Savings and owning your own home

poppysarah

Mozette wrote: »

Every time I've built up a bit of cash, I've had an emergency, then it's back to square one!

But there you go! It works.
If you want emergency savings plus some you'll have to scrimp more!

going2die_rich

Microstar wrote: »

I can't believe people keep as little as a couple of thousand for emergencies, that's nothing these days. A boiler replacement or major engine/transmission failure on a car could cost £2-3lk. I wouldn't feel comfortable without at least £10k on instant access (enough to pay a straightforward private medical bill in the event of wife/children/self falling ill).

Maybe if you plan for the worst that much you'd be better off just getting private medical insurance for your family instead. After all, in an emergency private medical costs could easily go above £10k. Consulants aren't cheap after all, so your £10k wouldn't do much in a real emergency.

Northern_girl_2

Microstar wrote: »

I wouldn't feel comfortable without at least £10k on instant access (enough to pay a straightforward private medical bill in the event of wife/children/self falling ill).

An auntie from the posh side of my family once announced that she "simply couldn't understand why people didn't have £100,000 in an instant access account for emergencies" and my mother nearly choked. This must have been a good 15/20 years ago too because we don't really see them any more...

£10k, while desirable, is a lot of money to save for someone on minimum wage to save. Alot of people seem to suggest 3x monthly wage.

Personally I'm paying off debts first because that's charging more interest. In an emergency then I guess I will have to dip into that credit again.

Mutton_Geoff

I've never understood the psychology behind people who "save" money when they have other (higher interest) debt. For the figures we're talking about here, to have £10k stashed away for a rainy day but still owing a similar amount on credit or store cards means you're paying around £2,500 ~ £3,000 a year for the privilege of having money stashed away.

If you've got a credit line, keep that secure and use it in emergencies. It's a rather false security to have £10k in an instant access account whilst paying off a card or loan. Almost all of the emergencies you're likely to face can be paid with a card. By all means keep £1k to one side, but £10k+?

Bf109

Mutton_Geoff wrote: »

I've never understood the psychology behind people who "save" money when they have other (higher interest) debt. For the figures we're talking about here, to have £10k stashed away for a rainy day but still owing a similar amount on credit or store cards means you're paying around £2,500 ~ £3,000 a year for the privilege of having money stashed away.

If you've got a credit line, keep that secure and use it in emergencies. It's a rather false security to have £10k in an instant access account whilst paying off a card or loan. Almost all of the emergencies you're likely to face can be paid with a card. By all means keep £1k to one side, but £10k+?

Who said anything about being in debt?

I have no debt but would want at least enough to survive for 3 months plus £2k in reserve. I would feel better with 6 months and comfotable with 12 months in reserve.

All of which can be kept in ISAs of course.

poppysarah

But keeping it in an ISA means once you have to spend it you can't top it back up.

IMO ISAs should be for proper savings and not emergency cash.

Mutton_Geoff

No debt other than mortgage? No question, a 3-6 month buffer is perfect financial planning. I guess I've been reading the other boards too much and assumed many were bound up with their flexible friends!

**Amy**

Thanks for the interesting points guys.

I cant speak for anyone else but im hoping to debt free very soon, and the only debt i intend on having thereafter is my mortgage, so im thinking a fairly decent amount (as much as possible!) should be saved.

Thanks again

*Louise*

I'd love to have 10k for emergencies but unfortunately it aint gonna happen!

I have a small amount saved in the bank and a CC with 5k on it. If there's a dire emergency then I'll have to use that.

Apart from the boiler going I can't think of anything else happening that would cost thousands (that isn't covered by insurance.)

SandC

I have always heard 3 months salary to fall back on.

I have always saved, little and often over the years. But my friends have nothing at all. I think there is a mentality there and especially for me living alone I think you worry more about the 'what ifs' than if you are in a couple.

When I first bought my house I wondered would I be able to save, but I kept on with the savings I already had with a view to if I found I was struggling then I would stop. What I actually did was have a second, part time job, for a few years until I felt I could manage on my salary.

My main savings are for household improvements, but these are now imminent and I worry about not having the savings there any more after I've done the long, long overdue home things. But I will be keeping some back.

I, and my friends, are lucky to be able to go to parents if in dire straits, but I really don't want to do that, or should I say rely on 'good old dad' like others seem to (nor for my friends use equity in the house as the slush fund - which I am sure they are now finding they can't do any more). I also do not want to put things on a credit card, I want to be able to fund them myself.

You can only do your best, but I've saved £20 per month over 15 years and now have enough in that pot for kitchen/bathroom renewal. You just have to see it as another DD or bill and not give yourself access to it.