Emergency fund?

[Breakfastat]

Does anyone have an emergency fund? We always try our best to have savings but these always go towards something we are saving for (currently wedding!!)

We just had to pay around £300 on repairs to our bath. I would like to have an emergency fund for stuff like this.

Question is how much do you put in to your emergency fund p/m if you have one??

We make sure to have sufficient savings not to get caught out by unexpected expenses. The minimum we’ll keep in easily accessible ISAs is 6 months’ living expenses. The immediate emergency fund is 5k in a savings account linked to our joint account. Shockingly bad interest but we figured it was a good amount to keep there in case of the boiler breaking or something.

And we don’t top up the emergency fund. Basically, it’s the first 5k saved and not a penny gets spent out of there unless a real emergency.
So I’d probably saved up your usual amount per month until there’s an emergency fund and only then start saving for other stuff.

Snap for £5000! Enough to fix the boiler and buy a replacement car.

Barclaycard for us! We tend to always have a 0% purchase card on the go that we put things like this on as well as insurances that they charge a lot of interest on if you want to pay monthly. We just constantly chip away at that - about £100/month at the moment but there’s not much on it either.

Not ideal but we’d struggle to get £5k saved up in the first place.

I think you’re supposed to have 3 months expenses saved up in immediate access cash.

Thanks all - we currently pay £55 p/m for pet insurance (!!) planning to switch to a new plan in March (and will pay in a lump sum) and the £50 per month will go towards emergency fund. Thankfully we have boiler cover with British Gas!! Would be lost (and very cold) without it. Glad others use 0% credit card too - that’s our go to just now. Will repay with council tax free months March/April. Hopefully one day we can afford to have £5,000 as an emergency, this is the plan once we are married!

I'm another one for the 0% credit card.

I have never understood dedicated savings pots for different purposes. If you have a £5,000 bill, you are going to be £5,000 poorer whichever pot you take it out of.

The only decisions that affect wealth are those that impact on your income or your expenditure. The rest doesn't matter.

If at an point in time you could pay a bill without incurring expensive finance charges, I don't think you have a problem.

You should have at least enough to cover 6 months expenses in case you loose all earnings suddenly (the logic being that six months will allow you to find another job/male an insurance claim etc).

I would make it the plan before you get married. I simply wouldn't pay out for something like that until I could afford it, and affording it to me means having emergency savings.

I think saying it's your plan for after you get married shows that it's still not a high priority for you - so it could be that after the wedding you keep finding other non essentials to spend your money on!

Good work with the insurance though! Take a look at MoneySavingExpert DFW forum if you want some helpful people to make other suggestions where your spending could be reduced.

My emergency fund is 3 months of all expenses, as I think that gives breathing space to get another job / start getting benefits / start to get head round a bigger change, like poor health.

I have more than that as I've made it a priority - but I think 3 months is a good minimum.

£4k in instant access
Plus a years+ worth of expenses which would be available in a couple of days

Our emergency fund is a year's expenses because we've experienced redundancy three times and don't take our jobs for granted. Good private sector jobs but job tenure in senior management roles don't tend to be secure or lengthy! Currently, anticipating another round of redundancies in the next 6 mths (global employers so no-one is indispensable in the face of cost cutting)

You don't need to spend a lot on a wedding, however much you'd like to. IMHO having at least 6 months worth of expenses as savings is incredibly important. That should be the priority. Memories of a day won't keep actually you warm if can't afford to pay your gas bill one day

How long did it take you to save a years worth of expenses?!! That seems to me like it will take a few years or more!

As it stands, we currently have the savings to pay for our wedding now even though we don’t get married till next Autumn. And by that time we should come in to a little bit of money. So it’s looks like that will be put aside for emergency funds and we’ll start saving once again!

We are actually quite frugal and are prepared for eventualities, but we don’t have a specific “fund” so I was interested in what others do, thanks everyone for letting me know what I should be considering!

We did, it’s been used.

Just put away as much as you can, everyone has different levels of income so there really isn’t a normal amount.

Maybe open another account just for emergencies, and once the wedding is paid for try to save the same amount into the emergency fund.

Congratulations for your upcoming wedding.

Yes a grand I'm not comfortable if I don't have it A think that covers a washing machine or an awful car bill

I’d say that most people of those that have a lot in ready-available emergency funds are probably higher earners and often living off less than half of their actual income. For (financially responsible) people with more average earnings, it’s probably more common to save regularly- maybe 5,10 or 20% of income rather that 50%+. They’ll probably build up a pot but when it gets larger, they’ll probably use some of it for things like weddings, extensions, cars etc. Also, rather than carrying on building the pot for years, it might make more sense to top up the pension or pay the mortgage down.

You’ll be alright as long as you can cope if your boiler and car break and have some money to cover loss of earnings in case of redundancy or illness. If you’re a two income household, you’re unlikely to have absolutely no income for 6 months or a year but I would set aside enough to cover bills and food for a while.