Money Lesson Couple

How much does a household need?

Every rule of thumb tells you to keep six or twelve months of your spending in cash, and none of them asks how many of you are earning.

When one salary stops and the other does not, what the household is short of is the gap, so what does sizing the buffer on the bigger number cost?

Employment Property Expenses Savings Account ISA Investments

Size it on what you would lose

1 Goal · 1 What-If

Hold nine months of the gap the lost salary would leave, and invest everything else.

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Employment Property Expenses Savings Account ISA Investments

Size it on what you spend

1 Goal · 1 What-If

Hold a year of the household's whole spending in cash, the way the rule of thumb says.

Try this plan

Size it on what you would lose Size it on what you spend

Sizing the buffer on the income they would actually lose, rather than on everything they spend, leaves this couple ~£134.4k better off.