How much money do you keep as rainy day fund?

movilogo

That is money to be used in emergency i.e. either avialable as liquid cash or can be taken out from any savings a/c without paying penalty.

Is it like:

Your monthly income * 6
Your average monthly income * 12
A fixed amount like £10,000
Your monthly expense * 12
Your mortgage payment * 12

etc.

I tend to keep our monthly expense * 6
i.e. 6 months normal expense from savings

Not sure if that is high or low.

chucky

at the moment monthly expense * 12 - looking to reduce that to 6

System

I've got about a years worth of mortgage saved up, but it will be dented when I get married in 2 weeks :S

Generali

3 months expenses.

Congrats joeskeppi.

abaxas

I allocate funds to everything, income, car etc etc.

That way there is always a pot to pay for emergencies.

Vincenzo

6x total current monthly expenditure in easily accessible cash (ISAs) but I could make it last longer if needed (by cutting back on expenditure). Also my wife and I both work so the likelihood of us both losing our jobs at the same time is fairly remote.

Fiddlestick

I'm currently building up savings to equal 6 month's wages just in case I ever lose my job.

phil_b_2

I could prob go about 4 years being unemployed with my savings, though that is likely to change when I pay a big chunk of mortgage off at renewal.

RenovationMan

£70k at the moment, but only because I cant put it onto the mortgage and because I'm still waiting for Listed Building Consent for my renovations. Once I get that, the fund will reduce dramatically! :eek:

michaels

Correct answer is under 6k - otherwise you risk a major loss of benefits should you have no income.

RenovationMan

michaels wrote: »

Correct answer is under 6k - otherwise you risk a major loss of benefits should you have no income.

They also take into consideration the value of any other property you may have, so if you have a BTL property or holiday home that has £30k equity, then this £30k is added to the savings amount.

You are allowed upto £16k of savings, but the amount of benefit is tapered from £6k onwards. This is only for certain means tested benefits though.