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Original poster

How much should we be saving a month?

92 replies

Cheesypizzaa · 19/08/2023 20:42

We bring home about 6k in total between us. 1k mortgage, 1.5k childcare fees, 1.5k other essential bills, petrol, food. So 2k left for discretionary spending/saving. My partner and I can't agree on how much of this we should be saving!

We have a 35 year mortgage that runs until we're 70, so I'd like to overpay to bring the term down. And just general saving for potential baby number 2/another maternity leave.

Want to be able to enjoy ourselves and go on the occasional holiday, but not just fritter the money away (I work full time at the moment and want to go part time in future, so income likely to go down rather than up).

OP posts:
Flipflipmania · 19/08/2023 20:48

what have you been doing with the £2k until now?

Parker231 · 19/08/2023 20:52

Do you want to be working until you are 70 to pay off your mortgage? I would be concentrating all non essential money on knocking at least 10 years off your mortgage.

Flipflipmania · 19/08/2023 20:53

35 year mortgage?

bloody hell. No brainer and I’d be seriously bloody concerned about fact your husband seems to think otherwise!

Original poster
Cheesypizzaa · 19/08/2023 20:55

Flipflipmania · 19/08/2023 20:48

what have you been doing with the £2k until now?

We've just moved house, so home improvements/furniture mainly! Before that we were saving a lot for the house purchase.

OP posts:
Original poster
Cheesypizzaa · 19/08/2023 20:56

Flipflipmania · 19/08/2023 20:53

35 year mortgage?

bloody hell. No brainer and I’d be seriously bloody concerned about fact your husband seems to think otherwise!

Well exactly!

OP posts:
threebean · 19/08/2023 20:57

Similar circumstances here but 23 year mortgage.

We save 15 % of income and overpay anything left. Can't bear thought of having a mortgage until I'm 65....

WtfHormones · 19/08/2023 20:57

I never understand posts like this. People can't tell you. You have to sit down and budget and work it out yourself.

skippy67 · 19/08/2023 20:58

WtfHormones · 19/08/2023 20:57

I never understand posts like this. People can't tell you. You have to sit down and budget and work it out yourself.

Exactly.

Flipflipmania · 19/08/2023 20:59

All very odd

Original poster
Cheesypizzaa · 19/08/2023 20:59

Parker231 · 19/08/2023 20:52

Do you want to be working until you are 70 to pay off your mortgage? I would be concentrating all non essential money on knocking at least 10 years off your mortgage.

I agree! And we will definitely start to overpay, it's just working out how aggressive we want to be with it. Having such a long mortgage makes me anxious, but we wanted the monthly payments to be affordable with nursery fees / if I go part time.

OP posts:
Original poster
Cheesypizzaa · 19/08/2023 20:59

Flipflipmania · 19/08/2023 20:59

All very odd

What's odd?

OP posts:
Original poster
Cheesypizzaa · 19/08/2023 21:01

WtfHormones · 19/08/2023 20:57

I never understand posts like this. People can't tell you. You have to sit down and budget and work it out yourself.

Fair point. Was just curious.

OP posts:
Parker231 · 19/08/2023 21:11

Cheesypizzaa · 19/08/2023 20:59

I agree! And we will definitely start to overpay, it's just working out how aggressive we want to be with it. Having such a long mortgage makes me anxious, but we wanted the monthly payments to be affordable with nursery fees / if I go part time.

Show quote history

I would work out what the overpayment would be to reduce your mortgage by 10 years to see what is left. Personally I wouldn’t consider going part time with that level of debt.

Original poster
Cheesypizzaa · 19/08/2023 21:17

I think I'm asking because I'm a bit of a worrier with money, and can get a bit obsessive with saving so sometimes need to be reminded to live a bit. My parter is very much "we have plenty of money, what are you worried about" so it can cause friction.

OP posts:
Flipflipmania · 20/08/2023 06:05

Cheesypizzaa · 19/08/2023 21:17

I think I'm asking because I'm a bit of a worrier with money, and can get a bit obsessive with saving so sometimes need to be reminded to live a bit. My parter is very much "we have plenty of money, what are you worried about" so it can cause friction.

In your thirties?

on a 35 year mortgage?

OP - if your partner really thinks you have “plenty of money” - then he’s either reckless or financially stupid not to be overpaying his very long mortgage. I don’t know anyone with a 35 year mortgage, especially not in their thirties and not a FTB (I work in property)

Flipflipmania · 20/08/2023 06:06

If you’re obsessed with savings - how much do you have? Do you have any investments? You don’t mention…. Pensions!

BarbaraofSeville · 20/08/2023 06:31

We bring home about 6k in total between us. 1k mortgage, 1.5k childcare fees, 1.5k other essential bills, petrol, food. So 2k left for discretionary spending/saving

Do things like insurance, car insurance, servicing, MOT, repairs, clothes for DC etc, ie anything that is essential but not a regular bill, come out of the £1.5k or the £2k left over? If the latter, that's money out of the £2k already, it's not all free money.

Also, as you've already identified, things like holidays and Christmas which, while non essential, need to be budgeted for, before money is considered to be available for 'frittering'. Something that's good to bear in mind is that a few quid a day on things like coffees and lunches can add up to the cost of a holiday if it's done every working day, eg a tenner a day is £200 pm or over £2k per year, that's the cost of a holiday.

Then you have to consider the cost of things like car replacement and home improvements. While there may be an element in discretion in these costs, ie you can manage with an older car or a leaky roof/drafty windows, there comes a point when these things could need a significant amount of money spending on them, so if you don't have savings, a big loan could be needed. So hopefully none of this is needed in the next few years while you're coping with maternity leave and peak childcare costs.

But I think I'd be thinking about saving £500 pm for an emergency fund/annual costs/holidays etc, and £1000 pm to cover the cost of maternity leave/get a head start on the time when you're going to be paying for 2 in nursery, and keep back a maximum of £500 pm for general day to day personal and family spending on non essentials.

TBH, I'd worry less about overpaying the mortgage in the short term. If you save most of your spare money 'just because' and use it for maternity/childcare costs while needed, you'll mitigate some/all of the interest charged (what's your mortgage rate?) while keeping the money available for the next few years, which are likely to be tough financially due to peak childcare costs.

Then when both DC are at school and you're only paying for wraparound care, then you might be able to start overpaying the mortgage.

But if your DH is wanting to spend more than a smaller proportion of your free £2k, which might be nothing of the sort anyway, he's a fool.

Mindymomo · 20/08/2023 07:06

I’ve always been a saver, DH was self employed so his money varied each month. We’re in our 60’s now and mortgage paid and retired. The one major regret I have is not paying the mortgage off early, I wasted so much money paying the interest, when I should have used part of my savings, it wasn’t a large mortgage at the end of the 25 years, but I couldn’t paid it off earlier. If I were you I would just save for a while as much as you can each month, it’s early days having your mortgage and new house. It’s nice having savings to fall back on and if you decide to have another DC then you will have savings to use to cover your time off work. Then when you return to work you can start looking at overpaying the mortgage.

Heatherbell1978 · 20/08/2023 07:16

How old are you? Are you funding a pension? From a savings perspective, pension should be priority number 1 particularly if you're young which it sounds like you are as that gives lots of time for compounding to do its thing. We used to overpay the mortgage but now that we're in our mid 40s, pile loads into the pension knowing that in around 12 years we can access 25% of this tax free which will repay the mortgage.

So you need to find pension first, create an emergency fund second (ideally at least 3 months salary) and then overpay mortgage.

From your £2k discretionary I'd suggest £500 each then £1000 into savings.

Original poster
Cheesypizzaa · 20/08/2023 07:54

Flipflipmania · 20/08/2023 06:06

If you’re obsessed with savings - how much do you have? Do you have any investments? You don’t mention…. Pensions!

We had lots of savings.... then we bought a house! So back to square one there.

Pensions aren't great due to starting late, but we're both making AVCs.

OP posts:
Original poster
Cheesypizzaa · 20/08/2023 07:56

Flipflipmania · 20/08/2023 06:05

In your thirties?

on a 35 year mortgage?

OP - if your partner really thinks you have “plenty of money” - then he’s either reckless or financially stupid not to be overpaying his very long mortgage. I don’t know anyone with a 35 year mortgage, especially not in their thirties and not a FTB (I work in property)

Show quote history

Do you live in the south east? I didn't think it was that uncommon, but maybe I'm wrong. The plan has always been to reduce the term once the expensive maternity leave/nursery fees are out the way.

OP posts:
Original poster
Cheesypizzaa · 20/08/2023 07:59

BarbaraofSeville · 20/08/2023 06:31

We bring home about 6k in total between us. 1k mortgage, 1.5k childcare fees, 1.5k other essential bills, petrol, food. So 2k left for discretionary spending/saving

Do things like insurance, car insurance, servicing, MOT, repairs, clothes for DC etc, ie anything that is essential but not a regular bill, come out of the £1.5k or the £2k left over? If the latter, that's money out of the £2k already, it's not all free money.

Also, as you've already identified, things like holidays and Christmas which, while non essential, need to be budgeted for, before money is considered to be available for 'frittering'. Something that's good to bear in mind is that a few quid a day on things like coffees and lunches can add up to the cost of a holiday if it's done every working day, eg a tenner a day is £200 pm or over £2k per year, that's the cost of a holiday.

Then you have to consider the cost of things like car replacement and home improvements. While there may be an element in discretion in these costs, ie you can manage with an older car or a leaky roof/drafty windows, there comes a point when these things could need a significant amount of money spending on them, so if you don't have savings, a big loan could be needed. So hopefully none of this is needed in the next few years while you're coping with maternity leave and peak childcare costs.

But I think I'd be thinking about saving £500 pm for an emergency fund/annual costs/holidays etc, and £1000 pm to cover the cost of maternity leave/get a head start on the time when you're going to be paying for 2 in nursery, and keep back a maximum of £500 pm for general day to day personal and family spending on non essentials.

TBH, I'd worry less about overpaying the mortgage in the short term. If you save most of your spare money 'just because' and use it for maternity/childcare costs while needed, you'll mitigate some/all of the interest charged (what's your mortgage rate?) while keeping the money available for the next few years, which are likely to be tough financially due to peak childcare costs.

Then when both DC are at school and you're only paying for wraparound care, then you might be able to start overpaying the mortgage.

But if your DH is wanting to spend more than a smaller proportion of your free £2k, which might be nothing of the sort anyway, he's a fool.

MOTs, car insurance, clothes, hair cuts, Christmas, etc all comes out of the 2k. So yes, you're right, it's much less than 2k most months.

OP posts:
derrydee · 20/08/2023 08:03

How much personal spending do you have?

I would try to save £700 for savings/repayments and then £300 for holidays (or something like this).

You will also need to replenish some savings before you start prepaying on mortgage.

I don't think it is an unusual position to be in and hopefully you will have more money after childcare cost reduce.

Flipflipmania · 20/08/2023 08:04

Cheesypizzaa · 20/08/2023 07:56

Do you live in the south east? I didn't think it was that uncommon, but maybe I'm wrong. The plan has always been to reduce the term once the expensive maternity leave/nursery fees are out the way.

Show quote history

I’m in Kent! So yes

SharonEllis · 20/08/2023 08:05

6k a month is pretty healthy income. I don't know anyone with a 35 year mortgage. Put a small chunk in a savings accout with the current high interest & don't touch it if you want some savings but the priority is to get your mortgage down!