Part 4/8:
How Much Should You Save?
While the thought of building an emergency fund can seem daunting, starting small is key. Set an initial target of saving between £500 and £1,000, which can cover smaller emergencies, elevating your peace of mind. Once that milestone is reached, aim to expand your fund to cover 3 to 6 months' worth of essential expenses, such as rent, food, and utilities.
For instance, if your monthly essential expenses average £2,000, you should aim for an emergency fund of approximately £6,000 to £12,000. This larger goal will provide a comprehensive cushion against severe financial challenges, such as prolonged unemployment or unexpected large payments.