Rainy day savings?

peteuk

My last few threads have pointed to me being debt free very soon! However with our PPI claims we have cleared some of the debts and along with a change of employment we have looked at increasing the DMP payments.....

We are also looking at keeping some in a savings account, for those rainy days/unexpected bills etc. However having spent the last 10 years on a DMP we are cautious that we don't over spend on paying the debts off, we are also cautious about spending money. (we went out for Sunday lunch yesterday and although we knew we could pay it we were still cautious about what we ordered - not a bad thing I know)

I know this is relevant to different peoples situation but how much should I keep for those Rainy days before I start overpaying the debts to clear them. Please bear in mind we have only ever had pence in the savings accounts, any money in would always find its way back to the main accounts.

northerner999

General advice usually suggests that's emergency savings should equate to 5/6 months of living costs.

I would suggest, if you are just starting out, a better tactic may be 50/50 between paying off debts and saving. It depends on the interest you are paying, too.

If it helps, my "emergency" spending this year has been more than two grand. I had no way of knowing beforehand I would need to spend £450 on getting my car through its MoT or £1700 on getting a new boiler in, but t could only have done it by sticking something aside each month. There have been other smaller costs - like suddenly discovering the smoke alarms in my flat were at the end of their life.

Turningacorner_2

It's hard to say and each person is different. It's good to have something to one side, in case of emergencies, so anything is better than nothing. It sounds like you've done an amazing job of shifting your debt and you are so close to being debt free. Good luck with everything x

Dobbibill

Just looking at your signature I can see you have done fantastically well, so we'll done on getting so much debt paid off.

Having an emergency fund or rainy day savings account will serve you well to prevent you getting back into debt when life throws a curve ball at you.

There is a really motivating thread going, the £1000 EF.
There is no set date to complete the challenge as it is ongoing but helps focus the need for it. Many involved in the challenge have had to dip into it for car repairs or vets bills but that's what it's there for, so it prevents the need for further debt. Why don't you have a look, here's the link https://forums.moneysavingexpert.com/discussion/5076051

If you want/need more, you can always build on it when you've reached your first goal.

All the best

andyfromotley

£1000 until you are debt free and then 3 to 6 months of expenses seem to be the usual advice.

peteuk

Hi all

Thanks for the advice, I am in the fortunate situation that repairs to the house (although poorly managed) are managed by someone else, so I don't have to worry about things like the boiler, cooker. The washer, fridge and tumble drier are ours though, and car repairs...

I was looking at £1000, which I would look at topping up if used.

As for the debt pay off, we entered a DMP in 2005 and its been difficult at times. I am hoping that the dispute with HMRC results in a halving of the total left. Who knows?