Discussion
I realise this is a very broad question, but what would people say is a decent amont to have saved up for emergencies etc?
I'm thinking five/six months of bills as a minimum at the moment.
I've got a loan at 3.2% for another three and a half years. Part of me thinks pay that off ASAP, part of me thinks let it run as the interest is only £700 over the whole four year term. What are people's views on that? I can't really afford to save and pay off the loan at the same time and would rather having savings for house/car repairs etc.
Thanks
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I'm thinking five/six months of bills as a minimum at the moment.
I've got a loan at 3.2% for another three and a half years. Part of me thinks pay that off ASAP, part of me thinks let it run as the interest is only £700 over the whole four year term. What are people's views on that? I can't really afford to save and pay off the loan at the same time and would rather having savings for house/car repairs etc.
Thanks
. I think about this a LOT, probably more than is healthy 
I sold my flat about a year and a half ago and decided to sort my finances out so as not to squander the money. Also having been through redundancy a few years back, voluntary granted, but having no real prospect of a decent redundancy payment in my new work, I wanted to put some away for my peace of mind.
I maxed my ISA for that year, leaving the remainder in current accounts and my 1-2-3 account.
Recently I’ve been thinking approximately 24 months living expenses in cash is beyond necessary so pushing more towards my ISA. I’m thinking 12 months is a more sensible amount. Probably still a touch excessive, but given nobody really knows how Brexit transition is going to play out, better to be safe than sorry.
Edit: I have a car loan which is 25% of my monthly living expenses. Similar to yours, it’s interest rate is 3.5% and whilst I could clear it, my ISA is performing better. So my thinking is to overpay it monthly, as the interest saving is better than any of my current accounts pay, but not at the expense of my monthly ISA contribution.
I sold my flat about a year and a half ago and decided to sort my finances out so as not to squander the money. Also having been through redundancy a few years back, voluntary granted, but having no real prospect of a decent redundancy payment in my new work, I wanted to put some away for my peace of mind.
I maxed my ISA for that year, leaving the remainder in current accounts and my 1-2-3 account.
Recently I’ve been thinking approximately 24 months living expenses in cash is beyond necessary so pushing more towards my ISA. I’m thinking 12 months is a more sensible amount. Probably still a touch excessive, but given nobody really knows how Brexit transition is going to play out, better to be safe than sorry.
Edit: I have a car loan which is 25% of my monthly living expenses. Similar to yours, it’s interest rate is 3.5% and whilst I could clear it, my ISA is performing better. So my thinking is to overpay it monthly, as the interest saving is better than any of my current accounts pay, but not at the expense of my monthly ISA contribution.
Edited by SJfW on Monday 20th January 17:17
It all comes down to your own variables.
How risky if your job?
How long might it take you to get another job?
Is your job recession proof?
How big are your outgoings?
Do you have access to credit i.e credit card?
Do you have long term medical / sick cover with work?
Etc etc.
Personally, I have always been in the 6 month outgoings camp.
In more recent times 3 months is usually considered ok, however I remember the recession in 2009 and there were people out of work for months. Sector depending of course. In the US people could not even get basic jobs like pizza delivery. Savings cashed in at 50% loss which then only lasted them a few months and no job. Property worth nothing and no one had money to buy cars or boats etc so it was all recovered by the banks. Snowball effect of people buying houses they couldn't afford.
I have also seen a friend have a bad accident and end up off work for over a year. Had 6 months full pay with work but then SSP and had no EF to speak of so by month 7 was basically screwed.
How risky if your job?
How long might it take you to get another job?
Is your job recession proof?
How big are your outgoings?
Do you have access to credit i.e credit card?
Do you have long term medical / sick cover with work?
Etc etc.
Personally, I have always been in the 6 month outgoings camp.
In more recent times 3 months is usually considered ok, however I remember the recession in 2009 and there were people out of work for months. Sector depending of course. In the US people could not even get basic jobs like pizza delivery. Savings cashed in at 50% loss which then only lasted them a few months and no job. Property worth nothing and no one had money to buy cars or boats etc so it was all recovered by the banks. Snowball effect of people buying houses they couldn't afford.
I have also seen a friend have a bad accident and end up off work for over a year. Had 6 months full pay with work but then SSP and had no EF to speak of so by month 7 was basically screwed.
red_slr said:
It all comes down to your own variables.
How risky if your job? Police officer so fairly secure (although in my probation but as long as I don't do anything wrong ill be safe!).
How long might it take you to get another job? I could get something that pays the same fairly easily.
Is your job recession proof? Yep!
How big are your outgoings? £550 a month for everything with the house, £420 in loan repayments, rest is for fuel, days out etc (£1,400 take home after tax, NI and pension)
Do you have access to credit i.e credit card?No...id like to stay away from this
Do you have long term medical / sick cover with work?
Etc etc. six months full pay, pay into a group insurance which then gives me another six months full pay. Also get a load of other things with this.
Personally, I have always been in the 6 month outgoings camp.
In more recent times 3 months is usually considered ok, however I remember the recession in 2009 and there were people out of work for months. Sector depending of course. In the US people could not even get basic jobs like pizza delivery. Savings cashed in at 50% loss which then only lasted them a few months and no job. Property worth nothing and no one had money to buy cars or boats etc so it was all recovered by the banks. Snowball effect of people buying houses they couldn't afford.
I have also seen a friend have a bad accident and end up off work for over a year. Had 6 months full pay with work but then SSP and had no EF to speak of so by month 7 was basically screwed.
I think I'll aim for six months to start with. It would only be £3,000 approx so not a huge amount. How risky if your job? Police officer so fairly secure (although in my probation but as long as I don't do anything wrong ill be safe!).
How long might it take you to get another job? I could get something that pays the same fairly easily.
Is your job recession proof? Yep!
How big are your outgoings? £550 a month for everything with the house, £420 in loan repayments, rest is for fuel, days out etc (£1,400 take home after tax, NI and pension)
Do you have access to credit i.e credit card?No...id like to stay away from this
Do you have long term medical / sick cover with work?
Etc etc. six months full pay, pay into a group insurance which then gives me another six months full pay. Also get a load of other things with this.
Personally, I have always been in the 6 month outgoings camp.
In more recent times 3 months is usually considered ok, however I remember the recession in 2009 and there were people out of work for months. Sector depending of course. In the US people could not even get basic jobs like pizza delivery. Savings cashed in at 50% loss which then only lasted them a few months and no job. Property worth nothing and no one had money to buy cars or boats etc so it was all recovered by the banks. Snowball effect of people buying houses they couldn't afford.
I have also seen a friend have a bad accident and end up off work for over a year. Had 6 months full pay with work but then SSP and had no EF to speak of so by month 7 was basically screwed.
Just remembered that I've got a savings thingy through work. £1 a day taken out of my wages before I get my wages so don't notice it. Can't touch it for ten years. Allowed one account a year, next year it will be £2 a day etc.
After ten years ill get the lump sum back plus a bonus if the investments have gone well. (Will get what I've put in no matter what though).
LosingGrip said:
Just remembered that I've got a savings thingy through work. £1 a day taken out of my wages before I get my wages so don't notice it. Can't touch it for ten years. Allowed one account a year, next year it will be £2 a day etc.
After ten years ill get the lump sum back plus a bonus if the investments have gone well. (Will get what I've put in no matter what though).
Well that's interesting. Wonder who manages that?After ten years ill get the lump sum back plus a bonus if the investments have gone well. (Will get what I've put in no matter what though).
Simpo Two said:
LosingGrip said:
Just remembered that I've got a savings thingy through work. £1 a day taken out of my wages before I get my wages so don't notice it. Can't touch it for ten years. Allowed one account a year, next year it will be £2 a day etc.
After ten years ill get the lump sum back plus a bonus if the investments have gone well. (Will get what I've put in no matter what though).
Well that's interesting. Wonder who manages that?After ten years ill get the lump sum back plus a bonus if the investments have gone well. (Will get what I've put in no matter what though).
I had one (not police) and cancelled it a few years ago as it dropped out of QP status which was a bummer.
OP - as for safety of the job, yes its "safe" in terms of financial crisis. So that's boxed off.
Pension provisions are also very good so considerable chunk of "savings" in your pension.
However, you carry more work related risk, accident and injury. So I think 6 months expenses is prudent so you have an effective 12 month safety net.
Pension provisions are also very good so considerable chunk of "savings" in your pension.
However, you carry more work related risk, accident and injury. So I think 6 months expenses is prudent so you have an effective 12 month safety net.
I don’t have any savings but my job is pretty secure and I don’t have any loans or finance (other than mortgages). If something bad happened I could use credit cards etc or worst case take a loan out etc. I imagine loans are pretty quick these days and with a good credit rating could probably get a substantial amount of funds within 2 weeks.
JapanRed said:
I don’t have any savings but my job is pretty secure and I don’t have any loans or finance (other than mortgages). If something bad happened I could use credit cards etc or worst case take a loan out etc. I imagine loans are pretty quick these days and with a good credit rating could probably get a substantial amount of funds within 2 weeks.
But if you save, (a) you don't have to get loans (that cost you more than you get), and (b) savings will grow. So you'll end up a lot better off if you start saving. 'Be your own bank'.I find saving pretty addictive and the more cash I have available, the more relaxed I feel about things. I don't have any debt asside a mortgage, and I know being logical I would be better off paying a chunk off my mortgage as I am actually losing money due to inflation
I currently have a years take home pay in a Marcus account which amounts to a sum that would clear 25% of my mortgage. I live pretty frugaliy so could make that last two years if I needed to, longer with benefiits and buying stuff at car boots and selling it on eBay.
I can also get a cash advance on my credit card at 0% for 18 months for a flat fee of 3.5%. So essentially if the worst came to the worst I could borrow £10k for 18 months and it would cost me £350 in interest. I would never want to borrow this money, so I would only do it if I had no other options to live.
Holding cash makes little sense when you think about it, the only benefit for me is it tends to make me worry about things a little less. Most people I speak to at work live month to month and have little or no savings. In many ways I envy them for really not caring about it.
I currently have a years take home pay in a Marcus account which amounts to a sum that would clear 25% of my mortgage. I live pretty frugaliy so could make that last two years if I needed to, longer with benefiits and buying stuff at car boots and selling it on eBay.
I can also get a cash advance on my credit card at 0% for 18 months for a flat fee of 3.5%. So essentially if the worst came to the worst I could borrow £10k for 18 months and it would cost me £350 in interest. I would never want to borrow this money, so I would only do it if I had no other options to live.
Holding cash makes little sense when you think about it, the only benefit for me is it tends to make me worry about things a little less. Most people I speak to at work live month to month and have little or no savings. In many ways I envy them for really not caring about it.
Joey Deacon said:
I currently have a years take home pay in a Marcus account which amounts to a sum that would clear 25% of my mortgage. I live pretty frugaliy so could make that last two years if I needed to, longer with benefiits and buying stuff at car boots and selling it on eBay.
It's an attractive scenario, claiming benefits and being a modern day Steptoe. Man I'm jealous. Badda said:
Joey Deacon said:
I currently have a years take home pay in a Marcus account which amounts to a sum that would clear 25% of my mortgage. I live pretty frugaliy so could make that last two years if I needed to, longer with benefiits and buying stuff at car boots and selling it on eBay.
It's an attractive scenario, claiming benefits and being a modern day Steptoe. Man I'm jealous. red_slr said:
Thought benefits didn't kick in till you had used most of your savings?
Depends which benefits. You can claim JSA as soon as you're out of work so long as you've paid NI for I think the previous 2 years. It paid for the greenhouse I put in while I was job hunting after being made redundant some years ago.Gassing Station | Finance | Top of Page | What's New | My Stuff