How much Buffer should you have?

FlacosFloozie

When I was in debt just getting a contingency fund of £200 made a difference. It meant unexpected bills could be payed without knocking progress to paying the debt off and that meds a huge psychological difference.
At the moment, I'm working with a £500 beffer as we're saving heavily for house deposit and move. Once that's done the aim wll be to keep 3 months expenses and build up. I'm lucky I work in an industy where unemployment is very unlikely and I have good income protection if I get ill.

Teacher2

Pay your debts off first and then save six months net pay for an emergency fund kept in an instant access account and, after that, start proper savings. Returns are awful at the moment. My DH and I have just set up three Santander 123 accounts (two personal and a joint) as, if you keep 20,000 in each account and pay in £500 a month they will pay 3% on the balance plus cashback on direct debits for a £5 a month fee. It beats any savings account around.

RedGoose

I'd like to get 6 months' salary tucked away. At the moment it usually gets to around £2K before "something happens" (car/boiler dying, that sort of thing). Savings rates are lousy at the moment but it's the liquidity (I think) of the EF that appeals to me.
I tuck away some into an easy access account and some into a regular saving a/c (for the better interest), as well as making an overpayment on the mortgage, and I hope to increase that when my student loan ends next year
I know some current accounts pay better interest but I like to compartmentalise my funds a bit more (having savings in a current account would be too tempting for me, whereas to take money out of my savings hurts more).

chelseablue

RedGoose wrote: »

I'd like to get 6 months' salary tucked away. At the moment it usually gets to around £2K before "something happens" (car/boiler dying, that sort of thing). Savings rates are lousy at the moment but it's the liquidity (I think) of the EF that appeals to me.
I tuck away some into an easy access account and some into a regular saving a/c (for the better interest), as well as making an overpayment on the mortgage, and I hope to increase that when my student loan ends next year
I know some current accounts pay better interest but I like to compartmentalise my funds a bit more (having savings in a current account would be too tempting for me, whereas to take money out of my savings hurts more).

I have a current account that I use as a savings account. A tip I was given was if you just want to use it as a savings account, when you receive the debit card in the post cut it up straight away.