How much money do you keep as rainy day fund?

Really2

£3K-£10K (when it hits £10K I put £7K in the mortgage)

I also have a ASU policy which covers me for £1500PM for 12 months should anything happen.

chucky

Vincenzo wrote: »

6x total current monthly expenditure in easily accessible cash (ISAs)

this made me think that i haven't included my S&S ISA's in my 'rainy day fund'. i have 3 years joint allowance worth.

does anyone include their S&S ISA in their 'rainy day fund'?

Batchy

I think 6 months essential expenditure will be my target (around 6k), once I have house purchase and redecorations/kitchens and bathrooms done.
It will be 12 months down the road. But from day 1 it will be there, it will just get spent quickly, but this is so I dont get stung with finance charges.

So in the short term, Apart from that rainy day target... I have Credit facilities available currently and ready to go at:-
24k loan, instant availablility, which would buy me 24 months effectively (at 9.9% middle of the road option).
9k worth of credit cards if necessary (at only 6.8% this is actually the cheapest option)
4k worth of overdraft if necessary (Last resort)

This keeps me happy in the short term.

wymondham

michaels wrote: »

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

Interesting ... so the state is in effect discouraging people from building their own safety barrier, or having reduced ones! So in reality nobody should go over £6k, but plonk it in lots of hard to find places!!

RenovationMan

Raggs wrote: »

But the thing is, equity in a 3.5million mansion is unuseable equity. No one will remortgage you on benefits, equity release schemes are there to screw you.

It's useable when you retire though, because you can downsize. I plan to do this when I finish work. It seems that you can save for retirement in a pension plan or in house equity and it's not included in any means-tested benefit calculations. Save for retirement in ISAs or other investment or saving plans and they are means-tested. If someone with significant ISA savings for their retirement loses their job then they would be expected to use almost all of their retirement savings to fund their unemployment.

Gold is a good one, but I'd be worried sick of leaving significant amounts at home.

Raggs_2

As a non means tested retirement fund then a house is a good one, but I don't think I'm going to want to move when I'm 70 (or whenever the retirement age is when I get there).

I think collectibles (geniune ones, not fads like beany babies) could be a useful one as well, individually sellable, but pleasant to look at in the meantime.

I'm going to try and go for investing in my house, but in terms of solar/wind power, energy efficiency, own chickens, own beehive, vegetable patch etc etc, basically not need that much cash.

Really2

Raggs wrote: »

As a non means tested retirement fund then a house is a good one, but I don't think I'm going to want to move when I'm 70 (or whenever the retirement age is when I get there).

The idea would be to do it in your 50's when the kids have flown, downsize and invest the remaining cash.

Raggs_2

To be able to jump upto a house big enough to make it worthwhile seriously downsizing in your 50's, is quite a lot of money invested into mortgages and housing. Any savings in taxes surely could have taken a beating from mortgage interest rates?

If you are earning enough to be able to jump that far up the ladder that fast, hopefully you've been smart enough to setup a decent tax free (or freeish) pension scheme or two.

The_White_Horse

all this x6 monthly salary talk is interesting. i would guess it depends on your salary does it not? would frank lampard have to save £540k in a rainy day fund? I guess it depends on your outgoings.

Someone earning 20k a year must have a different rainy day fund to someone earning 50k or 80k or 100k.

Surely the less you earn, the more multiples of your salary is needed - combined with your actual outgoings.

I would have though salary really has little to do with it. surely 6 or 7 times your actual outgoings is safest.

chucknorris

I haven't got much more than a few thousand that is instantly accessable, but I have quite a few fixed term bonds that usually mature just a few months apart, as does my wife (so we can borrow of each other if need be), if some emergency did ocurr that was dramatically bad timing I could always dip into a fixed term bond, it's not as if they are paying a high interest rate so the penalty won't be that high.