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The money we are using to get the dog is some (if £850, nearly all) of our savings
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This is the most important thing you have said. NO dog is worth leaving you with no savings, especially as you have young children.
I would advise getting a lovely "child friendly" tested dog from rescue. There are some lovely dogs waiting for homes, so it would do them a favour as well as not raiding your bank account. Puppies are really, really hard work for the first year and as you have young children then it will be far easier to integrate a rescue dog into your family.