How much should you have in a bank account

thinkabouit

How much should a person have saved in there account. I no people from all ages that claim to have all sorts. Some ranging from absolutely nothing to others claiming 30+ thousand.

In my opinion just off the top of my head anybody over 30 should have at least €1000 saved in there account for a rainy day.

Opinions please

brownej

1000 is not a whole lot to have saved. I wouldnt consider that to be a rainy day fund.

I would think a proper rainy day fund should have 1 years after tax income saved in it. And this would be separate from savings and investments.

It all depends on what stage of life you are at. If you are saving for a house you would have 50 thousand plus put aside for that. Are you saving for a car, or holidays or just saving in general.

Just noticed this is in the feedback thread. Probably should be moved to finance and banking or somewhere like that.

mumo3

It all depends on each person's personal circumstances.... but 2 of my teenagers are working and I try to get them to aim to have at least 1 weeks wages in their account at all times, and then move to trying to have two weeks and so on.

FintanMcluskey

3 years salary put aside????!!!

Hahaha pure fantasy.

If I could have that put aside I would pay off the mortgage and leave my current role and work in something low paid and low responsibility.

Irish_wolf

Assuming this gets moved to Personal Finance or whatnot. The absolute bare minimum you should have saved is 3 months of expenses. Add up your outgoings for your worst month (rent, food, fuel , energy, insurance etc.) multiply that by 3, put that amount in a savings account and forget about it. Really you want anywhere from 6 months to 1 year but that's not always feasible for everyone's budget.

Once you have that safety net you can start building up additional savings for emergency funds, planned large expenses (holiday/car/mortgage), and additional investments.

o1s1n

https://www.boards.ie/discussion/comment/119755797#Comment_119755797

What good is having 3 years cash available to you over 1 year in cash? Surely any issue that could arise could be payable in 1 year's salary and you are just wasting 2 years of salary sitting there when they could be invested?

(btw I assume by 'cash' you mean having on deposit and not actually reams of cash in the house?)

Mongfinder General

https://www.boards.ie/discussion/comment/119755817#Comment_119755817

Circumstances. If your married, the sum total of sweet FA is more than enough.

triddles

https://www.boards.ie/discussion/comment/119755797#Comment_119755797

Hahah you keep 3 year's salary in cash.

Spear

Moved to a forum that's actually related to the topic instead.

granturismo

https://www.boards.ie/discussion/2058267859/how-much-should-you-have-in-a-bank-account

There is an excellent sticky on reddit, most people should be able to find their place on the flowchart.

https://www.reddit.com/r/irishpersonalfinance/comments/w15j0e/irish_personal_finance_flowchart_v21/

Donald Trump

Fair enough, some people have it tough and can be in constant financial difficulty, or have a lot of financial responsibilities and obligations, but an adult who is otherwise doing alright with no major worries should have a lot more than a grand put aside for "just in case" scenarios. Or at least some fairly liquid assets.

Dodge

These threads always pop up and you still have lunatics suggesting the minimum saving requirement is three years salary in cash

I can tell you with absolute certainty that the people with 3 years salary readily available to them aren’t **** about on boards.ie

The_Honeybadger

I can’t think of any good reason to have three years livings costs in cash, that’s insane.

The OP’s question is hard to answer but for most people 3 months living costs is a good initial target to aim for. That’s a decent buffer against an unexpected disruption of income for illness or unemployment or whatever.

DoctorEdgeWild

Impossible to create a general rule for everyone on such a broad question. It would all depend on what your plans for the future are, what dependents are, what earning power you have etc.

The only thing I can tell you for certain is that people on Boards absolutely love wild financial claims. Check out some salary threads where people claim absolute millions are rolling in, check their other posts and they'll be looking for advice on saving up to buy something for a grand. Don't fall into the trap of trying to compare yourself with fantasists. Check out some of the good advice on here in other threads from regular helpful posters if you are feeling any pinch.

Donald Trump

https://www.boards.ie/discussion/comment/119755915#Comment_119755915

Why not?

You never know........maybe their annual salary is only 300 quid.

Kurooi

Enough that you can live comortably until you find a new job. If you have a spouse or relatives you can depend on, you don't need a years salary on you. And yes I fully assume the rainy day is losing a job.

If you live frugally, your '6 months salary' might actually last you someone elses 12.

If you're employable, can reasonably find a job in 1-2 months, you don't need 6 saved.

If you live in an old house or have an old car you might keep more saved in case anything expensive breaks.

It's very personal. I might keep about 12k based on the fact that if either me or spouse lost a job we can live as usual for 6 months , and it should take less than 3 months to find a new job. Double it for prudence.

The Mighty Quinn

Threads like this both scare me and depress me.

A years post-tax salary in savings put aside that I can just ignore and keep as a rainy day fund is like some type of mythical fantasy fairytale to me.

Of course I can see the sense in it and the peace of mind and security such a safety net must bring... but how do people afford this! What age are they before they can attain this? I'm at the back end of my 30s and still living month to month. Paying a mortgage, keeping two cars, health insurance, paying into a pension, and paying €17,000 a year to a creche.

I'm in a constant state of trying to keep up with life expenses, and I'm not eating out or going on holidays, don't smoke, drink an average of 2 pints a week, don't live in a nice fancy house, don't drive a fancy car. Jesus christ.

Jim2007

https://www.boards.ie/discussion/2058267859/how-much-should-you-have-in-a-bank-account

It very much depends on your situation, but the general rule of thumb is that you should have at least 3 months worth of your average expenses. And I'd qualify that by saying that it assumes you are the typical employee of a well established business. That way even if it took several weeks to sort out unemployment benefits, loss of income insurance etc... or you felt the need to resign and look for another job, you should be well covered.

Some people are self employed and that means they probably need a higher level of savings at least 6 months and possibly even more. For example, in the past I have know IT contractors who were owed up to 50k in back pay and lost it when the company went bust. Why they continued working after failing to get paid in months one, two and three, I don't know but they did. Sometimes if you are a specialist it make take a few months to land a new gig, so again that would need to be taken into account.

Jim2007

https://www.boards.ie/discussion/comment/119755797#Comment_119755797

Having three years salary in cash would seem to be a bit excessive. Having six months in cash with a further two and a half years in near cash products such as time deposits, money market products etc... would seem more appropriate.

Jim2007

https://www.boards.ie/discussion/comment/119755915#Comment_119755915

Your opinion is not fact and you far from being absolute certain of anything about the people who visit these boards.

Jim2007

https://www.boards.ie/discussion/comment/119756761#Comment_119756761

You are probably too late.....

Most of the people I know did it early life before they had commitments and they have just been topping it up ever since. My son started his first job out of college at the beginning of this year and he has got about four months built up. It's much easier at this stage, he just has to look after himself, nothing else.

Dodge

https://www.boards.ie/discussion/comment/119757085#Comment_119757085

Jim, I appreciate your input here and you’re clearly very knowledgable. But you need to be able to spot tongue in cheek comments every now and then.

I’ll rephrase it, people who have 3 years salary saved up and readily available to them in cash, should have better things to be doing than arsing about on boards.ie

Jim_Hodge

https://www.boards.ie/discussion/comment/119755915#Comment_119755915

I wouldn't advocate that 3 years salary in an instant access account is what people should aim for but don't dismiss the possibility that posters here have that kind of amount readily available. It's quite achievable at a particular time in your life.

OP work on having 3months salary saved and available at short notice.

The Mighty Quinn

https://www.boards.ie/discussion/comment/119757123#Comment_119757123

Unfortunately I came out of college in 2007. I got a year working an 18K/yr job, while renting, not living at home. Arse fell out of life on 2008 and lost my job. Had a torrid time getting work for years. Then worked in the job bridge scheme for 9mths. Was 2014 before I earned even 30K/yr. Bought a house in 2017.

Hard to hear that I'm probably too late. Even though its true. I'm not saying you're saying it this way Jim, but it sometimes feels like it's said as if it's because I was lazy or wasteful. Which isn't true.

Kinda feel maybe people my age missed a chance because of recession. Still, today's crop are struggling to buy a house. Every cohort has their obstacles.

Dodge

Seeing as my previous post was tongue in cheek, this one is serious and hopefully gives you some comfort The Mighty Quinn

For most of my adult working life, I’ve been in debt or living for pay day. Over the last 6-7 years I’ve paid off everything I owed, went on some nice holidays, upgraded our house and we have a nice bank balance that grows every month now.

At one stage, our money issues felt overwhelming. We knuckled down and we’re pretty comfortable now. Not 3 years salary in cash rich, but we can book any trip we want and fix anything that needs to be fixed in the house immediately

For people like me, and I’m guessing you, that’s real comfort. And when you’re comfortable, you’ll find saving comes easy. Best of luck, but just keep paying the bills and living your life. You’ll get to a stage when you won’t be checking to see if you can cover them

FintanMcluskey

https://www.boards.ie/discussion/comment/119757123#Comment_119757123

My son started his first job out of college at the beginning of this year and he has got about four months built up.

How in gods name does a young fella have about half his salary saved in the 1st few months of his working life.

What are his expenses like rent, vehicle pension etc?

The_Honeybadger

https://www.boards.ie/discussion/comment/119756761#Comment_119756761

This would be a common enough scenario TMQ. Raising a family has become impossibly expensive, especially if you don’t have childcare support from family.

Anybody with kids who isn’t a high earner is going to be struggling with cost of living at this stage. Doesn’t make it any easier I know, but you’re not alone.

Pissy Missy

I'm in my 30s and have 30k however its in debt and disability allowance only goes so far, looking forward to having a job soon and to actually be able to save and pay off debt

Jim2007

https://www.boards.ie/discussion/comment/119757331#Comment_119757331

He does not live in a consumer society like Ireland for a start and I think that is a big part of it. Everyone here (Switzerland) is careful with their money whether they are a banker or the girl at the supermarket checkout. Most young people have only one device and most often it’s a pay as you go subscription - the first thing they’ll do when they come into the house is ask for the WIFI password, they will go to a night club a couple of times a year and won’t go beyond a pizza when they dine out, which is also a couple of times a year. The main socializing is done through local clubs, who usually have a hut or building where parties are held at the weekend - for free. Most use public transport and pay about 20% of their salary in rent. It’s not unusual for them to stick a couple of K a month in savings.

But as I said I think a lot has to do with the environment - thrift and savings is the culture. If everyone around you thinks it’s stupid to buy new skis when there are second hand ones around, you’ll by the second hand ones too.

Jim2007

https://www.boards.ie/discussion/comment/119757210#Comment_119757210

When I say you are too late, I mean most of the people who have managed to build up a large rainy day fund were able to do so before they had family and financial commitments. If you have just got a mortgage and young family etc I don’t think it realistic to start with the objective of building up say a six month fund. That does not mean you should no try and put money aside for when something bad happens, but in my experience people with realistic financial goals are more likely to achieve them.

https://www.boards.ie/discussion/comment/119755842#Comment_119755842

How long is a piece of string?

If you're a single man, no wife, no kids, no mortgage, no car, living rent free in a house you inherited from your parents and earning 50K and walking to work in the morning then I'd say you could save 33% of your salary (ie a total of three year's salary by the time you've been working consistently for nine years) handy enough provided you're not blowing it on bottles of Champaigne at the dog track five or six nights a week. Obviously I agree that wouldn't be a fair cross section of Irish society, but by no means would it be "pure fantasy" either.

I did it. I know others who did it.

A guy earning minimum wage and keeping six kids in school isn't going to have that experience, fair enough, but that doesn't mean it's a ridiculous notion or utterly unobtainable.