Discover tips and tricks on how to save and invest money by Oval Money

On the face of it, this question may look a little like ‘can I be too rich and happy and lucky?’ One of those really under-your-skin-annoying-as-hell questions.

The initial, and obvious, answer is no.

However, there are added complexities to this question that are worth discussing.

1. If you have savings but aren’t enjoying your life then maybe loosen up a little.

If you are debt free, your bank account looks healthy, you have all your outgoings covered, and you are happy with your emergency fund and other savings pots, then maybe you can loosen your purse strings a little.

Whilst we’re not exactly saying you have too many savings, it is also important to be able to enjoy your life and the money you work so hard to earn. It’s important to have all the main bases covered, but if you do, then there is no harm in treating yourself a little. It’s not often we write this down, but if your savings are looking healthy then maybe instead of putting that extra 50 quid into them, you can use it to take yourself and your loved ones out to a well deserved treat dinner.

2. Take stock of how much you have saved and in what accounts.

All financial experts recommend that your ‘emergency savings fund’ should have enough money in it to keep you going for anything between six months to a year if your circumstances should suddenly change - such as with redundancy or illness. This includes all bills, rent, car payments, phone charges, food costs; everything.

If you have a look at your emergency fund and it has enough in it to cover this, then you should stop putting money into it. In this case, we’d say that you have enough emergency savings (not too many though).

We’d recommend you begin diversifying you savings. For example, have you taken a look at your pension? Is there space to pay more money into it than you are? Perhaps you could make one off contributions (depending on your plan), or you could ‘up’ the percentage of your monthly income that you pay into it.

What about your student loan? Although in the UK our student loan debt is taken straight from our pay packet before we receive it, we are also able to make one off payments. If you have not already you should work to pay off your student loan debt. Although not exactly ‘saving’, it is a positive financial move, as being debt free is the best way to secure financial security. It will also mean that you do not lose that percentage of your monthly income for the rest of your working life.

3. All your eggs in one basket is not a good plan.

We are not saying that you have too many savings per se. Instead, we’re saying that you can have too many savings in one place.

We were all around for the 2008 crisis. We all saw what happened to Northern Rock. All your eggs in one basket has famously never been a good plan (there’s even a saying about it), so if you are talking major amounts of money here then we recommend spreading them across a number of institutions. The current savings protection limit in the UK is £85k. This means that if something happens to the bank, you will only be guaranteed to have 85k of your money returned to you. So if you have more than that it is something worth thinking about.