How much do you consider to be a decent war chest?

[psychocandy]

6 months worth minimum I reckon. About £2K a month will do it for me so £12K.

Been back to contracting 8 months now and almost got 6 months stashed away. Got debts to pay off which I have been doing as well (and less debts = less outgoings = less stash needed) but first thing wanted to get on the way to 6 months money saved.

When it gets past 9 months worth and the debts are paid off might less the Mrs have her new kitchen. (as long as its not expensive).

I got £15K voluntary redundancy which I knew would last me about 7 months. In the end, had to use about one months worth so it worked out well. Could have gone the other way of course, and no doubt I'd be bricking it after 5 months or so,

[psychocandy]

I'm a permie with 2 kids so I don't live no playboy lifestyle, as I'm getting made redundant I should get my mortgage protection to kick in so I'm thinking about outgoings of £1500 per month.

Having said that I'd need to buy a new car & lap top (company car & pc) at the mo

£3000 for a car maybe. Then £17K left. 11 months+

Fair bit. But a lot depends on how much you like your permie job and how you see it going. If you hate it anyway then go for it. And it depends on how marketable your skills are.

With me, permie job as crap, company was struggling, so voluntary was a way of getting out, getting more payout etc. Not sure about my skills, but having been made redundant 3 times in last 10 years I've always found something else within max 2 months. Depends on how confident you are.

Also, depends if your willing to travel if job market is crap where you are. Personally, I aint keen but job market isnt too bad for me.

[cojak]

WPCS

You need 6 months minimum in this climate.

[kingcook]

I got war chest which can last for atleast 4 months (no lux. just basics). My skills are asp.net with 4 years of experience.
I am flexible to go anywhere (except Up North ) for a contract role.

So is 4 months enogh in current climate or its too short?

I'd say you were cutting it fine, but like others say, if you're confident go for it

Don't forget expenses you need to pay for while you haven't yet found a contract/waiting for your 1st invoice to be paid, such as travel expenses (to interviews and clients office), accommodation (if needed), accountancy fees, etc. If you find a contract to start say beginning of March, you may not be paid until mid-April.

All the best!

[craig1]

I think the more important question is: Are you good with money? Is your wife? If you're given £20k, will the silly part of your brain overwhelm the sensible part and you'll go blowing it after convincing yourself that you'll get another job quickly?

If you're not convinced (be brutally honest with yourself) then look at other options to stop you impulse spending such as notice accounts or joint signature accounts.

£20k can go very quickly if you've no money discipline.

[craig1]

I'd say you were cutting it fine, but like others say, if you're confident go for it

Don't forget expenses you need to pay for while you haven't yet found a contract/waiting for your 1st invoice to be paid, such as travel expenses (to interviews and clients office), accommodation (if needed), accountancy fees, etc. If you find a contract to start say beginning of March, you may not be paid until mid-April.

All the best!

A good point, I'd consider planning for getting no money for 3 months after you start a contract and you'll have enough to get through most of the idiotic agency's payment systems. If you're desperate for a contract then they may push for monthly billing with 30+ days payment terms.

[Kelstar]

I agree with the good advice on here. Work out what you need to cover per month, divide it by the £20k and that give you an indication of how long you can last out of work.

I would say to research your area of expertise and check the market for your skills set, speak to a few agents, check job boards etc... You might be surprised at the lack of work and rate squuze at the moment, along with the supply of experienced contractors. I thought my 6 years with a Big 4 would open lots of doors for me and quickly learned that seasoned contractors are by far the preference in the eyes of agents.

Without playing Freud I'd have a think about your reasons for wanting to make the move into contracting. Its not all sunshine and roses but definitely has its plus points. For me an opportunity arose, I was offered a great rate with a small consultancy, from a 10 minute chat over coffee. At the time I was seriously p!ssed off in my permie role with a Big 4, and after 6 years it was time to leave. I took the leap, with no savings and no safety net and survived the first 2 months (till my first invoice was paid) on loans from friends and family. Very lucky girl but it was a bold and risky move, which kept me awake with worry some nights.

I had far more opportunities as a permie and my current role is boring beyond belief. But, it pays the bills and contributes a decent sum to the warchest and thats the trade off.....

[ChimpMaster]

I agree with the good advice on here. Work out what you need to cover per month, divide it by the £20k and that give you an indication of how long you can last out of work.

I would say to research your area of expertise and check the market for your skills set, speak to a few agents, check job boards etc... You might be surprised at the lack of work and rate squuze at the moment, along with the supply of experienced contractors. I thought my 6 years with a Big 4 would open lots of doors for me and quickly learned that seasoned contractors are by far the preference in the eyes of agents.

Without playing Freud I'd have a think about your reasons for wanting to make the move into contracting. Its not all sunshine and roses but definitely has its plus points. For me an opportunity arose, I was offered a great rate with a small consultancy, from a 10 minute chat over coffee. At the time I was seriously p!ssed off in my permie role with a Big 4, and after 6 years it was time to leave. I took the leap, with no savings and no safety net and survived the first 2 months (till my first invoice was paid) on loans from friends and family. Very lucky girl but it was a bold and risky move, which kept me awake with worry some nights.

I had far more opportunities as a permie and my current role is boring beyond belief. But, it pays the bills and contributes a decent sum to the warchest and thats the trade off.....

Well said - we should do coffee sometime

[aceboy]

I have a 2-3 year War chest, this is based on my current expenditure. I realy dont want to have to touch it as it is all part of the long term plan B & plan C routes

[GB2408]

I think you need to assess your own circumstances (commitments, dependancies, debts, outgoings) and then the field you work in, and how confident you are at what you do.

Don't listen to the people that seem to go out of their way to put people off contracting (it's unrealistic for any normal person to save £20K before contracting).

For me personally I am probably 95% confident I could walk out of my current contract today and walk into another for the same or more money within 10 working days. But then I don't mind where I work, if you have a family and cannot work away then you would have to be prepared to wait longer for a contract within a reasonably commutable distance.

I would be more than content with a warchest that would last me 3 months, and that is absolute worst case scenario (perhaps a dry period over Christmas with the added cost that Christmas brings).