rainy day fund (warchest...) and house deposit

[WordIsBond]

the other thing I am doing is over paying the mortgage, with our provider for every £1 we over pay we can take a £1 payment holiday later. so the idea is that 1) we pay the mortgage off in <10 years or 2) I have some bench and can stop paying the mortgage if needed

A flexible / offset mortgage is very useful for savings you hope never to need, but want to be able to access if necessary.

[WordIsBond]

We are considering a baby soon though, so potential perfect storm on the horizon!

Seems like someone is ahead of you on that.

[Pherlopolus]

the other thing I am doing is over paying the mortgage, with our provider for every £1 we over pay we can take a £1 payment holiday later. so the idea is that 1) we pay the mortgage off in <10 years or 2) I have some bench and can stop paying the mortgage if needed

[wantacontract]

Interesting to read - thanks.

Thankfully my Mrs is Ast Director level in her perm job, so no immediate money worries if I go to the wall - painful, but we will cope.

We are considering a baby soon though, so potential perfect storm on the horizon!

Great point about personal assets too, I have quite a few big boy toys that I could flog if needed which will release approx 4 month maybe 6 months of money to live off - as by that point I'd be in panic mode and belt would be properly tightened.

Cheers guys, very helpful as always

thing about selling your toys when you need to, it's always painful and you tend not to get the true value, better off selling them at your leisure....

[Danglekt]

Interesting to read - thanks.

Thankfully my Mrs is Ast Director level in her perm job, so no immediate money worries if I go to the wall - painful, but we will cope.

We are considering a baby soon though, so potential perfect storm on the horizon!

Great point about personal assets too, I have quite a few big boy toys that I could flog if needed which will release approx 4 month maybe 6 months of money to live off - as by that point I'd be in panic mode and belt would be properly tightened.

Cheers guys, very helpful as always

[diseasex]

1 years worth for me, which I have now depleted to 6 months...

6 months business as usual here (invested in bonds on ISA). rest goes for investments and risky stuff. I wouldnt touch that safety cushion in normal circumstances

[wantacontract]

1 years worth for me, which I have now depleted to 6 months...

[Maslins]

Also worth considering:
- are you providing for others? If it all goes wrong but it's just you, less of an issue than if you've got a family who have to go without.
- what personal savings do you have? Presumably anything you had would be going into house deposit...but some people might have possibly sources of cash (selling assets/investments, sponging off family/friends etc) outside their Ltd Co.

[northernladuk]

Same as the above for me. 3 months absolute minimum, 6 to breath easy and anything above is BAU.

One thing just to consider which varies from person to person. What do you call a months living. The absolute minimum to survive and pay bills or to continue as normal if you were in contract. I'm guessing there is a mix of approaches. For me if I had 3 months of carrying on as normal which could also be construed as 6 months at a minimum I say I have 3 months...

If that makes sense......

[ITblows]

I dropped to around 6 months when moving house but prefer to stick to 12 Months, I don't think I would feel comfortable with less than 12 months with the uncertainty about at the moment

[TheCyclingProgrammer]

I'm never happy with less than 6 months. Currently got nearly 2 years but will be taking a chunk out soon for some work on the garden. Last big chunk I took out was for house deposit and I left myself 6 months. I'm more comfortable with a year.

[jbond007]

I am aiming for a minimum of 6 months with 12 being a nice to have, but then my wife doesn't earn much and we like nice holidays. I'll never stop putting a proportion aside, it will just be less once I hit 6 months.

Obv if you have a partner who can cover off the bills etc you could run with less.

+1

6 months is an absolute minimum for me, with 12 months making me feel a lot more comfortable.

[Pherlopolus]

I am aiming for a minimum of 6 months with 12 being a nice to have, but then my wife doesn't earn much and we like nice holidays. I'll never stop putting a proportion aside, it will just be less once I hit 6 months.

Obv if you have a partner who can cover off the bills etc you could run with less.

[Danglekt]

Been saving for the last year to get a deposit together so we can buy our first house. I have a reasonable size lump in the company now that I'm going to draw out sometime between now and Feb (and face the tax bill next year)...

So this will obviously deplete the rainy day fund significantly - any views on what a good minimum rainy day fund is? I have never had the misfortune of being on the bench, so really don't know what to make provision for. I've always thought a bare minimum of 3 months income is absolute skin of teeth stuff - any thoughts? (and please no "as much as you can afford" know that already )

I obviously have all the company tax/vat squirelled away elsewhere so I'm not going to cause any unlawful dividends etc.