The "Save 12k in 2018" Thread!

tara747 wrote: »

Thank you! And congrats to you too - I see you've managed to become debt-free AND save £6k :beer: Focus on that. That's amazing. You have achieved a lot!

Everyone here is doing well, whether we're saving £5 a month or £5k. Just keep going, you'll get there

Thank you so much for this lovely response. So true, whatever amount is being saved is a fab achievement.

I have spent my lunch today researching ways to supplement my income whilst at home. Going to try and prioritise that coming up to the new year! Maybe I could join a thread like this next year to try and increase my savings... I can't face waiting another 5 years to double my deposit.

I was thinking as well, what do people thing of saving for only one thing? At the moment I am saving for a house deposit but have no emergency fund as I simply cannot afford to save for both. Do people think this strategy is detrimental?

Thanks!

At the moment I am saving for a house deposit but have no emergency fund as I simply cannot afford to save for both. Do people think this strategy is detrimental?

It depends. The point of an emergency fund is to avoid being in a situation where you get an unexpected expense that you just can't pay, so you borrow the money (e.g. on a credit card), then can't pay that either. That's the start of a downward spiral.

Generally the less free cash you have each month, the more urgent the emergency fund is - someone with plenty of free cash arguably doesn't need an emergency fund at all, as there are few expenses that they couldn't put on a credit card and then repay in full the next month (or within a few months, with minimal interest), whereas someone who has to count the pennies to get through every month could be sunk by an unexpected bill of a few hundred pounds, or less.

As long as your house deposit could double as an emergency fund if it had to (i.e. it's not all locked away in long-term, no-access accounts, and you could get at some of it if the need arose) then you're probably ok. It would be frustrating to have to dig in to those hard-earned savings - none of us want to touch our emergency funds really - it's much better than the alternative.

Merlin's_Beard wrote: »

I would say, what happens when you move into your new house, having spent all your money on buying it, and the boiler breaks? And it's January? Or a window breaks, or the roof leaks, or...

I don't think you can have a house without an emergency fund. As much as it sets you back now, it will set you back more and send you into debt later if you don't!

Lomcevak wrote: »

It depends. The point of an emergency fund is to avoid being in a situation where you get an unexpected expense that you just can't pay, so you borrow the money (e.g. on a credit card), then can't pay that either. That's the start of a downward spiral.

Generally the less free cash you have each month, the more urgent the emergency fund is - someone with plenty of free cash arguably doesn't need an emergency fund at all, as there are few expenses that they couldn't put on a credit card and then repay in full the next month (or within a few months, with minimal interest), whereas someone who has to count the pennies to get through every month could be sunk by an unexpected bill of a few hundred pounds, or less.

As long as your house deposit could double as an emergency fund if it had to (i.e. it's not all locked away in long-term, no-access accounts, and you could get at some of it if the need arose) then you're probably ok. It would be frustrating to have to dig in to those hard-earned savings - none of us want to touch our emergency funds really - it's much better than the alternative.

Suffolk_lass wrote: »

I use my Tilly-Tidies for my emergency fund while scheduling a regular savings amount that goes into actual savings in the ISA and/or over-paying the mortgage. When my emergency fund got to £10k, I let it top up so that I am budgeting ahead for one or two big bills I get in March and December, and then that money is ready and waiting, when the bills come in.

The EF may also be deployed when a car or household appliance fails, or (as this month) I forget something (heating oil delivery today).

Thank you so much for all your kind responses - as a result you can see I have added a EF to my signature! Not a brilliant start but it is something:rotfl:!

I do set aside money for use in a 'emergency' each month which is why I have that £15 already - this issue is I have to dip into it every month to cover additional costs like overspending on groceries, going out, unexpected costs etc.

I am debt free but I am always living pay check to pay check with the risk of putting unexpected expenses on my credit card. For example, I have just found out I need to buy tickets to my upcoming graduation next week which adds up to £100.. which I don't have. So it looks like I will be debt free no more. I guess that is the use of an emergency fund!

Thanks again for all your support, sorry to hijack the thread with my non-saving ways!

tara747 wrote: »

I see you've replied already, but I just thought I'd chip in anyway! Dave Ramsey says that you should have an EF before anything else. And keep it topped up. If you dip into it, you should replace the money you 'borrowed'.

Well done on starting your EF :T

If you haven't heard of DR, check him out. Here's a link to get you started. Happy reading

https://www.daveramsey.com/baby-steps

Thank you - I've heard of his name in passing when listening to some finance podcasts but never looked into him more! I will check this out today. Yes, stop dipping into emergency fund will be my new goal for next year - not having enough money to eat out is NOT an emergency!! :rotfl: