How much should we be saving a month?

[Cheesypizzaa]

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).

I suspect a lot of people have mortgages running into their 60s, if not before then now to get through CoL. We bought same time as a few friends and we all opted for 35 years, no idea what they're on now, it doesn't mean very much as so much can happen in the term.

Anyway OP, we have a similar income but bigger mortgage (but no childcare fees anymore) I am not overly stressed about the mortgage term because we will pay it down when the kids are grown (when we are mid 40s) or we will downsize, or both! The priority right now is a family sized home with a comfortable income for a young family. I am not spending their childhoods stressing about or prioritising the mortgage. We have plenty of time for that. We save for more immediate things. No point aggressively financially sorting ourselves now at the expense of our family life, we need the money now we have dependents. That said, your mortgage is relatively low to your income so you could afford an overpayment if you're happy with the rest of your lifestyle/goals.

Only caveat I would add to that is pensions though, we have very good pensions, that might be something to look at too.

It’s been established that far from £2k In Reality

Jesus there's some really nasty and butter responses on this thread isn't there.
Hang on in there OP, hopefully someone might come along with some useful advice/chat for you!

• bitter

😐

where are these nasty bitter posts?

We have zero savings essentially. Similar incomings and expinditure. Childcare's s bit more. £2000 doesn't go that far once you e paid 4 weekly shops, car repayment, kids activities, a haircut/ colour for me, a cleaner once every two weeks, plus the odd coffee. We have nothing left really and we don't have a particularly flashy life. I've given up on saving until my little one is out of full time nursery. Just not possible at the moment. I have a decent pension though that my employer makes a huge contribution towards.

Well, you can’t afford everything you want to do - a second child, to go part time and to reduce your mortgage term. Remember if you go part time, that’s a big pension hit as well. It also sounds like you don’t have any savings/financial cushion in case of emergencies - new car, one of you loses your job, illness etc?

The average first time buyer age is 32 and the average mortgage term for a first time buyer is 30 years, with 40 years becoming more popular.

So its hardly unusual... in fact it's pretty average

I have no doubt about that

but to think you have “plenty of money” and have a 35 year mortgage and very little pension… appears somewhat of a contradiction

I very much doubt the demographic you describe @missmollygreen thinks they have “plenty of money”

and given the dh in this scenario does - that was my point

Yes, fair point about the "plenty of money" part

We have a similar income and similar outgoings (though we spend more on mortgage and less on childcare). Our mortgage is 25 years now and we are mid 30s. Public sector pensions. Two kids in childcare. And we feel so squeezed, we struggle to save anything. We put money away each month for car repairs, presents, home repairs, clothing etc. and we can afford to cover this, but it really is the basics. We don’t have money for luxuries, except activities with the kids. We are lucky, definitely, but things don’t feel comfortable.

Thank you for everyone who's taken the time to respond, I really do appreciate it.

In terms of my partner's "we have loads of money" comment, I agree he's probably looking at things from quite a short sighted position (i.e. we can comfortably pay our bills every month with money to spare) and not considering the bigger picture in terms of length of mortgage etc.

Lots of food for thought here!

Have you spoken to him op?

First thing I’d build an emergency fund of 3-6 months outgoings. Put that in a high interest account.

have £1k in an easy access for unexpected things like the washing machine breaking.

Once you have those you can look at overpayments. Look at what you need to pay to reduce by 10 years.

I’ve also got a house/ car account that I build up to pay for our insurances, etc in full as that can save a lot.

Money saving expert has mortgage overpayment calculators that are really useful and the meaningful money podcast and Facebook group are really useful too.

I have our savings and overpayments set up as standing orders so I see them as another bill, I find that helps with our overall budget.

Entirely depends on your mortgage rate

If you have a low rate you're better off sticking spare money in a high rate interest account then use that to pay off a good chunk when your fixed rate ends

(Its what I'm doing)

People think over paying is always a good idea. It isn't.

As for % of savings
We go for 20%
Have a similar income