How much savings is enough?

remorseless

I am trying to understand (or assure myself) what would be an adequate about of saving to have available and liquid...

How much do you roughly have on your account or cash or both? Just as a balance... so exclude any locked investments, hypothetical sale of homes and harvest of money tree.

If you needed to access money tomorrow morning, how much could you rely on?

Obviously, everyone has different circumstances, some maybe single, some with family, so amounts would be different.... that's fine!

u0362565

I've heard that you should have 6 months salary as savings. I suppose it depends what you envisage the money being used for eventually.. I think of things like what if i lost my job, i'd need something to fall back on and i guess 6 months salary would allow me to live with out a job for a year or so if i really budgeted.

Bazofts_Revenge

I would rather have my cash invested I have a months Salary available instantly plus my credit card has a large limit on it and I can get always sell some shares or funds and get some money back in my account in a few days if I really needed to. Basically it all comes down to what you personally feel comfortable with.

bowlhead99

remorseless wrote: »

I am trying to understand (or assure myself) what would be an adequate about of saving to have available and liquid...

It will depend on your circumstances and some measure of your ongoing level of unavoidable fixed monthly expenses.

If you have a high mortgage or other commitments and the potential for your income to stop (e.g. you are employed rather than living off pension) and you are responsible for maintenance of a home with appliances like boilers and fridges that might break down and your car needs replacing soon, you might need a lot.

If you are single with guaranteed income and good at living frugally you might not need very much at all. If you are in a couple or with family then maybe you need a lot to be able to support them or maybe you only need a little because you are able to be supported by them.

Obviously, everyone has different circumstances, some maybe single, some with family, so amounts would be different.... that's fine!

I'm struggling to see the point of a poll or collecting lots of data from a bunch of random strangers, when you acknowledge that everyone's data will be different and none of the numbers will necessarily be the 'right' answer for anybody else.

I know people with under £1k of liquid cash and others with over £20k of liquid cash (well, a lot more but that's as high as your scale goes). So some people would select the first number on your poll and some the last. The ones with £1k of liquid cash and £2k per month coming in from pensions and £500k of non cash assets might be quite comfortable, and the ones with £20k+ of cash but paying £5k a month in mortgage, household expenses and credit repayments may be concerned that it isn't enough. So a poll such as this doesn't tell you anything.

I might have only £1 in the bank account but if I 'needed to access money tomorrow morning' I could use my overdraft facility and credit cards for over £20k of spending. Which box do I tick on the poll? And how do you use what I ticked to form a conclusion about your own needs?

masonic

I don't see the point of putting the constraint of being able to access it tomorrow morning. There are a lot of savings accounts and cash ISAs where it might take 2-3 days to transfer the money into an account from which you could spend it. Should those be excluded?

I have about a years worth of living expenses saved in current accounts, but that's not normal for me. It just happens that I can get the best returns from cash in those accounts at the moment.

My own target is to have at least 3 months in readily accessible cash (and I'm happy to put this in accounts where it might take a few days to complete a withdrawal), then use a ladder of fixed rate accounts maturing at regular intervals. For me, P2P has gone some way to replacing the latter accounts, which aren't worth holding at the moment.

I do fear this poll will be about as useful as your other one about rental incomes. Why not just start a discussion without the poll?

HappyMJ

remorseless wrote: »

I am trying to understand (or assure myself) what would be an adequate about of saving to have available and liquid...

How much do you roughly have on your account or cash or both? Just as a balance... so exclude any locked investments, hypothetical sale of homes and harvest of money tree.

If you needed to access money tomorrow morning, how much could you rely on?

Obviously, everyone has different circumstances, some maybe single, some with family, so amounts would be different.... that's fine!

Tomorrow morning might be a bit difficult as it's Sunday but Monday morning I could "access" quite a significant sum of cash. I wouldn't want to use it as it comes with a cost (interest) but it's there should I ever "need" it.

remorseless

masonic wrote: »

I do fear this poll will be about as useful as your other one about rental incomes. Why not just start a discussion without the poll?

for me that was useful! It was actually interesting to read the results and the responses. The poll does not prevent you from discussing, just like you did!
With polls, there're limitation on the question that can be asked and the option. It's a poll, not a survey...

Actually for me one of the most interesting response is that to most polls, regardless of the questions, folks always seems to read more to it...

I am surprised someone hasn't yet brought up the fact that most cards may have £500 limit a day so maybe that is their limit

The kind bunch who has already responded seems to be better than the average Joe with a yearly saving of £1365!

I understand that all survey, polls, even discussion are extremely relative...how long is a piece of string?

dunstonh

Lucky we are not in Greece as putting hands on money for tomorrow would mean 100% in option 1.

How much people should have as an emergency fund/cash reserve really depends on their spending commitments, lifestyle etc.

An old fashioned guide from 20-30 years ago was to have at least 6 months income. However, nowadays, that has become 6-12 months expenditure. The reason being that someone earning say £25k a year in an expensive area would need more than someone earning £25k a year in a cheap area. Also, one person could be frugel and the other could be a heavy consumer spender.

There can also be variances. For those investing to provide an income, I now like to have the disinvestment strategy hold around 2 years worth of cash. This is to avoid having to sell investments at a bad time. You can ride out the worse or even all of the decline if you have that sort of buffer.

So, you should do what is right for you rather than rely on a generalisation.

masonic

remorseless wrote: »

I am surprised someone hasn't yet brought up the fact that most cards may have £500 limit a day so maybe that is their limit

Only if you use an ATM. Besides, when you have 8 current accounts and can spread the money between them using faster payments, you could in theory get hold of £8k in cash over a weekend.

Silian

u0362565 wrote: »

I've heard that you should have 6 months salary as savings. I suppose it depends what you envisage the money being used for eventually.. I think of things like what if i lost my job, i'd need something to fall back on and i guess 6 months salary would allow me to live with out a job for a year or so if i really budgeted.

6 months expenses in case you lose your job (not salary). There isn't much point in continuing to save if you don't earn money.

Edit: sorry, just noticed you say you can survive a year on 6 months salary. That makes more sense. But that is an awful long time to plan for.

I personally have very little. We can survive on my OH's salary should I lose my job.

atush

I think it was the point re: savings of the household.

saying you can live on the OH's money doesn't cover everything such as if they lot their job too, they left you, they died etc.

So for a sungle or a couple or a family how long could you run with the savings you have.

And as said, the question is fairly pointless re amts as some have higher outgoings than others.