Saving for a rainy day

A_Couple_In_Love

Hi,

Been discussing with my partner this morning about planning to save for a "Rainy Day".

We will have our own house, on a mortgage, and worried about if one of us gets made redundant.

How much money do you all have as a back-up to cover your self?

Our house will be Insured so not thinking too much about covering the costs of major damages etc.

Thanks.

Sycorax

It depends how rainy it gets...I'm not being flippant but there are some things to consider here, for instance the more one or both of you earns the longer it will take to find a job.
So, typically, in the past it's been said you need at least 3 months money easily accessible should you lose your job. But if you're earning £50k for instance you should budget on a lease 6 months to find a comparable job, roughly add on a month for every £10k you earn.

If you think there is a realistic danger of redundancy then maybe some redundancy protection insurance would be worthwhile, especially if you don't currently have any savings to speak of..

I think the first point of call is work out your monthly/quarterley/annual outgoings (including what you spend on socialising, food, fuel in fact everything you spend), average it out to give a monthly expenditure, give about 10% extra for unforseens e.g. the freezer packs in.

Then bank at least 3 months if your wage is less than £20k add another months worth for every £10k over that you currently earn.

Personally I think that's the minimum, I want a lot more backup than that, but it depends on how much disposable income you have to save.

princessdon

We have income protection to pay out all bills ( mortgage, gas, leccy etc) for 12 mos for redundancy and life for ill health.

We have 12 mos wages as an emergency fund too - some may think this is excessive, but its peace of mind for us.

getmore4less

Do it in expences not income, but split into essential and discretionary so you can see cuurent spending and minimum spending

Remember to add enough to meet contractual commitments like mobiles and TV untill you can cancell them.

This sort of planning should be linked into retirement planning just money that is not locked into a pension.

Once you can meet expences from unearned income you are relatively safe.