Emergency fund - real world examples

london21

Move your money to better interest paying accounts.

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

InvesterJones

For me, emergency/cash/short term funds are those I can access for immediate payments of things like boiler/car etc. repair. Even if credit is used, another asset would need to be liquidated to clear that credit in a month or so, so I set aside enough for that outside of my normal investments, which are more volatile and may be unwise to sell in the short term

Barkin

surreysaver said:

Barkin said:

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

An emergency fund is a bit of a misnomer. People should just have enough liquidity to cope with sixth months of expenditure with no income 

Apologies, I was on my phone, and being economical with my typing...

An 'emergency fund' for somebody with a young family, large mortgage etc will be very different to mine:
I retired early, own my house outright and have no financial dependants. I live very comfortably on a DB pension, which more than covers my regular expenses and various' luxuries' - 4 holidays a year if we want to, hobbies, socialising/eating out as and when we feel like it. etc etc
I also have an untouched DC pension, a S&S ISA & GIA, along with various other savings in ISA's, fixed term accounts etc.

I see mentions here of people with 100K in EA accounts. Each to their own and all that, but that'd be just bonkers for me. My EA stash is somewhere around 10K max. 
As for the oft mentioned car repairs/replacement... I drive a 20 year old Saab, and do approx 4K miles/year. If it expired tomorrow I'd be gutted at first, then go and spend a grand on something similar.

A bit of context is needed, I feel, in order for these things to be meaningful. 

Bostonerimus1

Barkin said:

surreysaver said:

Barkin said:

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

An emergency fund is a bit of a misnomer. People should just have enough liquidity to cope with sixth months of expenditure with no income 

Apologies, I was on my phone, and being economical with my typing...

An 'emergency fund' for somebody with a young family, large mortgage etc will be very different to mine:
I retired early, own my house outright and have no financial dependants. I live very comfortably on a DB pension, which more than covers my regular expenses and various' luxuries' - 4 holidays a year if we want to, hobbies, socialising/eating out as and when we feel like it. etc etc
I also have an untouched DC pension, a S&S ISA & GIA, along with various other savings in ISA's, fixed term accounts etc.

I see mentions here of people with 100K in EA accounts. Each to their own and all that, but that'd be just bonkers for me. My EA stash is somewhere around 10K max. 
As for the oft mentioned car repairs/replacement... I drive a 20 year old Saab, and do approx 4K miles/year. If it expired tomorrow I'd be gutted at first, then go and spend a grand on something similar.

A bit of context is needed, I feel, in order for these things to be meaningful. 

If you are retired with a DB pension then the amount of cash you keep on hand will probably be less than someone in DC drawdown as the latter could easily keep one or two year's of cash or cash equivalents as part of their withdrawal and asset allocation strategy. So it could easily be 50k or even 100k. Their emergency account would be used to avoid selling at a loss when the markets are down 20% or more for an extended period, as well as for boiler breakdowns. A retired person with guaranteed DB income might also have less cash than someone who's working, but keeping 6 months to a year's spending in cash to help them survive unexpected unemployment.

Many asset allocation rules of thumb say that you should keep 5% or 10% in cash, but that obviously can be adjusted if you have reliable income from something like an annuity or a DB pension or your net worth is high. There is also something to be said for the convenience of having cash if you can afford it, and now you can earn 5% on that cash and still keep it pretty liquid.

Barkin

Bostonerimus1 said:

Barkin said:

surreysaver said:

Barkin said:

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

An emergency fund is a bit of a misnomer. People should just have enough liquidity to cope with sixth months of expenditure with no income 

Apologies, I was on my phone, and being economical with my typing...

An 'emergency fund' for somebody with a young family, large mortgage etc will be very different to mine:
I retired early, own my house outright and have no financial dependants. I live very comfortably on a DB pension, which more than covers my regular expenses and various' luxuries' - 4 holidays a year if we want to, hobbies, socialising/eating out as and when we feel like it. etc etc
I also have an untouched DC pension, a S&S ISA & GIA, along with various other savings in ISA's, fixed term accounts etc.

I see mentions here of people with 100K in EA accounts. Each to their own and all that, but that'd be just bonkers for me. My EA stash is somewhere around 10K max. 
As for the oft mentioned car repairs/replacement... I drive a 20 year old Saab, and do approx 4K miles/year. If it expired tomorrow I'd be gutted at first, then go and spend a grand on something similar.

A bit of context is needed, I feel, in order for these things to be meaningful. 

A retired person with guaranteed DB income might also have less cash than someone who's working, but keeping 6 months to a year's spending in cash to help them survive unexpected unemployment.

Which was kinda my point. 

It's all very well saying that "I keep ??K in a current account as my 'emergency fund' and the rest is <elsewhere>", but without stating circumstances and the reason for a particular spread of assets, it's all pretty pointless.

IMO, YMMV etc...