How much do you keep in readily access savings/cash access?

subjecttocontract

Perhaps I misunderstood the question ?
I use Santander because I get a cheque book, a debit card and can walk in almost any establishment and pay instantly on an everyday basis. 

I'm sure we have all got money in other accounts we have to jump thru a few hoops to get our hands on our money.......but that's not how I understood the question.

RG2015

subjecttocontract said:

Perhaps I misunderstood the question ?
I use Santander because I get a cheque book, a debit card and can walk in almost any establishment and pay instantly on an everyday basis. 

Okay, but I think the OP was really talking about largish cash amounts in case of an emergency, not everyday spending.

subjecttocontract

Why would anyone keep large amounts of cash unless they need it to pay for something imminently ? My £15K is safe in a bank, easily accessible immediately and can be spent right now, anywhere.....surely that covers emergencies in my situation.

masonic

I suppose there was acknowledgement to being "a reasonably big spender", but £15k for everyday spending had me double checking the inflation rate wasn't monthly rather than annually.

subjecttocontract

We need to acknowledge that we are all different. When I was younger I'd have considered myself in good shape if I had an emergency fund of 1-2k. Others in my circle keep a £30k balance in their current account.....but they can incur big bills on property, cars, travel etc and £30k is a mere drop in their ocean.

RG2015

subjecttocontract said:

Why would anyone keep large amounts of cash unless they need it to pay for something imminently ? My £15K is safe in a bank, easily accessible immediately and can be spent right now, anywhere.....surely that covers emergencies in my situation.

You misunderstand. By cash, I mean cash in a bank account as compared with long term investments.

masonic

subjecttocontract said:

We need to acknowledge that we are all different. When I was younger I'd have considered myself in good shape if I had an emergency fund of 1-2k. Others in my circle keep a £30k balance in their current account.....but they can incur big bills on property, cars, travel etc and £30k is a mere drop in their ocean.

Yes, but we should try not to confuse different purposes. If £15k is what you might reasonably turn over in your monthly spending, then typically you would want more in emergency savings. As a rough rule of thumb, this would be 3-6 months expenditure, although what qualifies as monthly expenditure can be flexed when you are a reasonably big spender - what is necessary monthly spending is a matter entirely for you, but it could be considerably less than £15k. In any case, some savings above that £15k would probably be needed if you wanted to avoid being a forced seller of other assets like shares or property should your usual income stream dry up for a few months. One typically wants to earn the best rate available on money that is being saved for emergencies and is not part of one's everyday spending.

MovingForwards

Currently got instant access to over £6.5k which would cover over 8.5 months of basic outgoings eg mortgage, utilities, food and a bit of petrol each month. 

On top of that I've some money for annual bills, but they've all been paid for this year and I'm building those back up.

subjecttocontract

masonic said:

subjecttocontract said:

We need to acknowledge that we are all different. When I was younger I'd have considered myself in good shape if I had an emergency fund of 1-2k. Others in my circle keep a £30k balance in their current account.....but they can incur big bills on property, cars, travel etc and £30k is a mere drop in their ocean.

Yes, but we should try not to confuse different purposes. If £15k is what you might reasonably turn over in your monthly spending, then typically you would want more in emergency savings. As a rough rule of thumb, this would be 3-6 months expenditure, although what qualifies as monthly expenditure can be flexed when you are a reasonably big spender - what is necessary monthly spending is a matter entirely for you, but it could be considerably less than £15k. In any case, some savings above that £15k would probably be needed if you wanted to avoid being a forced seller of other assets like shares or property should your usual income stream dry up for a few months. One typically wants to earn the best rate available on money that is being saved for emergencies and is not part of one's everyday spending.

But that's your interpretation of the op's question.There is no indication in that question that we are to consider separately monthly spending & emergency funds. There is no confusion on my part as I chose not separate the two. My £15K in Santander meets all of my immediate needs on an instantly available cash basis. Of course I have other accounts which could be accessed but most of those funds are not held for any reason other than the returns that they offer.

The definition of an emergency differs widely depending on circumstances...one may be that they need immediate access to funds. Another's emergency means they can wait a week for the money. 

RG2015

subjecttocontract said:

I have guaranteed income, no mortgages on my properties, no other loans and managable monthly outgoings but I am a reasonably big spender so I keep around £15K in my Santander account at 0.75%.

I look at most things through a financial prism.

Easy access account rates are currently at 1.70% to 1.90% and you are getting 0.75% on 15k.

Therefore the difference of about 1% comes at a cost of £150 pa or £12.50 per month.

Most on this savings and investment board would think it rather excessive to pay £12.50 per month for the convenience of having this amount "on tap".

Others would not flinch at this.

Edit. I believe that Santander are upping their rate from 0.75% to 1.00% so my figures will come down to about £9 or £10 per month. The principle though remains the same.

In fact, a day or two back someone on this site quoted to me that "every pound should be held prisoner".