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?

Sorry for the gaps, will clarify as best as I can.

LISA for a top up retirement pot, not house move. Opened just before the cut off at age 40. Seemed sensible to do to get the government bonus

House Equity: bought when it was cheaper and house prices in this area have since rocketed!

car. Sorry this wasn’t clear. I “loaned” myself the money out of my ISA to buy the car, but wanted to ensure the money went back in so treated it as a proper loan and set direct debits back into the ISA to repay over 3 years

hope that clarifies

How old are you and dh? Any chance of increasing earnings?

You’re 41 and total pension pot of £61k? I’d be ramping up that a fair bit

My 2p....

LISA for a top up retirement pot,

This is fine but ONLY worthwhile when paying 20% tax rate.

Your kids ISA just stop....unless your own are being maxed out there are only downsides imo. all you are doing is giving yourself less financial freedom/flexibility. Save the £ in your name and when you child is 18 you can keep it until they need it / ensure its not pissed up the wall on shite.

I'd look at increased earnings either via job or side hustles.

Other than that sounds good!

Ah 41

so another 25 years at least
promotion prospects?

I think you've got more than enough balance between savings and spending. You're almost mortgage free on a £400k house. When you do move in 5yrs time the £300 you've been saving for stamp duty can go towards the new mortgage. I can't see that being £1200 a month of you're only planning on borrowing £100k. You've got a large pot of savings between you, the only thing it might worth increasing is payments to your pension. I'd be happy and feel comfortable if I was in your position.

Yes hence me starting the LISA and maxing that out each year. I might look to reduce the amount I put into accessibile savings and increase my pension contributions too but then I come back to the balance of ensuring I’ve enough to live a nice life now as well, retirement is not guaranteed especially with my family history of cancer 😅 such a juggle lol

husband hoping for another promotion soon, I hope to increase my earnings too but I’m in a low paid profession so no guarantees

Do you have private health? Critical illness cover? Income protection? Life assurance?

Private health, critical illness and life insurance yes. Did look into income protection but £50pm, not sure if it’s worth it or better putting that £50 into my piss poor pension pot 😂

And that is a company benefit or part of the £900 expenditures?

Is there adequate funds for the dc to do clubs, activities etc? Can't see any listed. How about holidays? There doesn't seem to be much fun money in there.

Yes it’s surprising how the children aren’t even mentioned in the op

I know you have later said you save their CB but given how tough things are this gen - im focusing very much on saving for my kids

two parts to the qn - 1) are you saving enough, and 2) are you maximising what you’re doing with savings?

1. This is really a qn of how much you want to prioritise the house move and where you can squeeze /cut costs, and/or increase your income. It sounds like you’re being very sensible with the possible exception of the car finance deal (vs buying something outright). I’d say if you’ve got a goal in mind of moving then really push on this for the next 1-2 years.

2. Is really what you do with the cash and savings ie

• emergency cash - for non negotiables. Once this is at an amount you think reasonable (eg £2k) move onto the rest
• life fun pot - birthdays, trips etc - maybe have a monthly budget (could be bit bigger in summer hol/xmas) any spare goes into the…
• house move pot - if this is next year then consider fixed term saving or notice period accounts for the cash or ISA balance you’ve got already -
• pensions - I think the LISA for pension sounds a decent idea because of the govt top but only if it’s put to work in the stocks and shares version. Make the most of any work matches in your normal pensions.
• investments and savings (for you and kids) - again, a modest amount of £50 a month will really grow, especially if it is not (all) in cash

Kids don’t do much extra curricular now. Eldest recently given up football and now just does cubs, youngest swimming. All cover led by what goes in the joint

in terms of fun money, this is what some of the accessibile savings goes towards. We live quite sensible-very infrequently have take outs etc but we love a holiday and do a foreign break and a couple of uk caravans each year

luckily my hobbies are cheap - running and reading (library membership worth its weight in gold!)

In which case you are saving nearly 50% of yoyr income.
That's a massive %. If you are all foing everything you want, great. But there is quite a lot of flexibility to go and improve life or enjoy life more if thats what you want.

Or if you are a DB NHS type worker. I pay higher rate tax but still have a Lisa for pensions as paying more into my pension doesn't get me any extra output when I claim it and I want a bridge to cut down my hours before whenever I'm allowed my pension at 80+ yo probably

Very little being spent on the children, which i suppose is not that surprising of young - but brace yourself for clothing budgets and school residential and basically them generally when they’re teens.

How much do you spend on food?

your total family pot is £6.6k for
Christmas
Birthdays
holidays
And home repairs

im guessing you have modest holidays and no big home repairs!

what about family trip to a theme park, meals out, takeaways, that kind of stuff?

We’ve been lucky on the home repairs and one abroad holiday a year (about 2-3k) plus some uk caravan hols. Until recently I’ve been putting £600 into accessible which has afforded this but reigning it in to save for stamp duty

we don’t do much in the way of day trips, a theme park or something once a year on an inset day and Christmas bits. Tend to favour a caravan weekend away a couple of times a year instead.

lucky kids don’t cost us much atm, youngest gets lots of clothing hand me downs from
a cousin and vinted is brill, but yes, this will inevitably increase as they get older 😅

What is your monthly grocery bill? Your mortgage monthly payment?

looks like you and family live very modestly. If you are all happy, no need to change

Monthly mortgage is just under £600 and our weekly shop averages at about £80pw

yeah we are pretty content, I’m just a constant worrier 😅

Wowsers - that grocery bill, especially with the exponential cost in food, is eye wateringly…. Cheap!

It wouldn’t be my way of living, but if all happy - then why fix what’s not broke?!

Haha I meal prep like a demon! Kids get free school lunches which helps and they eat at grandparents one evening too. We balance out nicer meals with cheap nights such as frozen pizzas and jacket spuds and beans, I don’t feel like we go without

Well then it’s working for you. So… just relax in to it

Do you not do the meals out, pricer end family days (like zoos, theme parks etc) and very frugal grocery shopping because you and family don’t want anything else or to be frugal?