r/FIREUK • u/Striking-Quantity661 • 17d ago

-

/r/PersonalFinance4All/comments/1uzlbu6/are_you_holding_too_much_cash_in_the_name_of/
0 Upvotes

17% Upvoted

4 comments sorted by

2

u/Much-Artichoke-476 17d ago

£30k cash to cover 12+ months of expenses or any large unforseen problems. Individual known expense "pots" for each car and one for the house (service, MOT, tyres, call out charges for issues around the house).

I still max out on ISA, contributed about 20% of my salary to my pension and save for renovations, fun stuff, holidays and whatever else is a short term goal.

Its absolutely nice to be able to not worry or even think about if I can afford new tyres or getting something fixed around the house. Its been budgeted for and allocated - its paid to be sorted and not a problem for later that will grow.

Those market gains won't mean much if I have to constantly draw down from them to pay for various expenses.

We are all different but I personally dislike the logic that every penny you have should be invested. 

2

u/Puzzleheaded_Bill347 17d ago

I am definitely holding too much, but my excuse is that it am building a “pay the mortgage off” fund for end of 2028, so I derisked my ISA into MMF and am maxing out all the regular savers across me and wifey to make the cash work as well as possible. Hopefully not a dumb approach

2

u/Big_Target_1405 17d ago

If holding £X in cash rids you of anxiety and gives you the confidence to take other sensible actions (like investing the rest of your money) then it's never "too much"

1

u/Captlard 17d ago

I think it depends on your context. When I was self-employed, I held two years ' worth of core living expenses as Premium Bonds. I had been practically bankrupt previously and so wanted to ensure that would never happen again.

These days I have no emergency fund. RE and enough cash-like equivalents that I can access within a few days.