What is a sensible emergency fund before stating DMP? 21 February 2022 at 11:11AM in Debt-free wannabe 7 replies 185 views

Newmum92

Hi,

I’m thinking about stopping my payments for a few months to build my fund before committing to my DMP- after reading the advice on here. 

What is a good amount to build up? I would like an amount that could easily cover emergencies, or if I was out of work for a few weeks, or even if a creditor was to become tricky and I need to try and sort a large payment to them. 

Thanks! 

Newmum92

Newmum92 said:

Hi,

I’m thinking about stopping my payments for a few months to build my fund before committing to my DMP- after reading the advice on here. 

What is a good amount to build up? I would like an amount that could easily cover emergencies, or if I was out of work for a few weeks, or even if a creditor was to become tricky and I need to try and sort a large payment to them. 

Thanks! 

If anyone is happy to share there own experiences of what emergency fund they ended up needing while on a DMP that would be great! 

Kakiste

I needed to buy a new washing machine, car repairs and pay for a substantial amount of dental work during my DMP (still ongoing but with only a small time left to run) 

I managed to save almost a rolling one- where I kept getting it up to about £500 and then something else would break. 

I would suggest that £1000 is an ideal amount- you can add to it but £1k will cover most emergencies in full. 

sourcrates

I would say £1000 min, and also budget a monthly amount to keep topping that up.

Newmum92

sourcrates said:

I would say £1000 min, and also budget a monthly amount to keep topping that up.

Thank you- yeah good idea. So I’ll use 3-4 months to build up £1000 and then on my SOA I think I will try and allow £150-200 a month savings and just increase my expense allowances as well as atm I’ve been quite strict with food shopping etc which usually is a down fall when I need to buy more food or do unexpected chemist runs for my baby. That way if I don’t spend all I have budgeted for it can always be extra in my fund 

Newmum92

Kakiste said:

I needed to buy a new washing machine, car repairs and pay for a substantial amount of dental work during my DMP (still ongoing but with only a small time left to run) 

I managed to save almost a rolling one- where I kept getting it up to about £500 and then something else would break. 

I would suggest that £1000 is an ideal amount- you can add to it but £1k will cover most emergencies in full. 

That’s helpful thank you, I guess more then one emergency can happen at once too so better to over estimate! 

I just saw that you’ve paid of over £40k that is seriously impressive! How long have you been in a DMP for do you mind me asking? 😊

EssexHebridean

Absolute minimums IMO. 

If you're renting (and you're confident of a secure tenancy), furnished, no car - £250
If you're renting, (and you're confident of a secure tenancy) unfurnished, no car - £500
If you are paying mortgage, and no car, OR renting AND own a car - £1000
Paying mortgage AND own a car - £1500

Ideally I'd double each of those, and of course the "perfect world" situation is to have a minimum of three months expenses safely tucked away, but that might be a little way down the line yet! 

I agree with Sourcrates suggestion that you also budget a sum ongoing to continue adding to whatever your starting amount is.

enthusiasticsaver

I would suggest aiming for £1000 but continuing to add after that.