Salary need to equal safety net?

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Recently DH and I have had significant wage increases. However, our outcomes haven’t changed. Does the 6 month income savings rule apply to our new salary or our previous one? We easily have 6 months salary in savings for our previous salary, but need a
Few thousand more for our new salaries. We are risk adverse. Do we need to worry, or can we splurge.

You don't really need six months' salary, you need six months' bills. So if your outgoings have not changed, your emergency buffer amount hasn't changed either.

I would increase the amount you save in line with raised earnings if it was possible, but if you have things you want to buy then you can make that choice.

Like everything financial - it is a guideline not a law and you can make different choices.

Six months’ bills is reassuring to hear.

Thank you @

3-6 months salary is just a rough code for - money you could live on for a decent few months if you lost your job and didn’t get a new one right away.

So it’s not your actual salary figure, it’s how much your essential expenses are each month

Even if all you have is six months of essential expenses it's a lot more than the majority and also only a guideline and part of a wider picture considering stability of income, sick leave and redundancy entitlement, insurance provision etc.

I've heard a recommendation to treat pay rises using a rule of thirds, a third on debt/mortgage overpayment, a third to spend on non essentials and a third to save for the future, which sounds good to me.

Thanks, both. The ‘rule of thirds’ is useful. I need to start learning more about finance and investment. Are there any good podcasts I could listen to?

On another thread someone recommended 'Meaningful Money' which I found quite interesting.

Yes, the Meaningful Money podcasts are good. He also does youtube videos on certain topics if they're easier to find than wading through dozens of podcasts. But they're good to pick things up over time.

The flowchart linked below is good for working through what you should be thinking about, in what order.

ukpersonal.finance/flowchart/

As always, Moneysaving Expert is good for consumer rights, making the most of your money, cutting bills, budgeting etc. Not investing, but useful to free up more money to invest by not overspending on basic bills or random shit.

It’s bit of a strange question to ask really!
You need to shift away from thinking there’s somebody else’s rule for you to follow, and shift towards understanding the risk in your own circumstances and your own outgoings.

So for me personally, I don’t need savings to cover serious illness - because I have insurance.

I also don’t worry too much about covering a surprise redundancy, because I know what my work terms are.

If it’s a less serious illness? Good sick pay at work.

If I’m sacked (my conduct, no redundancy) I know how much money I need to pay all my essential bills until I can sell and downsize my house (worst case scenario).

I’d recommend forgetting what you earn altogether. Then, start working out all your worst case scenarios and how much money you’d need to weather those.

It’s not just about my salary now… for example, I can access my pension savings in 5 years. So my complete shit hits the fan scenario - I only need to cover 5 years. That’s not related to my salary at all!