How much Buffer should you have?

tori.k

enjoyyourshoes wrote: »

If you have extra cash it might be worth generating savings through Regular savings. FD & HSBC do RS a/c at 6%. Nice little pot of cash and accrued interest at the end of the 12 month plan. Put this into high interest current account and then:-

Following year set up multiple with the savings from previous years contributing to the new ones etc.

Don't get fixated on 'buffers' etc just get into the savings habit with a goal at the end of the 12 months (it could be a trip of lifetime, new savings plan, etc etc)

So what happens if you have an emergency and your money is tied up for 12 months, regular savings are great but it would be wise to have some cash stashed in something like the TSB classic plus account that pays out monthly so you can access your funds if you need, without losing the interest.

zenshi

I want a buffer of £500 in case I can't get to the bank on time. Then £1000 as an emergency fund for unexpecteds.

Was halfway to my buffer with zilch in EF when washing machine gave up the ghost! At least I had my buffer to use.

rogue999

Depends on what you class as an emergency - for me that would be a broken boiler/washing machine/etc, for which i have £1000 stashed.
Job loss obviously much more serious and while we could survive on one salary (just!) we need 2 and i'd be straight down to an agency to get ANY job.

You mention career change? Is that an emergency or something that needs planning.

While i'd love to save up lots in all these regular saver accounts, I really do think that overpaying my mortgage gives a much better return and that is my personal priority. I have 11 years left on my mortgage and roughly £70000. Overpaying £200 per month pays my mortgage off 3 years quicker and saves nearly £3500 in interest alone.

lumpyspaceprincess

I've never been fortunate enough to have an emergency fund / buffer yet, though I'm working towards it. Presently stands at £16.03, and it is very much not to be touched! I'm intending to start putting a small amount away per month just to build something up, though the DMP is my priority really!


Just realised I do a save as you earn thing through work which should come up in 18 mths and have about £900 in - so I will add some of that to it.

lessonlearned

I think a lot depends on what In work benefits you have, ie whether or not you get sick pay.

When my sons bought their properties I advised them to take out stand alone income protection policies in the event of unemployment or sickness. One gets sick pay (don't know how long for) but the other doesn't.

The policies would pay out would pay out enough to cover their mortgages and basic living expenses for up to 12 months.

They are trying to build up emergency funds and do save a bit each month, although budgets are tight and it's slow going.

Emergencies come in all guises though. My youngest son's cat got hit by a car. VEts bills are not cheap!!! Although he had insurance for the cat, it onlycovered half the vets bill, so it was the Bank if Mum to the rescue. (Well I'm very fond ofthe cat:rotfl:). He's cuddling up to me now .........

Maybe take a look some insurance whilst you build up your fund. It's peace of mind.

SLZ

alxx_b wrote: »

I was wondering how much financial 'buffer' one should accrue for emergencies?

From my recent job loss to finding a new job I realised I had no fund and was in danger within 2 months. For the future I intend to have an emergency fund of £10,000 set up which should see me through up to 5 months if I lose my job, get sick or something else unexpected happens.

Everyone is different as some may be able to get away with £1,000 and others will need £100,000 but for me, £10,000 is ideal I think.

chelseablue

I currently have £11,000 in savings


This would allow me to pay the mortgage for 15 months while looking for another job (partners salary could cover everything else)


Hoping to get to £15,000 by end of the year (wish me luck!)

MEM62

I have around six months living costs readily available and other assets (S&S ISA) that could be liquidated if I had to survive for longer.

nkkingston

One of the sites I was looking at recently suggests you put the equivalent of a third of your salary aside for emergencies, the same as your salary as a starting point to build your pension (depending on how far from retirement you are, and what pension options your employer offers etc), and anything beyond that for investing. The first two need to be safe options.

Obviously, the site in question wasn't designed with people in debt in mind, but I think the first point still holds, and then debt, then pension (again, depending on age and employment situation etc).

A4445

My emergency fund is currently £2700 I'm aiming for £4000 by the end of this year. I'd like £6000.

Fortunately my debts only total £75 BNPL on Very:T