Warchest never seems enough....

[d000hg]

WHS - Currently if I can't support family for a year without any work I get stressed. I'm not stressed.

Luckily the wife works; her salary alone isn't enough but it means I'm just topping up what we need from month to month - the aim is our combined salaries (mine being very low) covers the bills and the bulk of what I earn goes for holidays, savings, etc.

[NorthWestPerm2Contr]

This!! My 6 month warchest was considerably smaller 5 years ago than it is now lol....

6 months to live the life I live now and 6 months with cutbacks and I am a happy man.

10k warchest? That isn't a warchest! That is the bare minimum needed to cover your obligations if a client missed a month!!

Funny thing with a warchest though, I can't take enough out of the business to stay under the tax threshold anyway so it naturally keeps growing. What do other people do when their warchests hit their expected levels? Just stop worrying or have they got some super duper way to get the rest of the cash out? Guess I am not aggressively avoiding tax with divis to wife etc though.

Believe me - coming from a 27k/year permie job, 10k seemed like a good warchest!

[Old Hack]

Believe me - coming from a 27k/year permie job, 10k seemed like a good warchest!

We've always got enough for a few years. I have always wanted enough money so I could retrain if I needed, or wanted to. Currently sat at enough for about 3 years, given we're now mortgage free ish, and have absolutely no debt. Slowly eating into it as I have a forced couple of months off. Looking at furthering that with a Masters in renewable's run from Exeter.

[TheCyclingProgrammer]

6 months minimum for me (so enough retained profit in the company to cover my partner and I's regular dividend payments over that time). 9-12 months to be comfortable. And that's just what is left in the business. Also like to keep a £1k emergency fund in my personal savings account, on top of my general savings.

We're currently thinking about buying our first house next year which will mean dipping into the war chest and taking a larger dividend than normal (and paying the resulting higher rate tax) to cover it and I don't want to do it unless I can leave a 6 months buffer in the business. Of course, entering the world of property ownership makes me inclined to want a bigger buffer so I'll be working hard to make sure it gets up to 12 months minimum.

In an ideal world, I'd wait an extra year before buying but we need to start applying for schools for my daughter next September (she starts school in 2015) and I'd much rather be moved before, rather than after the deadline. We do not want her going to school where we currently live!

[TheCyclingProgrammer]

Mine sits in a high interest business account with my corp tax.

I wasn't aware such a thing existed!

[TheCyclingProgrammer]

Yeah, there's a build up in the company too, but I view that as separate. I suppose they're both parts of the warchest - the company warchest and my warchest.

I view the retained profit in the company as my warchest. It's there to cover my regular quarterly dividend payments in the absence of work. Anything I've accumulated personally is just savings, which I budget for different things (e.g. rainy day funds, projects, long-term savings and investments etc.).

To build up a significant personal "warchest", I'd have to take more out of the business and pay higher rate tax on it, so there's not much point.

[Old Hack]

6 months minimum for me (so enough retained profit in the company to cover my partner and I's regular dividend payments over that time). 9-12 months to be comfortable. And that's just what is left in the business. Also like to keep a £1k emergency fund in my personal savings account, on top of my general savings.

We're currently thinking about buying our first house next year which will mean dipping into the war chest and taking a larger dividend than normal (and paying the resulting higher rate tax) to cover it and I don't want to do it unless I can leave a 6 months buffer in the business. Of course, entering the world of property ownership makes me inclined to want a bigger buffer so I'll be working hard to make sure it gets up to 9 months.

In an ideal world, I'd wait an extra year before buying but we need to start applying for schools for my daughter next September (she starts school in 2015) and I'd much rather be moved before, rather than after the deadline. We do not want her going to school where we currently live!

Remember the Gov are giving out free money from January 2014, well, 20% at 0% interest, much like a post by sas.

[TheCyclingProgrammer]

Remember the Gov are giving out free money from January 2014, well, 20% at 0% interest, much like a post by sas.

I take it you're talking about the new HomeBuy scheme? I've already looked into it and I'm not sure we'll really be eligible. We're hoping to have a 20-25% deposit through our own means. I think there's been a few discussions on here about it.

The repayment also increases if your house value does to remember.

[Old Hack]

I take it you're talking about the new HomeBuy scheme? I've already looked into it and I'm not sure we'll really be eligible. We're hoping to have a 20-25% deposit through our own means. I think there's been a few discussions on here about it.

The repayment also increases if your house value does to remember.

No, I mean the Help to Buy scheme; every one is eligible, all you have to do is provide a min deposit of 5% and the gov provides 20% interest free for 5 years (could be 3). Everyone eligible. Currently only available on new builds, although will be on all homes from Jan 2014. My wife and I are buying flats with it next year.

[TheCyclingProgrammer]

No, I mean the Help to Buy scheme; every one is eligible, all you have to do is provide a min deposit of 5% and the gov provides 20% interest free for 5 years (could be 3). Everyone eligible. Currently only available on new builds, although will be on all homes from Jan 2014. My wife and I are buying flats with it next year.

Help to Buy - yes that's the one I meant, wasn't sure about the name.

I may look into it again but I'm sure when I looked into it before it didn't seem like it would be of any benefit if you already have a decent deposit.

OTOH, if you can get it, I suppose it saves you 5 years worth of interest, even after accounting for any increase in value of the original loan.

Have the gov actually released any more information on it, as everything I could find before was a bit vague.