Do you have money set aside for a “rainy day”? With responsibilities and financial commitments it is a good idea to have some money set aside for emergencies. But how much should be set aside?
Firstly, we should consider what is an ’emergency’. For me, I would include any of the following:
- Loss of income for either yourself or your partner if there are financial dependencies. If there are two incomes then the chances of being laid off at the same time are smaller
- Health-related issues for yourself or family, which may well be linked with loss of income.
- Repairs around the home, e.g. broken roof tiles, broken fences, burst pipes, etc.
- Replacements for essential possessions that are absolutely necessary, e.g. a car, oven, washing machine, etc.