Am I striking a sensible balance between saving and living now?

[Workingmum85]

I currently bring home £2200 a month after deductions and I am trying to balance saving for the future/retirement and living life now. Below is a breakdown of where my money goes currently and I’d love any feedback to if this is a good balance or any advice to do better

take home: £2200
mortgage/bills/food: 900pm (my half DH puts in the same)
stamp duty pot as looking to move in 5 years: £300pm
accessible savings: holidays/home repairs/xmas and birthdays: £300pm
LISA: £150pm (I also have £40k in an isa from inheritance/redundancy payouts so I’m topping up my Lisa each year to the full 4K from this)
car repayment: £290 due to end in July 2027 and hoping to keep car for another year or two after before replacing
my bills/spends: £270

for context my husband saves around the same amount and we have about 70k in savings (excluding LISA/pension). He’s got a civil service pension and I’ve a (relatively poor) private pension which stands at £53k and total contributions are 8%. LISA is at 6k and I’m 41 years old.

when we move in 5 years our mortgage will increase significantly from £600pm to around £1200pm given we want to upgrade and will have a reduced mortgage term based on our ages (I’ll be 46 husband 50).

any advice? Or am I doing ok?

Any children? On either side?

Yes two primary school aged kids

Zero reference to them! Any savings for them?

Sorry, yes we save what we get each month in child benefit into ISAs for them plus a portion of their birthday and Xmas money

How much? As not listed in op

How much does your dh earn?

£180 monthly child benefit so £90pm each child into ISA. DH earns 40k but has a salary sacrifice of £400pm car lease

Why are you moving house in five years?

I'm not saying you shouldn't move but its eating up £300 a month now and will eat another £600 a month when you move. This is a lot. What's the justification?

A number of reasons. More space; daughter currently has a box room and as she hits her teens she’s going to need more space, we are also looking to move to the same village as the high school so the kids can walk to school. I’m hoping that we won’t have to increase our budget by that much but the figure above is based on our ceiling/max budget that we will be looking with

Thanks for clarifying.

Don't forget that a bigger house is likely to be higher council tax and higher bills. Plus, you may need to shell out for more furniture to fill bigger rooms and any renovations will cost more.

Housing is a big drain on current and future finances but it looks like it can't be helped. I guess you need to look to the even longer term - eventually you may get some of this money back by downsizing when the kids have left home.

Thats quite a large outlay for a car on that salary. Is there any option of this going?

your pension is low and I don’t think you can afford to double your mortgage on your current income.

are either of you likely to have a lot of salary progression?

your DH will have a good pension - have you looked at what it is likely to pay if he works to retirement age and whether that’s enough for both of you?

Your budget seems like it's missing significant categories. What helped me was using a budget planner that included annual spends, insurance, Christmas, holidays haircuts, etc and dividing by 12. Then you get a really picture about where you stand.

Mse has one that works well. Include everything. On paper I was doing fine but my bank statement showed differently. Doing this exercise showed how much it really cost to run my home, how much I could spend for fun and how much to put in savings.
https://www.moneysavingexpert.com/banking/budget-planning/#spreadsheet

Your savings and car loan seems very high compared to your earnings.

Then I got a bank account with pots. So on payday the money gets sorted and I get a real picture of where I stand. I would recommend doing the exercise to anyone.

as your LISA is now for retirment make sure it is in a stocks and shares market tracker as you have plenty of time to even out any bumps in the market over the next 20 or so years so it can grow quielty for 20 years the stockmarket over decades has averaged 7-8% which means it doubles roughly every 10 years so by age 60 you will have a decent sum, I'm sure you already know you can only contribute to age 50 and can't take it out until 60
However generally a pension is a better bet than an ISA if you haven't maxed out your contributions already

If you already own a house then you won't be able to use the LISA for your next house and won't be able to access it until age 60 without penalty. Would be better in your pension or ordinary ISA.

How much equity do you have in your property @Workingmum85 ?

About 370k atm. House is worth around 400k and we’ve 5 years left on mortgage, then when we look to move in 5 years, we are looking at around 500k budget so potentially taking out a 100k mortgage over 10/15 years

Another one puzzled over the Lisa. Is it because you’re getting 25% bonus rather than 20% tax back on pension contributions?

Or perhaps the op states mortgage but actually rent? Otherwise makes zero sense

I don’t suppose the op will be back to clarify though

Also surprised at the Lisa given you already own? unless the current house is in someone else’s name maybe??

You are saving around 35% of your income, and a further 13% on debt. Id say the balance is meaning you live a more frugal life than many with your household income.

Out of interest, if you have 70k savings, why did you buy a car on loan?

Given you are both on modest salaries - how have you managed to £370k equity?

That’s just one of the odd things about this scenario!

Maybe they bought the house fifteen to twenty years ago for a lot less than it's worth now and a chunk of the equity is from price increase. We only bought ours ten years ago and it's increased in value by 150k , 50k of that is probably renovations we completed that it badly needed but the rest is just market growth.

Well, yes, maybe.

Hence me asking