Emergency Fund Required

T

TRS30

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Am in the process of a full financial review with the aim to increase pension contributions, over pay mortgage and make sure we are making best use of all income, cutting unnecessary expenditure etc.

One of the first things that you always see on here is people advised to have 6 months emergency fund. For us that would be circa €25-30K. This seems like a large amount of money to have sitting there doing nothing and been eroded by inflation.

We very fortunate that we have secure jobs with long service (large redundancy, PHI & life cover) and immediate family with large (around €30K) amount of cash on instant access deposit.

In our circumstances what is an appropriate amount of cash to have instant access (i.e. earning little or no interest)? I was thinking more €5K, car breaks down, washing machine goes etc. however interest in other people opinions.
 
Thanks Brendan. I did do a quick search however don't believe I saw that thread. Put's it very clearly and concisely. I don't believe anything has changed in the 9 years since.

Looks like (for our circumstances) €5K is an adequate emergency/rainy day fund.
 
Firstly, redundancy is never guaranteed, I've seen people who thought it was almost a "right" and when their company got bought out and the new owners changed T&C's, they got left with statutory and that was it.

Secondly, and again I've seen this happen, depending on immediate family on money matters can end in tears.

To me, 5k would be too low, way too low but your emergency fund doesn't need to be in an instant access bank account, as long as you can get it reasonably quickly and have a credit card (for example) to tide you over, it may suffice.

in a nutshell, if the house burnt down tomorrow or something happened not covered under PHI/leifcover and it was going to take a few months for an insurance payment and you had to cover a mortgage and rent for a year, could you do so?
 
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