Save, don't borrow.

Derivative

Degenerate wrote: »

Are you saying you've not saved enough for a year or two? How irresponsible.

I have personally been irresponsible in the past and squandered large amounts of income with no buffer and had to borrow money from family members. Thankfully it wasn't a large enough amount for me to have to resort to high interest commercial lenders.

My current personal situation? I'm not yet in a position that if I were to lose income I'd be up !!!! creek. I have very little in the way of liabilities.
I don't plan to take out a mortgage until I can contribute a very significant deposit. I wouldn't buy a car on credit. These are things that no longer appeal to me after seeing what can go wrong.

Derivative

Degenerate wrote: »

And how many people can afford that? Are you suggesting that people are over-commiting themselves buying a property unless they can afford a spare?

People are over-committing themselves 'buying' a property when they can't afford the property itself.

Degenerate

EdgEy wrote: »

People are over-committing themselves 'buying' a property when they can't afford the property itself.

Plus assets equal to years of salary in case they end up long-term unemployed, which realisticly means another property. Or are you changing your tune now you realise how absurdly high you are setting the bar?

Derivative

Degenerate wrote: »

Plus assets equal to years of salary in case they end up long-term unemployed, which realisticly means another property. Or are you changing your tune now you realise how absurdly high you are setting the bar?

No, you're setting "can afford a property" equal to "can service the payments on a mortgage".

Those are two very distinct statements. "Afford" is a subjective term.

Degenerate

EdgEy wrote: »

No, you're setting "can afford a property" equal to "can service the payments on a mortgage".

Those are two very distinct statements. "Afford" is a subjective term.

Please explain again, what proportion/multiple of one's salary do you consider to be an adequate fund for a rainy day?

Derivative

Degenerate wrote: »

Please explain again, what proportion/multiple of one's salary do you consider to be an adequate fund for a rainy day?

That depends entirely on personal circumstance. For someone (increasingly common in 20-35 age group) living with parents zero, JSA will cover it. For someone living in a flat paid for by Housing Benefit, enough to pay for appliances going tits up. If you're renting, you want a bit more.

Your salary has no relation to this. You can make £100k and still live in a cheap 400pm flat.

If you're paying off the mortgage and have a shiny car on finance and kids going to private school, you better have a big rainy day fund.

If you have a mortgage to pay off, you already borrowed. "Save, don't borrow" doesn't really apply.

Degenerate

EdgEy wrote: »

If you're paying off the mortgage and have a shiny car on finance and kids going to private school, you better have a big rainy day fund.

How big, exactly, in relation to one's salary? At what level of savings does such a person stop being an irresponsible fool in your eyes?

Derivative

Degenerate wrote: »

How big, exactly, in relation to one's salary? At what level of savings does such a person stop being an irresponsible fool in your eyes?

Did you not read my previous post? It depends entirely on how big your salary and those outstanding liabilities are in relation to each other.

Degenerate

EdgEy wrote: »

Did you not read my previous post? It depends entirely on how big your salary and those outstanding liabilities are in relation to each other.

So there must be some sort of mathematical formula you have in mind. Please elaborate.

Derivative

Enough savings to last until you expect to be back in employment. If that's a year, then so be it.

As I've said you could have a very low mortgage with six figure income in which case you might not need 2 months.

The other extreme would be stretching yourself thin, only just getting the deposit down on an expensive home with poor income. There you might need multiple years to not be at high risk of defaulting.

It boils down to how careful you were initially.