Is a £1000 Emergency Fund Enough?

What is it?

An emergency fund is a pot of money kept in an account that can be easily accessed should you need it in the case of an emergency. An emergency could be classed as anything to happen that is unexpected like car repairs, washing machine breaking down, emergency dental care, house repairs etc …

Although you can plan for some types of emergencies using sinking funds, you can’t plan for them all which is why an emergency fund is so important.

How Much is Enough?

An emergency fund, when built up big enough should be able to not only cover the above types of emergencies but also cover your income if you found yourself out of work. Generally, this is recommended by financial experts as being around 3 to 6 months’ worth of expenses. For example, if your expenses are £1500 per month, then you should have an emergency fund between £4500 to £9000 ready to access straight away (3 x £1500 = £4500 or 6 x £1500 = £9000).

£9000 seems a lot, doesn’t it? It would give you peace of mind though, I know it would for me.

According to Finder (2021), 9 % of people in Britain have no savings at all and 41 % wouldn’t be able to be out of work for even a month with no pay, another shocking reminder why savings and emergency funds are so important.

Should you Save an Emergency Fund before Paying off Debt?

Yes! Definitely!

You should save your emergency fund first before making those overpayments on your debt. Then when you have a minimum of £500 to £1000 you can start overpaying on debt. This will make sure that you’re covered for when those pesty emergencies happen and gives you peace of mind knowing when they do happen you don’t have to go further into debt to get the repairs fixed.

Starting to Build Your Emergency Fund

When you first start building an emergency fund, I found that starting small was the best way for me, so my first emergency fund was £500. The problem with an amount as low as £500 is if two emergencies happen at the same time well your pretty stuffed aren’t you?!

And I don’t know about you, but many things break at the same time for me! Last year my 11-month-old washer broke and I had a leak through my living room ceiling from the bathroom all within days of each other. The £500 only just covered the repairs for both and then a week later I had to pay for new tyres on the car which I was then forced to put on a credit card.

Life just happens this way doesn’t it? Well, it does if you don’t have an emergency fund.

Learning my lesson, I decided to follow Dave Ramsey’s advice and save an £1000 emergency fund which I kept in an instant access savings account connected to my current account so if I needed the money I could do an online transfer immediately.

Then life happened. My car goes in for an MOT and surprise surprise, it fails with the repairs costing a whopping £606. If I kept only £500 fund I wouldn’t have covered the costs. Luckily, I had my £1000 emergency fund and could pay in full with cash! Phew!

But then a few days after getting the car back, I was sitting in my living room waiting for my daughter to come out of the shower and I noticed a shiny spot on the wall. On closer inspection, I rubbed my hand across the wall and it was wet!! I rushed upstairs and after taking off the bath panel, to my horror the underneath of the bath had an inch of water in it! What an absolute nightmare. I soaked up the water and pondered getting a plumber out.

I had just under £400 left of my emergency fund so I decided to try and fix the problem myself first

I know what you’re thinking, I have zero plumbing skills but the last 3 plumbers I have used have either ripped me off, not completed the work they were paid for or done half a job, so I really don’t want to waste anymore money.

As I write this post, my bath panel is still off whilst I dry out the floor. I have sealed around the bath taps which were loose and could have been allowing water to seep through and I have put a small bowl under the pipes to catch any more of the water. It’s not flooding anymore but it’s also not fixed. But it will do for now.

Anyway, I digress.

Is £1000 enough for an emergency fund? I would say no it’s definitely not enough.  

Not wanting to disagree with Dave Ramsey and other financial gurus out there but what does £1000 really buy these days? With inflation running typically around 2 % (ONS, 2021) (Macrotrends, 2021) your money buys a lot less than it used to, so maybe an £1000 emergency fund is a little dated now?

I mean, it’s a pretty good place to start but my plan is now to save at least £1500 and then continue to contribute with £50 a month until it gets to 3 – 6 months’ worth of expenses. I will continue to do this until all my debt is repaid and when I’m debt free I will 100 % focus on building this up to at least 6 months of expenses. I know this will give me peace of mind then.


Finder (2021) Savings Statistics: Average Savings in the UK 2020.

Macrotrends (2021) UK Inflation Rate 1960-2021.

ONS.GOV.UK (Office for National Statistics) (2021) Consumer Price Inflation, UK July 2021.


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