Emergency fund (UK) – how much to save, where to keep it, and when to use it

Much as we love investing at Monevator, even we believe saving for an emergency fund comes first. Building a cash stash to bubble wrap you against life’s bad breaks is probably the most important financial move you can make – after clearing bad debt, of course. Stuff happens, as they say in polite company, and that’s the starting point for why you need an emergency fund. Why you must have an emergency fund When you’ve got a job and good health and your income exceeds your outgoings, setting cash aside might not even occur to you. But without savings, you’re walking a tightrope. The smallest shove can send you into the abyss. You might not be hit by one of the life-changing shocks that kicks people on to the streets. But there are plenty of smaller things that can go wrong: Your income may drop unexpectedly, and no longer cover your essential expenses. A member of your family could get ill, and you want to hurry forward treatment. Something might blow up – from the archetypal boiler to…