Do you have an emergency fund ? If so, what is it?

FIRSTTIMER

Just being nosey as I soon become a mortgage/house owner

jlaw4

we are currently buying our first home, and we are working on having between 3-6 months bills and mortgage payments as an emergency fund so that we would have some level of breathing space. However, for the first few months we need to spend on the house then it'll be savings time. Sometimes its best to just have a credit card as an emergency too, you may not be able to get a loan or get your hands on cash quickly but if your boiler broke you could use it. just an idea

FIRSTTIMER

yeh I am thinkin of that actually - I might take out a 30 month 0% card on day of completion

jlaw4

Its something to consider but only if you would make payments to reduce the balance towards the end as we used one recently only a 6 month interest free offer and ended up paying £4500 off in a month! We are using our existing cards to buy essentials but anything else i'm trying really hard to save up for instead!

ThePants999

I ensure that I always have at least three months' expenditure covered. On top of that, I budget for unexpected household costs, putting a certain amount monthly into a maintenance fund.

Marvel1

I have about £20,000 which would cover me for about 30 months if I lost my job.

Lauralou79

I'll have a few thousand left after fees and furniture etc. So that should be ok. Don't want to rely on credit at all. I have no credit now and don't want to start that again!

getmore4less

There are two levels to this
Emergency(off budget expense),
Disaster(loss of income)


If you budget properly you can have very few emergencies, each should happen only once as the budget should be adjusted to take any future occurrence into account.

a decent tool/spreadsheet helps a lot with this, give everything you buy a life and plan replacements, think longer term as well, 1-2 years in minute detail, 2-5 include medium term stuff and estimates for the spends/income, longer term things like kids, house moves and retirement planning need thinking about.

if you have the cash flow often many can get by with no emergency fund you just use free CC money or dip into the longer term savings and don't save for a month or two


Loss of income is the one most people think of as emergency, this is a disaster, for this you need access to funds till you restore income, CC can work for instant access for a month or two but the reality is you need some relatively easy access funds if it drags out.

with a good budget you can know you min spend footprint that you could achieve with cutbacks, helps to not have a lot of ongoing contracts think of these like a debt they still need paying if you have no money.

eg a 24 month phone contract at £20pm is really a £480 debt £20pm add up all your annual contracts.

Depending on how quick you think you can get another job, double that and have that much expenses accessible, does not have to be instant access, could be a high interest savings where you juts loose a bit of interest, premium bonds, shares etc.

Loss of income is really part of retirement planning as the ultimate goal is to have saved/invested enough to replace your income for good.

I think a good age to aim for is around 50-55,if you can manage to be debt free and have enough to live off you start to get options like reduce or give up work, keep saving to have more later, spend more etc.

The 50-55 target give room for a couple of slip ups along the way and still be able to reduce workload by 60-65.

A very rough guide is, spend 1/3, buy a house with 1/3, save/invest 1/3 and in 20-25 years you can retire if the mortgage is paid off and debt free

csgohan4

as much as you can get

ruperts

I budget for average home maintenance costs so they're covered and for loss of income I have roughly four months of essential expenditure in cash after which I'd have to start selling investments.

Something that isn't mentioned as much but works equally well is having an emergency job to replace at least some of your income. I know the manager of a local restaurant and he says they'll almost always hire anyone for any length of time as a kitchen porter because they get through them so quickly. It would be minimum wage and not something I'd want to do but would keep the wolf from the door while I was looking for something else. I've also thought about getting whatever qualifications are required to become an uber driver and then budgeting for start up costs, so if required I could quickly put everything in place and start bringing in some money from that. That would have the additional benefit of allowing you to work whenever and for however long you wanted so if times were really hard you could be working all day every day. Basically anything that has no or little barrier to entry and suffers from high staff turnover has potential to become an emergency job. Obviously if you lose the ability to work then it's a different scenario.

Dandytf

Tried and failed multiple times to save emergancy fund during dmp years.

Not too concerned t.b.h. Maybe after 2019 I'll be financially reasonably comfortable as I once was and save for emgergancy fund.

It has been quite testing at times as a homeowner, home emerancys do occur at times.

Dreaming of a day when I can think I'll get a few k homewoner loan and all the required work to tidy up my flat.