or whatever. It's just more and more expensive with each passing year.

I would try and build a bit more of a buffer now rather than just managing iyswim.

Personally I only like a a max of 3 months outgoings in a savings account.

With surplus I'd be overpaying the mortgage to be debt free quicker.

And paying more into a pension - it's far more tax efficient and the interest over the years means I'd stop working quicker.

How the heck did you manage to save up £50k when your DH earns £25k a year? Unless you have a really well paying job before?

You must both be very good at saving money...

But - if it were me, I would only want to work part time hours when your twins are at primary school and then maybe more hours and replenish savings/pension funds once they are at secondary school.

You must have been managing pretty frugally over the past few years. I think you need to now think about the longer-term. Is your current expenditure sustainable once the children want to do more activities, are going to parties all the time, see their friends going on holiday etc alongside rising cost of living. if you didn’t have savings you’d probably have been getting some universal credit which shows you’ve been managing on a pretty low income for a family.

I think you also have to start thinking quite carefully about finding a job that brings you enjoyment and fulfilment and not just one you can do in school hours . Limiting yourself to school hours, term time only isn’t going to be giving you the biggest range of options or opportunities to progress. You may not want that now but you might feel very differently in 5 years time. Would 1-2 days if after school care really be so bad if it got you a better paying job?

Thank you all for the responses, some good points to think about.

We always knew that we wanted our DC to have a SAHP, and also knew that it would be very difficult on low wages! So for 3 years before TTC we lived off only one salary, saving all of mine. Firstly to see if we could do it, and secondly to end up with a big pot for when the time came. It was actually quite easy, but then we are lucky to live in a cheap area (mortgage on our 3 bed semi is only £480 a month, which makes a huge difference).

The twins actually do two weekly clubs (costing about £150 a month total) at the moment, so I'm not too worried about covering extra curriculars etc once they start school. We managed to throw them a birthday party last month with all of their preschool friends. Things have definitely got more expensive in the last year or so, more like what I expect to be budgeting for once they start school. Maybe once they start secondary school I can start working/earning more ready for when they learn to drive and maybe go off to uni.

As for fulfilment in a job - I can't imagine any job that would fulfil me in the way that my family does. That sounds kind of snarky but really isn't meant to be!

Your low mortgage makes a massive difference but I’m still in awe of your budgeting! You might want to run the numbers to see how you can maximise a return on your £25k- some in the mortgage might help but it may be worth thinking about your pensions as well. If you are able to stay living frugally you might want to look at FIRE (financial independence, retire early) as I suspect you’d do quite well with the discipline of saving to retire early if that was something you both wanted.

The only thing that struck me really was whether you’d feel a big bereft once the children start needing you less . They change so much even between the start of reception and the end of infants but primary years are lovely so I can appreciate why that is a driver for you.