One of the oft-repeated recommendations from various financial advisors and debt experts is that you should have at least 6 months of living expenses in savings.

It's also often repeated that the majority of Americans, especially younger ones, have minimal savings.

So I'm curious about the membership here...

Question:
Do you have at least 6 months of living expenses in savings?

Choices:
Yes
No, but I'm working towards it
No

 

Yep, but I'm in my 70's and have had decades to prepare and save for our comfortable retirement. That wasn't true till our mid 50's however.

Jim

It’s tough to keep a sizable savings for emergencies, especially when you are young and just starting out. But it’s worth it.

Unexpected spending happens so it’s best to plan for it.

quote:

Originally posted by Jimbo54:
Yep, but I'm in my 70's and have had decades to prepare and save for our comfortable retirement. That wasn't true till our mid 50's however.

Jim

I accomplished this in my mid 40’s once I paid my house off. I installed savings into my daughter by making her save half of what she made from a pre teen through grad school. She’s 30 and has a good nest egg saved and still saves (and gives) a good part of her income.

I’ve got about 5 years of expenses in savings. Been divorced for 12 years and have made preparations to retire at 58 (10 more years) since then with no intention of marrying again. So far everything has gone according to plan, and I’m well aware things can change at the drop of a hat.

Barring any disasters, I can make it until next Friday.

This something we started doing about 5 years ago. We just recently moved from California to North Carolina and payed cash for a house. This allows for a much smaller fund.

Yep. And it feels awesome to not have to worry about an unexpected financial burden.

We have 6 months in savings at our current standard of living. Meaning we could go on as usual if I lost my job. We could probably stretch that out to 12 months with some lifestyle changes.

quote:

Originally posted by SIG228:
Barring any disasters, I can make it until next Friday.

You may (or may not) have been kidding, but that's the reality for many folks. They're living paycheck to paycheck with little to no cushion or savings, and one unexpected financial hurdle (car wreck, moderate medical issue, layoff, etc.) is enough to ruin them.

It's not always lower income families either. I know plenty of "upper middle class" people who live paycheck to paycheck, are in debt up to their eyeballs due to living outside their means, and have little to no savings.

quote:

Originally posted by JohnV:
And it feels awesome to not have to worry about an unexpected financial burden.

Agreed.

My parents were not very good with money while I was growing up (but have improved significantly in the past couple decades). My ex-wife also had some poor money habits (mainly carryovers from her first marriage to one of the most financially idiotic people I've ever encountered). Thankfully, I've been able to learn from their mistakes.

Personally, I find that the peace of mind from financial stability and preparedness is better than any new car, big vacation, or fancy whatzit to hang on the wall.

I did until I got furloughed 6 months ago.

Thankfully I found a new job two months ago so I didn’t eat it all up but I’m not making enough to replace it right now.

When I do replace it, it will be with a years worth or more. I’d planned on the possibility of losing my job one day but I’d never planned on my entire industry (live events) just one day being completely non-existent. I’m extremely lucky I found something as jobs are very rare right now.

quote:

Originally posted by Pale Horse:
I did until I got furloughed 6 months ago.

Thankfully I found a new job two months ago so I didn’t eat it all up but I’m not making enough to replace it right now.

A job and 2 months of savings is better than a lot of alternatives.

Working towards it.
We're working on paying down some business debt & getting rid of a few 'luxury' items to lower our total monthly outflow.

One and one-half years' worth, in quickly accessible cash.
We are in our early 50s.

"Personally, I find that the peace of mind from financial stability and preparedness is better than any new car, big vacation, or fancy whatzit to hang on the wall."[/QUOTE]

No truer words than these. I sure don't miss the sleepless nights worrying about bills and lack of savings.

Jim

single income household -- you bet your a$$ I do




as mentioned previously -- it helps me sleep well at night


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There are two ways of achieving this:

1) Save a skidload.

2) Reduce your monthly burn rate.

Actually there are three. The third way is to do both of the above.

The method I use, sometimes referred to as the "Pay Yourself First" method, worked well for me.

Set aside X amount/percent from each paycheck to be moved directly into savings. (10% or more is generally recommended.) I have mine set up to automatically transfer. Then work your monthly budget around what is left after the savings portion is taken out.

Then sit back, and watch your emergency fund grow each payday.

Yes, I’m 50.

The only thing we owe on is the house and it will be paid off in three years.

Today, I actually do have this. If you had asked me in late March, I would have said I had quite a few months, but not quite 6 months.

One thing that helped, from mid March until the 1st week in May, we spent almost no money. I still made my mortgage payment and car payments, but we spent no money on leisure activities, even take out.

Staying home every single day for 6-7 weeks and doing nothing (a tank of gas lasted me 5 weeks) really helps build the savings account.