Current Account cushion

[Joany1983]

Im just wondering how much you should have in your current account as a cushion for unexpected bills or car repairs etc, only asking as i havent got anything at the moment, hopefully trying to save a bit each month now to allow for this, just repaid all my debt and now i can finally start saving a bit. thanks for your replies

3 months expenses is a target on a lot of financial websites as an emergency type fund. Yes it's a hell of an ask but it's just a target, lots won't be able to achieve that without a lot of saving or time

It really does depend on your situation, but in terms of unexpected expenses I try to have 1 to 2 thousand just in case (in case the washing machine breaks or I don’t know what).

I really, really recommend YNAB (You Need A Budget) for planning ahead for expenses. You can easily see how many months ahead you have saved. Do check it out, it’s brilliant and the company staff are amazing and helpful.

https://www.ynab.com/

I don’t work for them 😂

I’ve recommended it to two friends. One couldn’t get on with it, the other one found it as life-changing as I have.

I've always seen 3-6 months expenses to be kept aside if possible. We have 3 months and keep it separate from our current accounts and have it in easy access savings.

If I was you I would redirect the amount you used to pay in debt repayments into a separate account. Then, once you have 6months of basic bills saved, just set up a new amount which gives you a bit more spare cash each month but still saves a bit.

£500. No way can I afford £3800 x 3

A lot depends on your circumstances. If you have a car, what emergency pot do you need - figure out what new tyres cost you, how much a bad repair might be (£500?) and aim to put that by.

Do you rent or own? If you own you need more because houses have stuff that goes wrong. If you rent, the LL should be fixing most things. But might you need to buy a new washing machine urgently, say?

Saving up 3-6 months salary is a great longer term goal (in case you lose your job and can’t get another one), but first start smaller. Set yourself a target you can achieve.

And I also don’t work for YNAB but I completely agree it’s great.

I don't keep my cushion in my current account. I have about £5k in an instant access savings account that I can transfer over immediately. Out of sight, out of mind. I also have long term savings are in another account but they could be accessed if the sky fell in.

Well done on paying off your debt! I would keep transferring the same amount to an easy access savings account like Chip 4.21% every month as you are already used to spending that amount. I would try to build up a buffer of around 4 month's expenses and then once that goal had been reached, I would continue to save by investing the rest in an ISA.

I would initially aim for an emergency fund of £1000. Then pay off debt and then increase the emergency fund to 3-6 months of expenses.

You may find the UK Personal Finance flowchart useful to go through:
https://ukpersonal.finance/flowchart/

Podcast about having an emergency fund:

I keep roughly 1k buffer in my current account on top of what I'd spend on my usual bills etc. I have a lot more in savings that I could access if needed.

Nothing. I live paycheck to paycheck and have done so for about 20 years.