What do you aim for in your savings?

I'm 25 and have a year and a half worth of my take-home salary in savings. My goal was always to have a minimum of one year's salary in savings so that if anything were to happen, I'd be able to live whilst finding a new job.

For context, my take home pay is £18k per annum so I have £27k in savings.

This has been a very long process, including self-funding a Masters degree as well as buying a new car. Part of me feels guilty for spending on these very large expenses as I'd have another £25k in savings but at the same time I don't regret either as they've added a lot to my life.

Is this a good amount of savings to have for someone my age? Is aiming for a minimum of (aka not limiting to) one years salary in savings a good idea? Should I be aiming for more?

When I watch financial advice videos they always seem to focus on American young people who focus so much on 401k's and all these things I have no idea about living in the UK. There seems to be a panic to save as much as possible for retirement, but I'm over here stressing about saving enough for a home deposit. Have I got something wrong?

Reply 1

username5027880

Don't get to hung up on is it a good amount for somebody of my age.
The fact is you are saving, that is important, you need to put away what you can afford to.
If you leave it alone, over a period of time, it soon mounts up, that to me is the incentive, to see your savings grow.
Keep it up, all boads well for the future.

Reply 2

Anonymous #1

Hi, thanks for your reply.

I feel similarly - I've never had the best health so, as sad as it is to say, I don't feel such a need to save for retirement outside my work pension contributions.

As I'm looking to buy alone, it's added a lot of pressure so I actually save the vast majority of my income. I don't drink/engage in leisure activities or anything and am quite minimalistic anyway so I find this easy to do. I've taken monthly costs into account if I were to own, yes and my salary would accommodate the mortgage % I aspire. I'm not able to afford anything I would like with a 10% deposit as I wouldn't be able to get a 90% mortgage. I'm aiming more for 30% deposit.

Part of me feels like what's the point and should I just rent because at least then I'd be living in a place in a location that I'd otherwise not be able to afford to buy in for decades lol.

Reply 3

Anonymous #1

Original post by Karisa96

Thanks for this advice. It's a thing nobody really talks about but at the same time I feel like there's this unspoken rule that you need to be focused on the amount being saved. Fact is we're all individuals and something may come around the corner which puts a halt in saving plans and that's ok.