Emergency fund - real world examples

subjecttocontract

We let property, we have quite a few, we owe around half a million in mortgages and have completely separate accounts to our normal day to day home life. We do carry a cash float of a few thousand for emergencies.....e.g. heating or hot water failure etc. 

In our personal life we don't have a mortgage, or any other loans, we don't have 'jobs' to lose as we work for ourselves and we live quite comfortably off income, investments and pensions. So, we don't have an emergency fund. Any problem that could be described as an emergency we can afford to pay for.

When I was much younger with a large mortgage, 3 young kids and one income I always struggled to pay the bills and had very little opportunity to build any funds, let alone one for emergencies.  Our situations are all very different.

enthusiasticsaver

We have approx £17k  in our YBS Internet saver and about £2700 in a regular saver.  We tend to keep  £1500 in our current account after direct debits paid to cover monthly expenses and push the remainder into savings at the end of the month . The rest of our money is invested. Some of that money is to pay for holidays or car repairs/home improvements etc so not all for emergencies.  They are both earning about 5% at the moment. In the past I have moved  money from account to account to get better interest but we like things simpler now. 

Macsidia

5K Barclays rainy day saver with around a few hundred to a monkey in the current account as float.

Some money going into high rate instant access with the excess heading for future Cash/S&S ISAs and S&S Lifetime ISA. Also Premium Bonds.

Silverbullet036

Like many others I'm not sure what would constitute an emergency really. I have money in Easy Access accounts with many different banks that I can get too as well as a reasonable amount of cash in the safe. A zombie apocalypse would be a problem but we wouldnt need money then

TheWoodler

Jobs in my specific field are hard to come by, and after being unemployed for a soul-destroying 18 months between uni and my career, I swore I’d never be that desperate again. With an eye to that, I:

1. run two current accounts, one into which my salary is paid, and the other for day-to-day expenses, feeding from one to the other as appropriate; one with a Visa card and the other with an associated MasterCard debit;

and

2. keep the equivalent of an annual salary across various high-paying easy access accounts, so that if eg one bank’s system goes down, I can go to another.  That’s the sum and approach that allows me to sleep at night (I don’t think there’s ‘too much’ in my EA - most people say you should have a 6-month buffer, but 12 works for me.)

For the same reason, I ladder my savings portfolio so there’s a regular turnover of bonds and regular savers. The current NS&I issues of Green Bonds at £100 min and Guaranteed Growth or Income Bonds at £500 min are ideal for this purpose.

You don’t need to commit to a large deposit to benefit - they’re a lower threshold than many bonds. Having bought one, while they’re still on sale, you can always buy another when you have the funds - in other words, you can still take advantage of a leading rate while it’s still leading, but you wouldn’t over-commit at any one time either, and it helps towards the turnover of fixed savings more than multiple deposits into a single bond would do (and thus potential fund release on maturity if needed). 

surreysaver

I don't have a specific emergency fund. My savings are my savings. I keep them where they earn the most. Some of it is instant access if I need it

thegentleway

I like keeping a cash buffer but not strict with keeping an emergency fund in separate account(s). Just try to get best interest rates with savings and have a spreadsheet to allocate what savings are earmarked for. Holding a lot of cash at the moment for house extension and to overpay mortgage when fixed rate expires in Aug 27 - this is in PBs, Virgin 3 year fix ISA and Principality ISA (which is flexible so technically emergencies are already covered). Rest of savings are in Barclays Rainy Day and Tandem. Also have some in Marcus for joint savings. Not the best rate but going to blow through it pretty quick with wife on maternity leave earning statutory pay so not much point messaging around with new joint savings account for 0.7%.

I think for the average person, an emergency fund is a great concept. Most people don't have any substantial savings and the name encourages them to only use it for "emergencies". Holding this money in your current account is bad practise for average person as it makes them feel flush and overspend.

Linton

Silverbullet036 said:

Like many others I'm not sure what would constitute an emergency really. I have money in Easy Access accounts with many different banks that I can get too as well as a reasonable amount of cash in the safe. A zombie apocalypse would be a problem but we wouldnt need money then

The main emergency for people still working is losing their job at short notice.  Having a significant emergency fund gives you time to find something you want to do.  It also removes worries about paying the mortgage etc.

Martico

I also combine emergency and sinking fund, spread across Barclays Blue (5000 at 5.12%), Chase instant access (7000 or so at 4.1%) and premium bonds (8000 currently). And have three current accounts for monthly spends and DDs. Funds are destined to cover January tax bill and saving up for new windows and re-rendering the house. Once the sinking / emergency covers those plus 3 months expenditure, I'll go ahead with the renovations. 

Barkin

Emergency fund?  I just have 'funds'...