FTB: how much to put aside for a rainy day?

J_i_m

I don't know how much savings I'll have in reserve after buying my first home but it is my intention to select a place within my means so that I can routinely save at least £150-200 per month which could be used for unexpected costs and future life-savings.

Recently... I've been considering extending the period I aimed at saving for my deposit (and fees). To either put me in a more comfortable position with regards buying furniture and white goods or if I buy a place which needs a new kitchen or bathroom.

Paully232000

calicocat wrote: »

12 months plus for me, but I am pretty cautious and have to have a nest egg to feel comfortable.

Yes, having said what money advice service say i was quite surprised that it was that low at 3 months.
We live quite comfortably at the moment on our salaries, and I sometimes wonder if our buffer of 2.5 years of current monthly spend is enough. I have included everything we spend in a month, including childcare, non-essentials etc. I maybe worry too much.

egoode

I think a minimum of 6 months but I usually have 12+ months worth as I'm a contractor so my work is more volatile than someone with a permanent job.

retepetsir

Paully232000 wrote: »

Yes, having said what money advice service say i was quite surprised that it was that low at 3 months.
We live quite comfortably at the moment on our salaries, and I sometimes wonder if our buffer of 2.5 years of current monthly spend is enough. I have included everything we spend in a month, including childcare, non-essentials etc. I maybe worry too much.

2.5 years?! :eek:

I best get saving

marathonic

retepetsir wrote: »

2.5 years?! :eek:

I best get saving

I think 2.5 years is over the top. Money on deposit loses value to inflation and, if I had 2.5 years, I'd worry about inflation eating into my funds.

Even with 6 months emergency savings, my worry is about inflation as opposed to whether I have enough in cash.

Paully232000

retepetsir wrote: »

2.5 years?! :eek:

I best get saving

It is just due to circumstances that we have that amount, and when reading this forum thread i added the totals out of interest.

I am not the greatest saver in the world but that is what we have.

caeler

I had absolutely nothing! Every single penny when into the deposit and associated buying costs. I then had to live very frugally for the next 6 months so I could build up a rainy day fund. Infact it was the same with the last couple of purchases! :-) I still don't have 3 months worth of salary in the bank! :-S and I moved a year ago this week!

115K

Paully232000 wrote: »

Yes, having said what money advice service say i was quite surprised that it was that low at 3 months.
We live quite comfortably at the moment on our salaries, and I sometimes wonder if our buffer of 2.5 years of current monthly spend is enough. I have included everything we spend in a month, including childcare, non-essentials etc. I maybe worry too much.

2.5 years. Yikes.

We have about 3-4 months at the moment but I would feel happier with 12 months personally.

Paully232000

I see what you mean about inflation eating away at the amounts in savings, but I would rather have it that not.
I would rather have the worry about inflation that the worry about what happens if something breaks down in my house and I have a large bill to pay like a new cooker, washing machine or the like, and i have no means to pay it

marathonic

Paully232000 wrote: »

I see what you mean about inflation eating away at the amounts in savings, but I would rather have it that not.
I would rather have the worry about inflation that the worry about what happens if something breaks down in my house and I have a large bill to pay like a new cooker, washing machine or the like, and i have no means to pay it

I agree. If the rate on savings is 1% below the rate of inflation, every £12,000 will cost you £10 per month (lost through inflation).

This £10 per month can be seen as an insurance premium and works out about the same as what some people would pay for mobile phone coverage along.

It's when you go above this that I feel that the funds would be better invested in something giving a higher return.

FWIW, my emergency fund is nowhere near £12,000.