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Emergency Fund

Hi Alex,

Nice job on the emergency fund - 1 year worth puts you into a very strong position. Usually, I'd even say 1 years worth may be a little bit too much (losing potential investment returns) but given the uncertainty around COVID and jobs at the moment, it's probably fine.

Before investing, I think a nice balance needs to be found between understanding what investing is, what happens to your money etc but not going overboard and spending months and months researching.

I think the quickest ways to do this are:

a) read a book or two on the... (More)

Hi - I assume your student loan is here in the UK?

If so - no, it does not make sense to pay this down first.

Generally speaking, I agree it makes sense to pay down debt before investing / saving an emergency fund, particularly if the level of interest is greater than that which your investments will likely earn.

However, due to the way UK student loans are structured with debt forgiveness and only paying back once you've exceeded a certain income - it doesn't make sense to pay it back aggressively as you may be repaying a loan... (More)

Hi George, I think the answer to your question largely depends on your circumstance. Firstly, depending on your monthly income and expenses, saving 3-6 months' expenses or salary, maybe too much or too little. Secondly, I think this also depends on the type of emergencies. For example, so many people have lost their jobs due to COVID-19. No one could have predicted that just a few months ago. In severe emergencies such as job losses, having a six-month cash buffer gives you time to get a new job without liquidating your investments. Imagine that you had only one month's salary... (More)