Emergency fund- how much?

Skinto_7

I would say 3 months salary, and more if possible.

I know alot of people on here think its more important to pay off all debt rather than save, but IMO i would rather have a managable car loan for example, while also saving should the worst happen, rather than being in the position when you are debt free with no savings and unable to pay the rent/mortgage should you be paid off. Just my preference!!

FireWyrm

As much as you can. That's not being facetious, its real advice. X number of months is a good starting point, but there are people out there who have been jobless for years. Now, I've never been unemployed for more than a month, but on average, it takes about 3 weeks for me to even get somewhere finding a new job. The job market as it stands is abysmal so, on the basis that !!!! happens, I would suggest literally, to squirrel as much as possible. If you never need it, fine, you can buy something nice when you retire, but you'll be damned glad of it if you did need it. Think of it something like an insurance policy, in fact, treat it exactly like that. Make regular monthly deposits into a savings account and leave it there. ING is probably a good place because they offer fairly decent interest and if you take the 'online' account, it's considerably harder to get to your money if you dont know the login information and you have to phone up directly to move money.

Or, as a wise friend once said "Make hay while the sun shines".

josephine82

Good advice everyone- thanks.

I'm a saver anyway so this would just be a case of diverting some of my savings into a different 'pot' but its made it clear to me that I want to do this and keep my house deposit savings and my emergency fund separate.

That way when I do buy a house, I'll still have an emergency fund and won't be like my sister and brother in law who spent all their savings on their flat deposit and then didn't have any money to pay for a new boiler when it exploded!

Brenster

I would agree 3 months / 6 months, me personally, half my wage £900 goes on my debt and half on living (Mortgage, bills, food, spending). So if I was debt free (hopefully in April 12), I can then start my 'emergency fund'.
However I wouldnt have a bank account separately for emergencies, I will just have a savings account.
Anyway this is all wishful thinking for the time being, and emergency fund is a 'nice to have' at the moment, I understand your point, but people on this forum, have enough to worry about, and are just concentrating on keeping thier heads down and working hard with their debt free date in mind, they dont need to worry about yet another thing they havent got.

rising_from_the_ashes

josephine82 wrote: »

Just checked my work redundancy policy out of curiosity and I get 1 weeks pay for every year I've worked here. So 3 weeks pay- That's ridiculous!

It's pretty standard ......

I'd love to have 3 months put aside (and would be in heaven it I could have 6 months) but have only recently cleared my debts and am struggling to put enough away into budgeting pots to cover bills like car maintenance etc for next year (so I don't end up sticking everything on plastic friend again) which I've never been able to do before.

By the time I've paid all the bills and put money into the pots, there's unfortunately not a lot left from my salary to put aside so it will take me years to get anything like 3 months saved.:eek:

You could pop over to the savings board and ask for some advice over there as they may have some more ideas - no offence to anyone on here but I'd also not really expect many on the DFW boards to be able to save large amounts for emergency funds.