Have we been reckless spending savings on our house in our 50s?

[ThePandoricaAwakes]

Hi all, looking for a bit of perspective please.
When I met my husband, we both owned small properties. We decided to sell both and buy somewhere together. His flat sold quickly, but mine (an old Edwardian house needing a lot of updating) didn’t, so we ended up renting it out for about 10 years.
Last year we tried selling it again and luckily found a buyer who was happy to renovate. The sale allowed us to pay off both mortgages and left us with around £80k.
Sadly, my mum also passed away, and I inherited a third share of her house, which was about £85k.
We hadn’t been happy in our home for a while, so we decided to move. We sold up and used the proceeds plus savings to buy a new house, leaving us with around £35k afterwards.
Since then, we’ve spent most of that on renovations and now have about £7k left. The house is now worth roughly £560k, so we’ve added value, but I’m starting to worry about our lack of savings, especially as we may need to spend another £3-4k on repairs soon.
Have we been a bit reckless using most of our savings like this? We’re in our 50s with no other debts. How much should we realistically have set aside at this stage? Or am I worrying unnecessarily?
I do realise we’re in a fortunate position overall, so I hope this doesn’t come across badly.
Thanks in advance for any thoughts.

It's done now so you can't turn the clock back. Why don't you just prioritise saving from this point onwards?

You can't undo what is done. If it were me I probably would have spent so much on the new house. But without knowing your family dynamics it's hard to say.

I presume you are mortgage free still in the new property? If both of you are working I wouldn't be overly concerned as you will be able to save each month towards those repaired you need.

I you plan to move in the future and move to a smaller property you will free up some equity to be spent in your retirement years.

There is no set amount you should have. You have money, it's just tied up in your home. Most people do not have £7k in savings so I wouldn't worry too much and just prioritise saving now and build back up as that seems to be your worry.

Are you both working? Two salaries? If so, you're now mortgage-free and should be able to rebuild your savings faster than you would be able to if you were still mortgaged. You should be able to save monthly what your mortgages previously cost you.

I wonder if, having had substantial savings (the £80k+£85k), not having that in savings any more is why you feel vulnerable with 'only' £7k?

Personally I don't think you have been reckless. You have provided yourselves with a comfortable mortgage-free home, and still have a decade or so before retirement ages in which to rebuild a savings cushion. Reckless would have been quitting your jobs to live off your savings until exhausted, or putting the lot on Lucky Boy in the 3.30 at Aintree. You've been quite prudent, in my opinion.

@WhereYouLeftIt yes mortgage free with 2 full time wages. I think you're right about having that much and now only 7k I do feel vulnerable. I'm from a working class family and never thought I'd have that much money, so feel worried now it's gone!

Ignoring what you have spent on the house, it's current value etc.... what is your financial situation?
Do you both work, are you saving, do you have pensions, when do you intend retiring, what will your pension income be (don't forget that company & private pensions give you a TFLS)?

Agree that just owning a house outright is not the end of the financial slog, you have to maintain and periodically update it but that said, owning your ideal house and never having to think about moving again is a great position to be in.
I know people who say "my house is my pension" but IRL, how does that work unless you are willing to move to a cheaper and/or smaller house?
Likewise all the talk of downsizing.... we are not doing that as having got our ideal house and done everything we want to it, why would we want to move to something else?

You have invested the money wisely. You can access half a million if you downsize etc. Try to save and live your life.

Do you have good pension provision and a few years yet to retirement? If so I wouldn't worry too much as you have time to build up your savings buffer.

I have done the opposite and spent the last 10 years prioritising my pension but now, with only around 7 years to go before I (hopefully) am able to retire, I am putting all my spare cash into saving for home improvements that will hopefully mean my property is in really good shape when I retire to minimise the amount I need to take out of my pension income for home improvements.

You’ve missed out the most important context. What pension provision do you and your DH have already?

@NoelEdmondsHairGel we both have been paying into a pension since 16. I've been paying into a local government pension for 10 years (I consolidated my other pensions). We'll do ok I think, we won't be rolling in it but should get by! We may downsize in the future when our son has left home

Agree with PP - if you are mortgage free and both working full time, you should be able to build up savings quite quickly. If you want to be really disciplined about it, set up an automatic transfer for each pay day to move the amount you were previously paying on your mortgage into a savings account or ISA. You know you don’t “need” that money to live day to day, because you didn’t have it before you paid off the mortgages.

Equity, pensions (one presumably a DB scheme?), mortgage-free, 2 full time salaries, 7k cash savings..

I think it sounds fine 👍

You should be fine then. Minimum of a grand a month in savings will soon build you back up.

Yes, you’ve been so reckless, spending your money on a house you can live in which you like.
I mean just think about how much money you would have now, for a future which is no way guaranteed, if you had lived in a shoebox all these years? 😂
Are you kidding me?
Money is not for hoarding. Money/savings are not for making a general point of how good you are at saving.
They are cushions for what you need, for when you want to spend it. They are not to be left, they are not for those you leave behind who can build up their own savings, even if it is more difficult than when you were a young person (was it really? I remember being pretty fucking hard up in my first, uncarpeted, un window dressed flat)
There is not an external body judging you and your savings.
There is not somebody, somewhere measuring you. There is not a certain amount you should have by a certain time.
The most, very most, important thing you can at this stage, is to look seriously at YOUR pension. Pension wise might help with that, or I can if you want to provide actual figures or DM me. Best of luck to you

We’ve done something similar. And it’s true that we could have done less: what we have done isn’t frivolous but isn’t all structural or cheapest option either (examples would be new doors and windows, new internal doors that were previously so warped they didn’t actually close, solar panels). I believe we have ‘added (some) value’ but I also think prices have fallen so we might get 50k less if we sold today).

Owning a house isn’t cost free. I think that we will need to go on maintaining. I wouldn’t panic about what you have done but I would really prioritise saving for the next couple of years at least; work out an ambitious saving goal and try to meet it, preferably before incurring more big bills.

Surely the point is to work out how much income you’ll need for your retirement and then work out to get it.

There are potential problems having all your savings tied up in the house. But as pp say, you've done it now. Maybe have a couple of frugal years to build some savings. Enjoy your being at home rather than taking holidays for example.

We did similar, and are now in our 50s prioritising putting as much away as possible into savings for when we retire. We’ve got a goal in mind so that helps. Not scrimping though.

It sounds fine to me but I do agree with you that you need to think about ongoing repairs, a lot of people don't put that into their calculations.

I heard recently that home maintenance is about 1-3% of a house value per year - that is a big range but I guess it covers people that redecorate more or less often and the different ages and sizes of properties.

It would be worth putting a regular amount into a 'maintenance fund' so you know you have it when needed.

Just start building up your savings again.

It sounds as if you are well sorted for pensions - with you both presumably having full state pension. But discuss with your pension provider / advisor how it would look if you retire at 60 / 63 / 65 etc - because often you need savings to cover any gap between early retirement and when you can take your pension and still leave you with enough.

But now you have done your refurb etc, and know how much the running costs, bills etc are in your new house, work out how much you can save per month and put that in your savings account as soon as your salary hits.

Money spent on a house you love and are happy in is not wasted - enjoy your home!

I’d aim to save 6 months worth of bills asap. Unfortunately not even public sector jobs are recession proof these days and you’d be financially vulnerable if one of you lost their job.

I agree with most.
Firstly that it is done and nothing to be gained by questioning it now.
Secondly, the crucial question (that you have now answered) is it depends on if you are both working, both working FT, and both have decent pensions. As the answer to all those is yes, then I wouldn't worry.
Of course, 'being in your 50s' might mean you are 50 / 51 or might mean you are both about to turn 60. That also makes a big difference.

Doesn't sound reckless to me. You are mortgage free, which puts you in a great position. If something bad happened and you had to rely on your savings, you are in no danger of losing a roof over your head. Everything else in life could be cut back if you had reduced means.

You sound in a good position. Two jobs, decent pension and a mortgage free house that you actually like.

If you are worried, but are still working, go through your current budget and see what you could save, and/or plan to put current mortgage payment into savings when you have finished paying the mortgage. You have time to rebuild a good cushion of savings before retirement or another emergency.