To think building an emergency fund should come before spending on luxuries?

[CandidGreenRobin]

To me, the order of priorities seems fairly clear:

1. Bills, essentials, and any outstanding debt
2. Building an emergency fund
3. Then discretionary/luxury spending

I feel like you’re not really “saving” if there’s debt or no financial buffer in place. But I’ve noticed that a lot of people seem to do it the other way around - spending on non-essentials while having little to fall back on.

AIBU to think an emergency fund should come before luxuries? Maybe that’s too rigid?

I think discretionary/luxury spending is subjective. We don't have an emergency fund atm, because we've just had an extension, which drank our savings... but we do have an expensive car that we can sell if needed x

It's personal choice, we don't all have to do it the same way.

If you're comfortable with your approach that's the important thing, not what someone chooses surely

It can feel pointless if you can only save small amounts, that then get eaten up by something breaking or an energy bill increase. If you don't have much, then getting what joys you can out of life when you can, can look like the better option. There's a very very big difference between living frugally because you want to, and because you need to.

It’s to rigid. I have been in that position and been in a very tight budget with debts to pay. But you have to do something nice sometimes, otherwise what’s the point?
I didn’t have a holiday for 7 years because I couldn’t afford it. Was I supposed to wait more years while I built up an emergency fund first?
I split my funds between these things otherwise life is miserable.

Didn't we just have a thread on this about people with nice cars but no savings? I have very little savings, an old car and a shabby house but I pay for my kids to do hobbies and days out and holidays. I have excellent credit and if an emergency happens its used and put on 0% which I can nibble away at and longer term, clear. I am in a secure job and have CI insurance. Life is to live, not hunker down checking my banking app every five minutes.

It depends on how much money you've got really doesn't it?
If after paying the essentials I've got £20 left shall I save it in the 'emergency fund' or take the kids swimming or to the cinema?
I do actually want to enjoy my life, that's the thing!

Life is too short for me, we have ways and means if we need money, pretty secure jobs.

When I weigh up the risk I am much more afraid of wasting this precious time prioritising saving too much over how I want to live now.

It has to be more flexible than that. If I had stuck strictly to that then when the kids were young we wouldn’t have had days out at the seaside, a car to take them places, toys that they loved. Now that they are older we have those lovely memories and are still financially absolutely fine. It just took us a bit longer to pay things off.

It doesn’t have to be all or nothing. You can have a smaller emergency fund, and some debt, and have some fun money.

It didn't occur to me that I actually needed a ring fenced emergency fund until the past few years. Sure I've had savings most of my life that I've built up and spent as I felt I needed to at the time. But it was only in recent years that I started to educate myself about money and have built an emergency fund. Its still not fully funded, (or maybe it is - it's hard to know how much to keep in cash) but I choose to continue discretionary spending, and long term investing alongside building it up to 6 months of bare bones expenses. (should it be bare bones? Define bare bones!)

I guess what I'm saying is that financial education is lacking. Even the knowledge to go educate yourself that there might be a better way than how you've always done it is lacking. You don't know what you don't know. And we all have different definitions, risk tolerances and priorities

Yanbu. I have always chosen to be very frugal in order to build up an emergency fund. Once it's there I spend a bit more on fun/'luxuries'.

The point of having an emergency fund is to stop you getting into debt if something unexpected happens. Like OP, I think it makes sense to do that and manage my money accordingly. Others may feel comfortable about getting into debt and paying interest. Unlike the OP, I don't expect everyone to be like me.

Why are so many people concerned with other people’s finances? Thread after thread debating what people should do with their money.

You do what suits you, others will do what suits them, as long as your neighbours aren’t asking you to finance their luxuries then what impact does it have on you.

Absolutely this.

YANBU to choose those priorities for your own finances, YABU to wade in on other people’s priorities and finances.

Too rigid. You can do both at the same time. Being financially savvy and also using part of your money to create joy and live life in the here and now are both important.

I feel like the spenders are just happy spending regardless but the savers enjoy not only saving but comparing too.

And how much of an emergency fund before you are allowed to start spending on luxuries?

When I had very little to spare, I put what I could into 2 different savings accounts - one meant for long term emergencies and the other for the washing machine needing replacing kind of going to inevitably happen but not every day. Then I also had a money box I put 50ps and £2 coins in - that was my must be spent on something you don’t need fund. I also went on holiday twice a year with my children because that was a priority to me. That had a different saving pot and I filled that before any of the others.

It's sensible to try to have enough savings to cover 3-6 months of outgoings. For things like job loss or a boiler breakdown. Especially if an emergency might stop you earning - like eviction or a car breaking down if you can't rely on public transport. Compound interest can have a huge impact over time - whether that's negative from debt or positive from savings.

However we also all need an occasional treat to keep going - even if we live pay check to pay check. We all need to balance living life now v future financial protection. Although we might have different ideas about what counts as a treat and how often is reasonable.

I don't talk much about finances with friends but I don't see any problem in asking anonymously online. It's interesting to see what other people think. (Plus other people's debts might affect government policy and increase my future taxes.)

This.

Getting house and keeping took our saving and coincided with young kids - we had to balance doing things with them in their childhood and building savings and losing saving to stuff and getting into minor debt.

It's was a balance - but despite saving a small fortune ourselves for house deposit and paying for our own wedding people treated us as stupid and we should be doing nothing but saving - but some of the discretionionary spending are the best memories of our kids and us.

We did have piles of money for different things at worst for week and saving accounts for different things - some very long term saving for kids as adults for uni etc.

I’d do emergency fund before paying off debt. There’s no point getting the debt down if you’re going to have to go into more debt at the first emergency.

But not everyone has the same goals, not everyone wants to make sacrifices to pay off their debt. It’s not how I’d live, but there is an element of privilege that I can afford to be debt free and have luxuries.

I was just thinking the same

I’m sick of seeing the word “savings” as it appears to crop up in every second post on here lately