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Emergency Funds – How Much Do You Need?


Dave Ramsey says (yes I am mentioning him again) that the first of his Baby Steps is to have an emergency fund of $1,000 before you start to pay off your debts.   I was thinking that since I live in the UK, I should just convert it to £1,000 then I got thinking. How much of an emergency fund do I really need?

I live in a flat in which the heating and hot water is maintained by the building so no chance of the boiler breaking down and costing me a penny.  I don’t have a car so no worries about it breaking down.  I am covered by the wonderful National Insurance so if I need medical care I will be able to get it.

The only things that really worry me  if bad luck comes a knocking,  are my cats health, as vet bills can be expensive and if I can’t work if I get ill.   Does that warrant a £1000 emergency fund? I don’t think a £1,000 emergency fund would be of much help if I really got ill.  So, should I have a smaller emergency fund and put more money towards my debts?

What are your thoughts on this possible financial minefield?  Do you think a girl can get by with a few hundred pounds in an emergency fund?

2 thoughts on “Emergency Funds – How Much Do You Need?”

  1. I’ve also been considering this as well. I’ve been told that one should have 3 x your monthly salary saved up and accessible ‘just in case’. Is this realistic??!! In my case I have a couple of hundred pounds set aside as my rainy day money (which isn’t going towards paying off my massive debts).

    The way I see it, I rent my property, so anything that goes wrong is landlord’s responsibility. I do worry about vet bills, but if the worst comes to the worst I would ask an unemployed friend to take my cat to the PDSA (I know, not the most PC thing, but needs must in a pinch!) I suppose the only thing would be rent and bills…

    So my answer is: yes I think a girl can get by with a few hundred quid as back up

  2. Thanks for commenting. I am so glad that you agree that some people don’t need huge emergency funds if they don’t have a lot that can go wrong. I dream about having 3 months salary put aside when I am debt free but unfortunately it looks like that may be a while.

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