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Message
re: Recommended emergency fund amount in months/years
Posted on 3/22/23 at 12:50 pm to meansonny
Posted on 3/22/23 at 12:50 pm to meansonny
quote:
We are banking liquid $50k.
10k in checking and $40k in savings.
We normally build up the savings and then go cash on an automobile. I will need a car (2007 Honda Accord with 218,000 miles). But I want to run this into the ground and skip a car buying cycle if possible.
I had to check to see if this was an old post of mine.
$40k in savings here, and a 2007 Accord with 287,000 miles
Regarding OP, are Roth IRA contributions considered a viable emergency fund? Say, if I instead had $10-20k in savings and plenty available via the Roth IRAs.
1
Posted on 3/22/23 at 12:52 pm to themasterpater
... that's....math?
6 months of living expenses if myself and my spouse both lost our jobs. We could stretch that to 12 months or more if just one of us lost our job.
Also, YNAB.com
6 months of living expenses if myself and my spouse both lost our jobs. We could stretch that to 12 months or more if just one of us lost our job.
Also, YNAB.com
Posted on 3/22/23 at 12:56 pm to WhiskeyThrottle
quote:
You ever make it just west of Fort Worth hit me up and we'll have a tall boy and a bourbon. My treat. I'm not driving east of Fort Worth. I hate going to Fort Worth as it is.
I’ve only been wester than Houston like once but I’ll let you know if I come out
quote:
Do you weld for a living
I wish baw. You can probably run a better bead than me
Posted on 3/22/23 at 12:57 pm to AllDayEveryDay
My head was up my butt apparently, I was interpreting it backwards for some reason.
Posted on 3/22/23 at 1:25 pm to themasterpater
I used to keep 6 months expenses in cash but now keep only about 2-3 months. If you have money in stocks outside of retirement accounts and/or money invested like ibonds, you can always get liquid if needed. It’s unlikely you’ll need 2 years of cash so why not make something on it? Invest it in a way you can sell if needed.
Posted on 3/22/23 at 1:39 pm to themasterpater
quote:
The job is a flaming piece of shite and scares me from a security standpoint (construction).
If I was in your situation, I’d probably be doing something very similar. If you have a significant amount of job insecurity, and the economy and your industry might be going into a downturn, I’d follow your roadmap.
Posted on 3/22/23 at 1:44 pm to Drizzt
quote:
It’s unlikely you’ll need 2 years of cash so why not make something on it? Invest it in a way you can sell if needed.
I see what you’re saying. But in the current interest rate environment, he can get 4-5% on his cash in a HY savings account, money fund like SWVXX or t-bills. I’m just saying that he can stay safe, liquid and get a really decent yield right now.
Posted on 3/22/23 at 1:56 pm to Jag_Warrior
I guess my 1000ft view is I'm 33. Not young, but not old. I don't want to put a chunk of money in the market, have the market tank, lose my job due to the economy, then need liquid reserves via selling investments or the house. I see holding 2 years in a liquid account for another year or so as not really affecting retirement at 65 by that much. I don't like keeping it all liquid with inflation running rampant, and clearly shouldn't hoard cash for decades either. Just feel a bit painted into a corner between the job, house, and economy. I could go back to school, but that'd drain the finances just as much.
Posted on 3/22/23 at 2:22 pm to themasterpater
The dedicated "emergency fund" is 6-months of annual expenses.
My 2008 learning was that we were not liquid enough and have since doubled that for all years to date.
Market aside, I think if keep emergency fund + enough cushion should you find yourself having to look for a new job (with enough cushion that you can be choosy /no back against the wall), along with any other life's obligations, then you are good. Optionality value (ie, peace of mind) offsets investment earning power) in this case IMO.
My 2008 learning was that we were not liquid enough and have since doubled that for all years to date.
Market aside, I think if keep emergency fund + enough cushion should you find yourself having to look for a new job (with enough cushion that you can be choosy /no back against the wall), along with any other life's obligations, then you are good. Optionality value (ie, peace of mind) offsets investment earning power) in this case IMO.
Posted on 3/22/23 at 2:41 pm to Turf Taint
We are both retired so short of an EMP, complete failure of the grid or total collapse of the dollar, we're OK. No debt, have land, tractor, garden, hunt plus we started hoarding 2 years ago (when the two Ga Senate seats went Dem.). Interesting reading all of the responses on this one. I worry for my kids but wife and I are in good shape.
Posted on 3/22/23 at 2:54 pm to Diamondawg
Yeah I don't know how long lasting this will be for my generation
Posted on 3/22/23 at 3:02 pm to meeple
quote:
Regarding OP, are Roth IRA contributions considered a viable emergency fund? Say, if I instead had $10-20k in savings and plenty available via the Roth IRAs.
Ultimately everything is an emergency fund.
Checking savings would be first.
HELOC, Credit Cards second.
IRAs, 401ks
The purpose of labeling a specific "emergency fund" is that you can triage/avoid opportunity costs.
Posted on 3/22/23 at 3:12 pm to meansonny
quote:
We are banking liquid $50k.
10k in checking and $40k in savings.
Same here.
Posted on 3/22/23 at 3:25 pm to themasterpater
My monthly burn is very predictable. If I lost my job, I could cut 33% of my monthly burn easily and immediately.
With that taken into account, I have 5-6 months cash available if income went to 0.
I don't really see a reason to have more than that.
With that taken into account, I have 5-6 months cash available if income went to 0.
I don't really see a reason to have more than that.
This post was edited on 3/22/23 at 3:26 pm
Posted on 3/22/23 at 3:46 pm to Jag_Warrior
I think a high yield account is perfect if he gets 5% but that would be my floor for return.
Posted on 3/22/23 at 4:46 pm to themasterpater
quote:
Yeah I don't know how long lasting this will be for my generation
I think the retirement thing is over for us unless you get lucky
The sad thing is we’re 2 early 30s dudes arguing on a message board when we should have kids and wives and stuff. But I think that’s even more stacked against us than retirement since like every chick wants to get divorced
Posted on 3/22/23 at 4:55 pm to el Gaucho
quote:
The sad thing is we’re 2 early 30s dudes arguing on a message board when we should have kids and wives and stuff. But I think that’s even more stacked against us than retirement since like every chick wants to get divorced
Now here is something we can agree on. I feel like a wife is riskier financial decision than anything else going on. I don't like 50/50 odds of losing half my shite. You're in the early 30s no wife and kids club too?
This post was edited on 3/22/23 at 4:57 pm
Posted on 3/22/23 at 5:00 pm to themasterpater
quote:
don't like 50/50 odds of losing half my shite.
More like 110%
All of what you have now and your future earnings too
I’ve kinda given up at this point I’m never gonna live in a trailer with some chick in my early 20s in the 1970s where we struggle together to be successful
Idk how to make it work I feel like chicks that are broke get tired of how I work all the time and rich chicks only want bums
Posted on 3/22/23 at 5:07 pm to themasterpater
Given your overall situation, I continue to agree with your approach. 
Posted on 3/22/23 at 6:11 pm to el Gaucho
quote:
I think the retirement thing is over for us unless you get lucky
I'm older than you but I couldn't disagree more.
Avoid credit card debt.
Pay in full instead of installments (home, auto, life insurance).
People continuously pay more for things than they should or need to.
The less interest I pay, the earlier I retire.
The more money I save on purchases, the easier it is to pay cash for cars or put a better down-payment on a house (which also gets me a lower interest rate).
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