How do you allocate your money?

A question about : How do you allocate your money?

Say you have Ј200 a month 'free'.

Ј100,000 mortgage at 3%
Ј6000 Savings at 2.5%
A house that needs a new bathroom. (going to be living here 10+years)
A holiday would be nice too

How would you/do you create balance in where you send your money?

I've been trying to figure out the best way to do a bit of everything and thought some peoples opinions would really help

Best answers:

• Do you have any savings currently?
• It all depends on you and your preferences and plans.
  If I was going to be in the house for 5-10+ years I would do the bathroom first properly, I'm in it multiple times a day and it's a long term investment of happiness.
  If I was moving soon and the bathroom was saleable, I would spend as little as possible to freshen it up.
  If I was moving and wanted to step up the ladder but was unsure on the LTV I would get I would pump every penny into the mortgage.
  If I had enough savings for 6 months of unemployment, I wouldn't use savings(worse rate after tax).
  I love holidays, so I would use some for a cheap affordable holiday.
  No right answer, just try and maximise your happiness (including long term, which is where mortgage repayments come into it).
• Good points coldcazzie and martinsurrey
  I've updated the first post to show Ј6000 in savings aka emergency fund and that we're planning to stay in the house a fair while
• I tend to sling a bit of money at everything, the proportions depending on my priorities at the time. I have more surplus cash, at the moment, so it's Ј70 off the mortgage, Ј100 towards long term savings/ISA, then the rest gets split between new kitchen/ holiday/ new computer etc, depending on what's annoying me most. It's not very focused, but it works for me.
• Have a good review and try and find more spare money
  It is about priorities after essentials.
  There are probably discresionary things you allready spend on that should be in your priority list along with the bathroom and holiday.
  Sky/Virgin,car,mobiles, nice meals, booze fags etc.
• How much savings are you comfortable with?
  Many people say they want 6 months of basic living expenses covered by savings, but we knocked it down to 3 since the likelyhood of us both losing our jobs at the same time is slim and one of our wages will cover it.
  After that we put everything into the mortgage. Foreign holidays can wait until we have paid it off.
  All depends on priorities
• I'm a newbie but I've been lurking, reading and learning for a few months now.
  I split my money between savings, mortgage OP and holidays / fun stuff. Paying off the mortgage is a long haul and so I knew I had to allow for frivolous stuff too.
  I wouldn't bother saving any more. I would split the bulk of the money between mortgage and bathroom but allocate some to the holidays/ days out fund especially as you have children. I find it much easier to take my children for a day out when I have a pot of money specifically allocated for that purpose. I don't feel guilty that it hasn't gone on the mortgage.
• Hi SmlSave, I'm v impatient and find it hard to chip away at lots of different pots at a time so tend to go hell for leather on one goal and then move on to the next. I like to-do lists and ticking things off!
  But agree with everyone above that it's totally about your own preference. The savings pot looks v healthy so well done on that, maybe focus the money elsewhere for now? SR
• Thank you for everyone's replies I guess I was really wondering whether I should concentrate on one thing at a time or do a little bit of everything. Looks like the advice is mainly to do what feels right/most important.
• In your situation i would do what's most important to you first to get it done then save :]
  Good luck