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emergency fund how much and what are you doing?

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    #31
    Originally posted by LivingAlmostLarge View Post
    it probably also depends if people were prepared for this recession.
    Presumably anyone who hasn't lost their job but is in a weak position must be building up at least some savings while they can...right? I hope....?
    "Praestantia per minutus" ... "Acta non verba"

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      #32
      Originally posted by kork13 View Post

      Presumably anyone who hasn't lost their job but is in a weak position must be building up at least some savings while they can...right? I hope....?
      I wouldn't bet on it.
      Steve

      * Despite the high cost of living, it remains very popular.
      * Why should I pay for my daughter's education when she already knows everything?
      * There are no shortcuts to anywhere worth going.

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        #33
        Originally posted by kork13 View Post

        Presumably anyone who hasn't lost their job but is in a weak position must be building up at least some savings while they can...right? I hope....?
        The only slight silver lining for those folks is that most people are finding their spending is down a lot since stores and restaurants are closed and they can't go out and do their normal activities and spending. If they're smart, they'd be setting aside some of that reduced spending as an EF, but I doubt it.
        Steve

        * Despite the high cost of living, it remains very popular.
        * Why should I pay for my daughter's education when she already knows everything?
        * There are no shortcuts to anywhere worth going.

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          #34
          Last year, when the Federal govt shut down for 33 days, people panicked. Remember they were talks of homelessness after *one* missed check?

          I just don't get people. We've had many many warning signs and if you had a year to prepare after seeing Federal workers' struggles, why would you not get an EF in place? Even a fund that covers a month's expense is SOMETHING. What will it take Americans to realize that DEBT is DUMB?

          I had a co-worker tell me that most Americans are actually poor and that credit makes them feel / look rich! It is true. I can even bet that when they get the stimulus most of us would have spent it in a few days on NONSENSE, then complain we got evicted / car got repo-ed etc.

          Personally, this has motivated me to get a year's worth, and, eventually an 18 month EF in place - DH is older, not a good interviewer (even during the bull markets / good times), so we need to prepare for contingencies, to make sure we'll be ok until "this" passes. Baby steps, baby steps, baby steps.
          Last edited by Scallywag; 04-02-2020, 09:33 AM.

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            #35
            Originally posted by Scallywag View Post
            I just don't get people. We've had many many warning signs and if you had a year to prepare after seeing Federal workers' struggles, why would you not get an EF in place? Even a fund that covers a month's expense is SOMETHING. What will it take Americans to realize that DEBT is DUMB?
            Nobody will change due to external events. "It won't happen to me" is the prevailing mindset. Until people hit bottom, and often not even then, they aren't motivated to change. And people are very quick to point fingers and blame everyone but themselves for their problems. It's the government or their employer or their spouse or their parents or their kids or whoever. It's never their fault. If you feel things aren't your fault, you've got no incentive to change your behavior.
            Steve

            * Despite the high cost of living, it remains very popular.
            * Why should I pay for my daughter's education when she already knows everything?
            * There are no shortcuts to anywhere worth going.

            Comment


              #36
              Originally posted by Scallywag View Post
              I had a co-worker tell me that most Americans are actually poor and that credit makes them feel / look rich! It is true.
              This observation is incredibly accurate. Debt allows businesses, families, and individuals to all appear to be much larger & more wealthy than they really are. That's why they do it! Being the big man on the block imbues influence & clout. It allows a family with $20k to buy a house worth $400k. A business with $100k to build a $2M factory. The ROI is incredible, as long as you're able to service the debt. When that becomes impossible.... the house of cards tumbles.
              "Praestantia per minutus" ... "Acta non verba"

              Comment


                #37
                Originally posted by kork13 View Post
                This observation is incredibly accurate. Debt allows businesses, families, and individuals to all appear to be much larger & more wealthy than they really are. That's why they do it! Being the big man on the block imbues influence & clout. It allows a family with $20k to buy a house worth $400k. A business with $100k to build a $2M factory. The ROI is incredible, as long as you're able to service the debt. When that becomes impossible.... the house of cards tumbles.
                Exactly what I said earlier. It works, until it doesn't. We saw it with the 2008 housing crash and we're about to see it again with everything - mortgages, car loans, student loans, credit cards, etc.

                I'm actually planning to buy a car this year. I suspect there will be a great supply of used cars as people break leases and trade in cars they can no longer afford so I'm going to wait a few months.
                Steve

                * Despite the high cost of living, it remains very popular.
                * Why should I pay for my daughter's education when she already knows everything?
                * There are no shortcuts to anywhere worth going.

                Comment


                  #38
                  I am sort of hoping for a break on buying a used car. I wonder if I can convince DH to buy a tesla for himself? I can't get over the cost how much more than a used gas powered car. I mean yes $40k for the base Model 3 but we'd want the long range and it would cost say $55k. Versus say $20k for a gas powered car. That's a lot of $$$ difference that when we drive $1500/gas a year will take a lot of years. Yes maintenance but still $35k is a lot of money to make up. Now if I were to get a used one at a discount....

                  No I am also hoping that RE takes a hit and I can buy a more expensive house at a deal. If not then we'll focus on just saving.

                  I don't think people are saving they way they should. I see it way to often people just going month to month and trying to figure out how to make it.
                  LivingAlmostLarge Blog

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                    #39
                    I am hoping for an RE slump, too, so that I can buy a home where I currently rent (impossible now). But banks cleaned up their acts after the housing bust of 2008 PLUS I live in a very high income "professional area" (doctors, lawyers, accountants, college professors, tradesmen etc) so I doubt we'll see a crash in my particular town. But even it happens a town or even a county away, I'm hoping to get in. Stashing cash and hoping to become a home owner soon.... We'll see.

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                      #40
                      Lots live pay check to pay check, making it difficult to put money aside. This article says near 80%.
                      Sources suggest several months salary, but that isn't realistic for a lot of people.
                      I would suggest as much as you can, at least $20 per pay check, hopefully more.
                      And only touch it if absolutely necessary, as in a true emergency.
                      goodcheddar.com

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                        #41
                        I think that the size of your emergency fund should vary depending on your lifestyle, monthly costs, income, and dependents, the rule of thumb is to put away at least three to six months' worth of expenses.

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                          #42
                          Originally posted by LivingAlmostLarge View Post
                          Things are different and we are getting older. We're 40 and we have a bigger nest egg. But at the same time we have a lot bigger bills than 10 years ago. I noticed my DH is quickly getting more fiscally conservative. He's actually mentioned that maybe we should have 1-2 years of cash just in case. Before he was very aggressively into investing our money. Now he it seems that he doens't want to pull money out of the market. He has been very happy with an overly large EF. Right now we sit at about 2 years of expenses in cash.

                          But I would love to be ready to dump a year into the market. But how is everyone else looking at their EF? Are you increasing it? Investing it? Putting more away
                          My situtation is likely different, we're looking to build a cash cushion to cover SORR as we contemplate ER. That being said personal finance is personal and while a 3-6 month emergency fund is appropriate for most, it's worth a conversation as to why he's focused on building a longer-term cash cushion. Once you agree on an appropriate number, the remainder is cash in search of an investment opportunity.

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                            #43
                            We like to have a 6 month emergency fund.

                            We’re going to drop to only 3 months for a short period of time (less than 6 months) to pay for some big expenses and even that gives us some anxiety.

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                              #44
                              I had no savings last year. I was focused on debt payoff & very slowly started to build my savings. This year I can focus on savings now that all my debt has been paid off. Next year I want to start paying extra on my mortgage. I could pay it off in a
                              matter of a few years with no debt. If I don’t end up selling.

                              Comment


                                #45
                                Originally posted by terri77 View Post
                                I had no savings last year. I was focused on debt payoff & very slowly started to build my savings. This year I can focus on savings now that all my debt has been paid off. Next year I want to start paying extra on my mortgage. I could pay it off in a
                                matter of a few years with no debt. If I don’t end up selling.
                                Congratulations on paying off your debt.

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