Emergency Savings

slinxy

slinxy

slinxy

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Joined
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Hi all...

Something that I've been thinking about for a while... due to my circumstances of being a single bloke, I feel that I have to keep more savings in easy access accounts than most but at the same time feeling that I'm losing out on the investment opportunity.

If I stop working have to cover;
  • my mortage without the over payments
  • my car is on it's last legs and I keep patching it up so I have funds to buy a replacement when needed.
  • I have two long term store loans that is interest free but again I have the funds to clear the accounts if needed.
  • an interest free credit card that I use for large purchases to spread the cost.
  • and then my monthly bills such as council tax, food, electric etc...

My fixed outgoings (minus mortage over payments) is around £1250 pcm, adding on £750 pcm for variable outgoings, so I would guess I need £2000 a month to survive until I get back to work.

I also have a 50% income protection from a scheme at work but that only kicks in under certain conditions.

Work wise; due to my location, I'm fairy certain that I could find a replacement "job" quite soon, but I would most likely want to take some time off. The "job" is not likely going to be in my specialist field so the salary would not come close and it will take me a while to find another position in the same field and it's unlikely to have the same sort of salary.

How many months of emergency savings plus the cost of a replacement car, debt repayment would you feel safe with in the bank? or would you not consider having the car funds and debt replayment funds in easy access accounts?

Thanks
 
slinxy said:
Hi all...

Something that I've been thinking about for a while... due to my circumstances of being a single bloke, I feel that I have to keep more savings in easy access accounts than most but at the same time feeling that I'm losing out on the investment opportunity.

If I stop working have to cover;
  • my mortage without the over payments
  • my car is on it's last legs and I keep patching it up so I have funds to buy a replacement when needed.
  • I have two long term store loans that is interest free but again I have the funds to clear the accounts if needed.
  • an interest free credit card that I use for large purchases to spread the cost.
  • and then my monthly bills such as council tax, food, electric etc...

My fixed outgoings (minus mortage over payments) is around £1250 pcm, adding on £750 pcm for variable outgoings, so I would guess I need £2000 a month to survive until I get back to work.

I also have a 50% income protection from a scheme at work but that only kicks in under certain conditions.

Work wise; due to my location, I'm fairy certain that I could find a replacement "job" quite soon, but I would most likely want to take some time off. The "job" is not likely going to be in my specialist field so the salary would not come close and it will take me a while to find another position in the same field and it's unlikely to have the same sort of salary.

How many months of emergency savings plus the cost of a replacement car, debt repayment would you feel safe with in the bank? or would you not consider having the car funds and debt replayment funds in easy access accounts?

Thanks
Click to expand...

I know that if the worst came to the worst I could survive 3 years without a job scraping by.

That's enough for me to start spending.
By that I mean I don't need rhi save aggressively.

By this I mean living basics. Paying the bills etc.

The only debt here is my mortgage. No car finance or Credit card debt.
I do have credit card debt but that would be paid off in addition to the 3 years.
 
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TBH the duration for me i completely dependant on how likely it is to happen.

I've been in my current job for almost 10 years now, so I'd get a decent redundancy package if they decided to get rid of me, so this negates the need for me to keep cash in the bank quite the same.
My work also provides 100% sick pay for any duration & has an income protection insurance if I end up having an illness that would prevent me ever being able to go back to work.

Due to the above, I don't see the need to keep masses in reserve, but without those, it would be quite different. I still try to keep 2-3 months of required expenses to hand though (currently in premium bonds)
 
R.C.Anderson said:
TBH the duration for me i completely dependant on how likely it is to happen.

I've been in my current job for almost 10 years now, so I'd get a decent redundancy package if they decided to get rid of me, so this negates the need for me to keep cash in the bank quite the same.
My work also provides 100% sick pay for any duration & has an income protection insurance if I end up having an illness that would prevent me ever being able to go back to work.

Due to the above, I don't see the need to keep masses in reserve, but without those, it would be quite different. I still try to keep 2-3 months of required expenses to hand though (currently in premium bonds)
Click to expand...
Amazing!
 
10k is my safe space. Which I would expect to last 6 months without to much cutting back but honestly as long as you have something rather than nothing your already ahead of 40% of the population.

People do tend to live within their means for better or worse.
 
The rule of thumb is 3-6 months that you can access easily, to cover all bills, mortgage/rent and food and fuel. Perhaps + 10% contingency on top.

3 months would be quite tight I would think, that require you to find a job in about a month or so in order for earnings to arrive at the end of that month, with worst case scenario being 30 days away from date of start of work. I would lean towards 6 months expenses in the highest easy access savings account you can get.
 
413x said:
I have a very low limit of sick pay. That's the one I find hardest at mine.
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Yea, I think looking at what a company offers for sick pay goes a long way to determine what they'll be like as an employer. If you're not well enough to go to work, you shouldn't have to be deciding between having to go to work, because you can't afford not to, or struggling to feed the family that month because you need to stay home sick.

For my company, you need to be there 3 years to get the full 100%, but it starts at 50% for your first year of employment & goes up a bit each year which makes sense to prevent too much abuse.
 
R.C.Anderson said:
Yea, I think looking at what a company offers for sick pay goes a long way to determine what they'll be like as an employer. If you're not well enough to go to work, you shouldn't have to be deciding between having to go to work, because you can't afford not to, or struggling to feed the family that month because you need to stay home sick.

For my company, you need to be there 3 years to get the full 100%, but it starts at 50% for your first year of employment & goes up a bit each year which makes sense to prevent too much abuse.
Click to expand...

Mines a few days a year
 
R.C.Anderson said:
TBH the duration for me i completely dependant on how likely it is to happen.

I've been in my current job for almost 10 years now, so I'd get a decent redundancy package if they decided to get rid of me, so this negates the need for me to keep cash in the bank quite the same.
My work also provides 100% sick pay for any duration & has an income protection insurance if I end up having an illness that would prevent me ever being able to go back to work.

Due to the above, I don't see the need to keep masses in reserve, but without those, it would be quite different. I still try to keep 2-3 months of required expenses to hand though (currently in premium bonds)
Click to expand...

Thanks... you have brought up some interesting points that I didn't think of...

My work also gives me 100% sick pay, the income protection is there in case I go over the sick pay period or can not return to work.
also the redundancy package is ridiculous at my place, with a 6 months gardening leave plus the redundancy notice period at full pay and the actual redundancy pay itself which would cover me for the time I would want off work and then some.

a concern still is the funds for the replacement car... I don't want to place it into shares then have to liquate a few weeks later when my trigger's broom finally dies...
 
slinxy said:
Thanks... you have brought up some interesting points that I didn't think of...

My work also gives me 100% sick pay, the income protection is there in case I go over the sick pay period or can not return to work.
also the redundancy package is ridiculous at my place, with a 6 months gardening leave plus the redundancy notice period at full pay and the actual redundancy pay itself which would cover me for the time I would want off work and then some.

a concern still is the funds for the replacement car... I don't want to place it into shares then have to liquate a few weeks later when my trigger's broom finally dies...
Click to expand...

Yeah I have none of that.

If I'm sick for me than a few days it's SSP for me.

So makes sense you guys don't need such a big buffer of savings
 
slinxy said:
Thanks... you have brought up some interesting points that I didn't think of...

My work also gives me 100% sick pay, the income protection is there in case I go over the sick pay period or can not return to work.
also the redundancy package is ridiculous at my place, with a 6 months gardening leave plus the redundancy notice period at full pay and the actual redundancy pay itself which would cover me for the time I would want off work and then some.

a concern still is the funds for the replacement car... I don't want to place it into shares then have to liquate a few weeks later when my trigger's broom finally dies...
Click to expand...

Yea, I think it's never as simple as "X months", as it's all down to risk & likelyhood. A car you might need to replace is a higher risk, so needs to be taken into account. For me, I've had a new car (max ~3 years old) on PCP for about 10 years now, so although I pay out monthly for it, I know I've got a working car at all times & if it breaks for any reason, it's covered by warranty & I'll get a courtesy car whilst it's being fixed.
 
I have non of that also. If I'm off sick I get nothing/SSP.

Currently I have enough savings to last me roughly 2 years if needed (outgoings around £800 a month)However I do plan to pay of the rest of my mortgage in about 2 or 3 years, so the money is already reserved haha
 
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I'm a contractor so don't get anything if I don't work, so have put a lot of effort in building a large war chest. Got to the point now as I've been contracting for a long time now, I'm mortgage / debt free so can now last for years out of work. Just ploughing money away for retirement
 
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I've been living off savings for two years now, and plan to go at least another three before I push the button on my SIPP (will be 62 then) but can go longer if I want too, or the market tanks just then.
Putting money away is hard for a lot of people, but it gives you options, and that's invaluable.
 
I like to have 12 months personally as someone who lives on their own. When me and my ex separated I had enough money to instantly put down a deposit on a house, and still have over 6 months of emergency savings which I've then built up to 12 months since moving. Now I'm comfortable savings wise I'm putting money into the house.
 
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