Realistic amount of savings

[Marsh212]

Hi everyone ,

My question here is , are we putting enough into our savings

Family or 4 , recent bigger house/ mortgage , 1 child at nursery for another 2 years the other will be going next year.

Both have professional jobs combined income of around 85k as I am part time .

We have around 20k in savings

For a family of four with us being in our early 30s is this an okay amount of savings !?

Think I am just having a panic as to whether we need to try and up our game or not . Saving money , as you can imagine, has been alot harder since starting a family.

TIA

6 months outgoings is the recommended minimum I think.

As the pp says 6 months is recommended. However, with a mortgage and two children needing childcare you have to be reasonable. £20k is far more than a lot of people have and gives you a good cushion.

The key is to keep saving what you can. The more you have the regular habit of saving, even small amounts, will see your savings grow.

It's 6 months outgoings so should be quite easy for you to work out.

6 months outgoings is a common recommendation, but for many at your stage in life, it's going to be hard to achieve, due to mortgage, childcare and other essential costs. With £20k saved, you're going to be well ahead of many. Some can't even manage day to day, let alone save any money, especially an amount as significant as £20k.

As to whether you have 'enough' that also depends on your income stability. How likely are you to find yourself without an income due to redundancy/illness as that can vary hugely.

Make sure you regularly review your budget. Look at all your expenses to see if you're getting the best deal. Be honest about needs and wants. Put money aside for annual and irregular expenses. Appreciate that every pound spent is a pound you cannot save. You don't necessarily need to live like hermits, but equally, don't be the sort of person who spends money like water. Try to find a balance. And play the long game - presumably when your DC start school, your childcare bill will reduce significantly, so you'll be able to save more then?

As people have said 3-6 months of ‘bare bones’ expenses is recommended as an Emergency fund. Savings - for things like holidays or school
fees or alternatively ‘sinking funds’ - saving for replacing house goods like boilers/cars/re-carpetting etc, are different.

So in relation to the Emergency Fund, firstly, calculate your ‘bare bones’ monthly expenses - eg if someone lost their job and you cancelled Netflix, extra curricular, and had basic food spending.

Secondly, to work out if you need 3 or 6 months of expenses, work out if you are high or low risk. For example, if you only have one income coming in, a family with several people to feed, a mortgage and work in a job that has a high chance of instability, then you should aim for 6 months. If you have no children, a no or a low mortgage (or are ahead on your mortgage), stable, steady jobs, then you probably only need 3 months of expenses for an emergency.

Finally, pat yourself on the back that you have any savings at all (this puts you ahead of most people!) and then put a plan in place to gradually build and get to the number.

Finally, pat yourself on the back that you have any savings at all (this puts you ahead of most people!) and then put a plan in place to gradually build and get to the number.
@3LemonsAndLime love this!

Thanks everyone for your replies ! The 6 month outgoings thing I wasn't aware of so that's very useful. Times are tough but sounds like we're doing okay . We will keep chugging on and putting away what we can 😀 hopefully once the kids are in school we can put away abit more !

Could you go back to full time to increase your earnings? £85k with a big mortgage and two children seems tight unless you’re in a cheap part of the country?

We live in a nice area in the North West but yeah it's not London, so money will go further . Going back full time is always an option. I can try and extend my hours over 4 days as well so still have the day off in the week for childcare.

Combined £85k salary, and £20k savings ? What do you waste your money on ?!

Don’t forget to consider pensions as well. These are just as important in the long run.

It’s probably the most expensive time of your life so try not to panic

you have a lot more than average so try not to panic

Cocaine and scratch cards I expect 😂 Or just the usual expenses?!

Having young children at nursery is a very expensive time of life - I would not worry too much if you aren't building up savings fast in the next couple of years. But do save what you can to get towards that 6 months.

Do you have other investments and pensions?

That is where we were during those early years with house deposits, maternity fees, and nursery fees. We would get 20k and then something big in the house would need to be replaced or it would be time for a new car and we would be back to 10.

We were able to slowly build our savings with time and get to the point we can think about hopefully helping our child get started in as an adult.

slow and steady and don’t get discouraged. It adds up.