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Living expenses - how much in "cash in the bank"?
Aminatidi
Posts: 651 Forumite
Appreciate there isn't a single good or bad or right or wrong answer to this.
For those of you that have investments in stocks and shares (I guess some of you will have other asset classes but those are my focus), what's your cash buffer?
How many months or years worth of living expenses and contingency do you keep as "cash in the bank"?
For those of you that have investments in stocks and shares (I guess some of you will have other asset classes but those are my focus), what's your cash buffer?
How many months or years worth of living expenses and contingency do you keep as "cash in the bank"?
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Comments
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Most would recommend between 3 and 6 months' living expenses.
I'm normally towards the top end of that personally.0 -
Is this before or after retirement?0
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Depends - if you are working then 6 months salary
Retired - pension income is guaranteed - £1000 plus to allow for house / car unseen bills.Never pay on an estimated bill. Always read and understand your bill0 -
Presumably you don't mean a "cash emeregency fund", but rather a cash amount used to provide a buffer should there be a downturn in equities....
In this case the normal principle is to keep two or three years' worth of normal drawdown. Historically, and on average, recessions have taken 2 years to recover.If you want to be rich, live like you're poor; if you want to be poor, live like you're rich.0 -
Sorry yes, still working in permanent employment so as stable an income as anyone can have in this day and age.0
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Sorry yes, still working in permanent employment so as stable an income as anyone can have in this day and age.
In that case then 3, 6 or even 12 months expenses, or maybe even take home salary. I have 6 months expenses stashed.If you want to be rich, live like you're poor; if you want to be poor, live like you're rich.0 -
I keep £10k.
That is around 3 months salary, and around 6 months expenses (as I invest just over half my net pay).0 -
And how far invested are you i.e. if you keep £10K in the bank do you have £10K invested or £300K etc.
Appreciate people may not want to get into specific figures but percentages or anything would be enlightening
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I invest anything that isn't:
1. My emergency fund
2. Short term cash I will need within a period I deem suitable, for example I will need to buy a car in a few months
3. Cash in my SIPP because I intend to retire in about 4 year's time and I don't want to risk slipping that retirement date, I will use the cash in there as a bridge to DB pension
4. I also may want to buy extra pension so I'm divided really about whether to cash in some investments for that or save more cash.
So this is really dependent on individual situations.If you want to be rich, live like you're poor; if you want to be poor, live like you're rich.0 -
We have 6 months expenses in cash.0
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