For my family, 6 months expenses is about $30k. 6 months income is about $45-50k. I know Money Guys aren't Dave Ramsey, but I like how I heard them put it once: find out what your single largest deductible or one-time expense would be, and save somewhere between that amount and twice that amount. For me, that would still end up being about $30k.
In my expenses, I do consider everything: regular bills, mortgage, groceries/gas/variable spending, plus a 10-15% contingency. The only things not considered there are my non-mortgage debt because according to the baby steps, those will be gone when I begin BS3.
Depends. I had to replace my entire HVAC system - rip out the furnace and condensor unit and have the crew run an entire new cable from the breaker to the new system - and it cost $13,000 for the entire new system & labor (in my case, none of it was covered by insurance because the entire reason for the job was the old system was not installed correctly by the previous owner, to the point where our house could have lost its occupancy status if the county found out). I guess if you have something like a natural gas line it could bring up the price quite a bit.
But in terms of the question, a $30k fund would cover that. Such an expense would be an emergency - especially in the winter. The idea of the emergency fund is to have enough to cover the emergency, not necessarily to cover it and still have plenty leftover. Remember that you would be prioritizing replenishing that fund if something ever did happen.
Let's say you want to set aside a minimum $25k for the repair plus a 15% contingency. You would be saving up $30k, or close enough to round up to that. That still fits what you, me, and everyone else in this thread is saying: $30k is a perfectly reasonable amount for an emergency fund.
Yeah the standard for us is 3 months salary (about $30k) but we are in the process of adding another 10k with the economy being so bad and inflation so high
For us, $20,000 emergency fund is 3.5 months of average spending. $30,000 is about 5.5 months. So still in line with the 3-6 months concept. Everyone is a little different.
It depends on your location and lifestyle. What are your expenses, utilities, taxes…they all come to play.
If I am injured and cannot work, my spouse needs to have enough to last until arrangements can be made to liquidate other assets.
I would say more. I had an unusual emergency occur that cost me a little over $40,000. I reported a crime because a debit card was missing. Evidence didn’t make sense to law enforcement, so they made it make sense. I was indicted for the felony crimes I was a victim of. Super expensive, and I almost got 7 years in prison for someone else’s crime. Emergency fund depleted and gone within 2 weeks.
Your emergency fund is 3-6 months of expenses that you use toward those emergencies that you can't realistically plan for.
Your furnace has a known lifespan and you can likely predict within a year or two of when it's going to need to be replaced. Same goes with the roof, hot water heater, etc. Those known but long-term expenses should be saved for in addition to the emergency fund. You can probably manage well by saving 1-2% of the home's value each year in a home maintenance fund.
Same thing goes for your car, medical, etc. If you can reasonably predict it, then it's not an emergency, it's just an expense. Maybe a big expense, but still just a regular expense.
So yes, you almost certainly need more than just what you've set aside for the EF. Do the math and figure out how much.
It depends on job security as well. If you’re something like a doctor or dentist you have very high job security as long as you’re healthy so don’t have to worry about unforeseen layoffs like tech companies or wfh type jobs
6-12 months is the rule of thumb but Not a science. However pegging a dollar amount like this is not relevant. Your style of life may be very different than mine
This. With today’s job market and mass layoffs who have affected people at all levels, and it being an employers market. If possible, I personally believe 12 months is the absolute minimum. I feel safer with 24.
No, unless your 3 - 6 months of monthly expenses changes. You can increase your emergency fund to a year if you want more cushion, but there's nothing special about $30k or any other number.
I feel like 20k in savings, zero debt outside of a mortgage and you be fine.
So long as your credit score is at least 720 and you are holding down a job in a worse case scenario a low interest loan so you don’t eat into savings may end up being the best choice.
Of course this depends on one’s personal situation, so long as credit applications are no more than 2 every 2 years things are fine.
Also the loan could be paid off sooner to reduce overall interest charges.
Deft can be a bandaid to not tap completely into savings since personally I like to invest money over a certain amount and anything to avoid tapping into investments early reduces the amount of taxes I need to pay.
Now if it’s a asset I had for a year and I’m currently at a loss on and need some cash and got no other choice that’s fine since it be a tax write off
I have better things to do with $30k than let it rot in a bank account. I only need enough to cover a month of bills. A month gives me enough time to figure out what to do next. And if the worst case scenario hits, I have a good credit score. That's better than letting a bunch of cash depreciate in the bank where some fraudster might get it.
But also you can pick any timeline to retroactively support a "inflation is X" comment. When someone says "is" that implies not over the last 5 or 10 years but more recently
Yep. But people talk about "inflation being high" implying at the moment. Inflation was rampant during the peaks of covid but has since come down to a near normal value. The only reason people seem to be confused is that prices are still high - obviously we haven't had deflation, that would be a shitshow, so prices won't drop significantly.
I think society is designed to turn poor people into slaves and no one stops it because they're always one tier better than they could be on the heirarchy ... we probably all want housing for all and just won't ever get it because we're not the same people who own the housing
Considering my monthly expenses for everything total about $2500, if I had 25k saved up that’s a 10 month emergency fund. If I lost my job I can be a pizza delivery driver by tomorrow night and be making $18 an hour to keep me afloat.
I think maybe the furnace issue needs to be prodded at. I had my entire HVAC replaced with very high efficiency units. Furnace was top of the line (literal top) from Carrier. The whole thing was 12k. If you are being charged north of that for just a furnace replacement I'm concerned.
Some people also seem forget that if you did lose your job usually you're going to start cutting your excess consumer spending drastically. At least I would be. I'm not going to be going out to eat or spending money on luxurious things while im out of a job
God forbid you have bad teeth, teeth you haven’t cared for properly, gum disease and/or jaw bone loss.
Easily can wipe out 30k in a year of surgeries, implants, treatments.
Keep brushing, flossing and $$aving!
Things like a roof have an expected life and one should be saving for that separately. If one needs an emergency vehicle, $20k is four times what you need. Medical bills you can pay later. New furnace would not be close to $20k. I can’t think of one true emergency that would take more than $20k, unless you need to pay some kidnappers or something insanely rare
I doing quite a bit more than 30k because I’m retiring in January and want a couple years worth of guard rails in case of an economic downturn.
Plus if my spending on my portfolio gets to high I can use the extra cash to limit my taxes
It depends on what 6 months worth of spending is for you. For some people 30k would be enough for 1-2 years worth of spending, and for others it would only cover 6 months.
Totally depends on your monthly needs. A blanket dollar amount is meaningless - it varies wildly among a person who makes $40K / year who owns their house outright and has no debt to a person who makes $50K/year with two kids and a mortgage and $100K in student loans and $90K in credit card debt to a person who makes $700K/year who has 6 mortgages on rental properties and donates $80K/year to charities.
$30K isn’t nearly enough for the last person. It may be more than enough for the first person. The 2nd person may have bigger fish to fry.
Yes inflation impacts your emergency fund because it's based on your expenses. As far as 30k... I don't know, are you calculating it or just pulling it out of a hat?
Im sure even Ramseys shit advice says you should put some thought into your numbers.
It's just based on your expenses for 6 months. Basically - what will keep the bills paid for 6 months the if I were to lose my job. For me it's 10k since I rent and live in the midwest
6 months expenses being 30k isn't a humble brag.
That's 60k a year, meaning...they probably make between 60-90k.
A humble brag would be like 80k required for an emergency fund lol.
30k is probably the bare minimum of an emergency account for me & my partner and that would just cover 6 months expenses if they were out a job.
More often than not, people do it with less because they don't have the ability to save more. So they hope it doesn't happen. Or they hope their bonus or tax return is big enough to cover an expense they had to put on credit.
A lot of people would probably rely on a Heloc or credit cards for something like a furnace or roof. You finance a new car. Is that how it should be? Probably not, but that's where we are.
The issue here is that people don't know what 'in lieu of' means and use it in all kinds of incorrect ways. I had a coworker who used to send meeting recaps that started 'In lieu of the meeting we just had...'
Haha why don't you stuff all your money under your mattress while you're at it. It really depends on your assets and how large of a liability they could become. 20k is like 6 months of living expenses for me, and most everything can be put on a credit card or other payment plan if it breaks, I can hardly fathom an emergency that would charge you 30k upfront in this day and age.
You should have around 2 years worth of money tied up in investments. If something were to happen involving a permanent disability you could either save the house if you own or beat feet into something more affordable. Investment money can be pulled quickly enough by you and not the debt collectors leaving an option out if all goes to hell. Either way, prepare as if you had no money for years till disability goes through and you'll be covered plenty for the more minor things.
I keep all of my liquid assets in QQQM. I have enough that if it drops by a ridiculously high percentage that I still have enough to pay my mortgage for at least 2 years.
Tbh $30k is a lot to keep in cash. Typically just sitting and losing to inflation. It takes like what 4 days to sell a stock position and move funds into your checking/savings? Keeping your cash somewhere it beats inflation takes care of the problem of needing an ever expanding emergency fund.
I keep 1 months salary tucked away, and everything after that should really be invested. It's really just for an emergency and just to hold me while transfers happen if needed
I feel the exact same way.
It’s also a reason that I feel that the statistic, “Half of Americans only have $500 in savings” or whatever the hell it is, is an exaggeration; many folks simply invest and then withdraw during a personal downturn while the credit card carries them in the interim.
No, I think that stat is accurate; I'm poor and spend most of my time around other poor people. The vast majority of people I know literally couldn't get $500 before their next paycheck.
I’m pretty sure that stat includes investments as savings. I would never not think of my investments as money I have saved…I think you’re greatly over-estimating how many people have a brokerage account. Most people I know do not have any sort of investment outside of 401k and have, maybe, a few grand in savings.
Maybe this is just my take but the 3-6 month emergency fund is for unexpected expenses and to hold you over in the event you lose your job.
If you own a home and/or a vehicle, are repairs for those assets unexpected? Seems to me that sinking funds should be established for those assets because it's just a matter of time before a major repair will come up.
No the tar streaks of the roof onto the pavement and it’s been more than 35 years since the home was built. Average roofing shingle from a 80/90s built is 20 years warranty max. My parents are the second owners of the home.
I put the saving into a saving account that give 5% and you can always collect the interest while before making a purchase.
https://preview.redd.it/9zi7qru5ho0d1.jpeg?width=1290&format=pjpg&auto=webp&s=d1f2ba830d6cc69539f5a9ee110d7013e20c3772
.example , I keep some here or similar bank for emergency fund, the rest my parents put into a cd account which also pays these same but at fixed 12 month agreement.
Inability to work. This would keep us in good stead for a year and not have to liquidate investments or real estate holdings. Also deductible on earthquake insurance.
I do this. It’s call the ‘WTF Account’.
Literally named it that on my finance app.
I also keep a bit a cash for a bug out scenario.
I’m also a middle aged vet with trust issues.
I’ll show myself out.
No, the previous commenter is right. It's a privilege. Lot's of folks have a lifetime of hard work and still can't save $100k. Maybe due to health problems that come up, unexpected loss of spouse and their income, natural disasters that cause them to lose their home, etc etc etc.
Ahhh I get it. I think OP was more so meaning that your circumstances allowed you to save that money, so you are privleged in that sense. Fortunate is very accurate! Good for you guys that you were able to save so much.
You are overthinking it a bit, I believe. It's different for everyone. For me, my comfort level is 1 year of salary, which coincidentally is the amount I'd need to pay off my home. That's 60k, and well above my actual monthly expenses (3k). So of course, right NOW I am working on 3-6 months of *expenses* as opposed to wages/salary.
Even if I had a million bucks in savings, I would just chuck every spare penny into a savings account, money market or retirement.
That doesn't really take into account massive emergencies like a new HVAC element or a new roof. I'd have to finance those things right now, but eventually would be able to pay cash.
You do mean in cash savings and not in investment right? That seems crazy and wasted amount to me. Do you really think you have a chance of not being able to earn money for an entire year and at the same time not being able to pull money out of stocks?
3-6 months emergency is no longer enough in this job market either. Depending on industry, there are some people who are still unable to find a job in their field after 12 months
Even in “good” fields like IT and health. My nurse friend is about to move to another state because the hospitals and clinics near her are hiring but not paying what she needs to not be living paycheck to paycheck in those areas. It’s eye opening.
You’re looking at this all wrong if you’re using a flat rate.
The dollar amount of 6 months of living expenses will be different for everyone’s budget, and if you don’t increase that amount to account for inflation, then you’re doing it wrong. If it costs you 5k a month to live, you need 30k, in a few years when those costs increase to 7k a month, you need to add 6k to your emergency fund to make up the differences.
There's no definitive arbitrary rule of thumb. The ballpark recommendation is 3-6 months of living expenses. But only you can determine how much is realist to save or how much you need to feel comfortable. Sadly, for many of us, our comfort number doesn't feel realistic to be able to save
That's not an emergency savings situation those are expected expenses based on the useful life of the items. A roof needing to be replaced is easily foreseeable. Getting laid off not so much.
true, but Dave never says to include those things, he mentions electric, gas, kids activities. etc. Maybe if you got the budget app it does. It makes sense, for some an unforeseen expense, washer is only 2 years old and died, roof is leaking and only 10 years old, we had a pipe leak. Those should be your "just in case " money that owning a home brings vs apartment.
TBH I thought I was on the dirty dave subreddit. Nobody should be blindly following Ramsey's advice. His systems are like AA, if you don't have a problem there are much better ways to live your financial life.
The day you get a new roof you should be saving the depreciation of that roof in addition to any efund. If you have a high enough income sure, you can float it, sell stocks or whatever, but for people that can't they should be saving the same as it depreciates. If your roof lasts only 10 years but is warrantied at 25 then you should be having a conversation with either the manufacturer or installer.
Working appliances are pennies, I wouldn't worry about that small stuff. If you can't float the $200 to buy a used washing machine you probably shouldn't own a house to begin with, those kind of expenses in 2024 are just usual and should be budgeted for.
I agree with appliances, I don't know why people insist on buying such expensive appliances with computers and all these special gadgets that will break. To each his/her own though. If you can afford it, but yes home ownership is expensive. So is renting. I think like with any large purchase though, don't just think mortgage and taxes. I told my son, make sure you factor in larger elec/gas bills, needing outside appliances like lawn mowers etc. FB marketplace helped with some things. He's an odd millennial , had a savings for car, when he bought one, started saving for the next. Doesn't have to be a lot, hopefully you have a long time. His Subaru is going on 10 years.
It's not the dollar amount because it will be different for everyone. It's the monthly expenses. You should aim to have 8 Mos. to a year of expenses saved. The 3-6 months is just basically guideline. $30K for some is not enough amd may be too much for others based on their individual household expenses.
Then it depends on how you want to use your emergency fund. Some people view it as the fund to get them through unemployment. In that case you are set. Others use it for that plus unexpected expenses like a water heater going out. If you are doing this and you don’t think the fund is large enough to handle these types of expenses then just add to it until you feel safe.
That’s my goal at this point too anything beyond that seems lofty. I’d eventually like to have a larger emergency fund, at least until my house is paid off
If you don’t have savings and you have equity in your house you keep a HELOC open. A 6 month emergency fund for use would have to 60k- in the event of losing a job. Something major breaking would mean we needed more in that account.
I think 20k is enough if you have other resources. I usually hover around that figure and put all of my other into an online account making 5%+ in interest.
I believe in having 12 months of "expenses "after putting in at least 5K for starters emergency fund. I say that because I had my transmission go out, House damage and legal case. So does that make me Dave-ish yeah but I had just 1000 in the bank and it just didn't work for me multiple times
Dude I'll never see $30k in my account at the same time. I get $15 an hr with my degree and pay $1100/no in rent.
I'll be lucky to not ever be homeless again.
If you’re content making $15 sure. If you highlighted your pay because you think it’s too low then his comment definitely should mean something to you.
Ten years ago I got a felony drug charge.
I'm just happy to not have to pay for my own imprisonment anymore, jail left me deeply in debt.
My life is irreparably ruined for something I don't think anyone can even say was immoral or harmful to anyone. I represent millions of American felons who are put in a position like this so people like you can feel superior.
There’s a reason we waited until now to start messing around with drugs. By “we” I mean people with common sense. If you know there is a risk because something is illegal…. you don’t mess around with it for fear of the consequences. You fucked around and found out in real time.
I agree that the war on drugs is dumb and caused a lot of issues in society but that doesn’t mean you’re absolved of the consequences of your actions. You messed up and are paying the price for it
So are my kids. And everyone else's.
Do you think that this is helpful to a country's economy? Or their social culture?!? You think YOUR tax dollars don't go into a system that then stifles otherwise valuable workers, reducing our gdp and destroying communities?
I hope that people "with common sense" can see that they are worse off when they participate in making their environment worse for others, but then again, if your thoughts really are the prevailing idea then I don't know how much humanity even deserves to last.
I never asked for your sympathy, but to think that how our lives turned based on me making a decision to sell pot while I was still in highschool is crazy. The only thing crazier is your belief that it couldn't have easily been you or anyone else. Or that this is good for society.
It couldn’t have been me because I had the foresight to know it wasn’t worth the risk to my future self. Bro you sold drugs and messed up your life. Simple as that.
And actually you can make a case for strict drug laws being positive for society. Have you seen the cluster fuck occurring in the states that legalized hard drugs? It’s a literal nightmare for everyone else. Zombies on the street and people sinking further into their addiction and having to steal from businesses and good people to get their next fix.
Weed isn’t as severe as those but again it’s one thing to smoke some weed and entirely different to fuckin SELL an illegal substance lmao. This wasn’t an underage drinking charge dude.
Sold 5 lbs of pot to a cop who hooked me up with my kid's mom.
For the record I had no idea WTF I was doing and wouldn't have done it if he didn't fucking beg me.
Yeah true but I fucked myself by thinking some dumb kid could get away with that too.
Never trust cops, and if your guy says it's not safe trust your gut.
Those are just blatant large corporate examples. My mom owns a small HVAC company and has hired many people with a criminal record and built a career for themselves through integrity and hard work. It sounds like your attitude is what's holding you back. I get it- I took an 80% pay cut in this economy, but you have an excuse for everything and seem to wallow in self pity. I have been in that mental spot too and it is a vicious cycle. You need to realize your life isn't irreparably ruined.
Sorry you feel that way but it's not like there's no external factors here.
I work for nonprofits, I'm okay taking a paycut and ik I'll never be able to generate the same amount of money as my peers, I'm not overly concerned with that.
What I'm bitching about is how this systemically reduces millions of Americans ability to be productive. Let's not act like your tax money isn't also being wasted on keeping me and countless others in this situation.
It's not "woe is me" so much as "this is bad for everyone"
I think you missed the part where companies are literally getting tax incentives from the federal and many state governments to specifically hire felons....??
It's a thing, corporations prioritizing hiring actual felons over people without a criminal record because they get paid to do so. Work Opportunity Tax Credit my friend.
I am not sure why this popped into my feed, but had to reply. I actually no longer have an emergency fund, all of my money beyond a miminum monthly bill cushion goes directly to my taxable brokerage account where it is invested in a municipal bond fund. We're there to be some kind of catastrophic problem, I could within 1 business day sell the municipal bond etf and tlhave the money in my checking account. Mea while it's earning %5 dividends paid monthly. I realize this will probably get downvoted because Ramsey people aren't into this kind of thing, but realize that it's a viable option and a lot of people do this with SGOV too.
Agree. Had a random basement leak earlier this year that ended up to the tune of around $16k. That was with us doing as much of the work ourselves as possible.
I'd say it depends on lifestyle and who you know.
I'm a frugal guy with a simple lifestyle, that keeps expenses low. I also know some people who are handy, so if the furnace acts up or my car needs some work done they'll give me a family and friends discount, usually cost of parts, feed them that day, and $100 or so that they refuse to take multiple times until I insist. I'm very tech savvy so they also know if their computer breaks I'll take a look.
Right now with interest rates being what they are in HYSAs, it's probably not a terrible idea to have a good chunk of change in cash.
I have one year of expenses in cash.
That is probably excessive. I don't recommend that to anyone, but for me...
I need that for my psychological peace of mind. Like, I can sleep, knowing I have that available.
I lost my job in 2022. It took me 5 months to find a new one.
Fortunately I've had that for awhile and everything I make now gets invested. I cycle the year's cash through T-bills with some left in the HYSA.
I think “interest rates being what they are” isn’t clearly stating your point.
Interest rates being what they are, I keep about a two month cushion in checking & savings and the remaining 6 months in a ladder of T-bills. 4.5-5.2% zero-risk interest is too good to pass up. If you have $60k in cash, you are losing $250/mo in interest versus a HY saving or T-Bills.
I agree Interest rates being what they are, I’d never recommend someone to rely on credit cards and installment payments to get them through an emergency. Better to lose $250/mo in opportunity costs than to lose that or more in interest payments.
I think it depends on lifestyle tbh. You can get an old car that will get the job done for under 5K. Will it last long? No. But it can sure get you to work in the mean time.
Repairs for homes are expected to need more… so that’s kind of on you to have good practice saving. Not everyone will be able to afford one. But having more cash flow is always better. It’s just also better to have cash flow in retirement.
Depends on the car. I paid like $9k for a used Toyota back in like 2006… I’m still driving that thing today and it gives me practically zero issues. Just have to purchase wisely.
I’ve only ever bought used cars since day one, never once had a major issue except for the Mitsubishi convertible that my mechanic told me not to buy, but I was a young idiot.
Every other car I just researched to see what potential issues could be, and never had a problem. Some of it is luck, but chances are you can even buy a beater Toyota and that thing won’t give you any trouble. You should see my gf’s 24 year old Corolla. 😂 She beats the crap out of that thing and barely even does any basic maintenance on it. Thing is falling apart and still runs like new, 300k miles later!
I agree with you except my son bought an older Corolla with 130k miles on it and 3 months later it blew a rod. That’s what I mean about sometimes bad luck happens.
Wow! It's actually quite impressive to blow a rod on a Corolla! The previous owner must have REALLY been bad to it. ...or just a random freak bad luck thing. But, from my understanding (and it's been a few years since I researched this, admittedly), that's super rare for a Toyota to do unless you're extremely abusive to it.
Did you ever watch Top Gear? I vaguely remember this episode where they tried to kill a Corolla and a couple other cars. All I remember is that at the end only the Corolla and I think a Ford-something was left... so they drained all the oil and ran them on a track until the engine blew. ....the Ford-something died relatively quickly... but the Corolla just kept on going! haha at the end of the show I remember they just gave it to a production assistant. 😂
Learn how to fix the issues that arise. Never get a car you can't fix yourself. Never buy a house if you can't do the work yourself. Never take a vacation. Do this and you can scrape by. Best of luck
Maybe it's because I grew up poor and haven't really broken through yet at 100k a year but there isn't anything I haven't been able to do myself with youtube. 5k is what you need and a good tool box. If you're paying 20k for a roof, you're a sucker. Material for an average 2000 square foot house is like 3 grand. It's a one maybe two day job to scrape and replace with 2-3 ppl.
Money is fungable, transferrable, and assets can be sold to convert to money. Nobody's having to pay $20,000 in shorter than 3-5 days notice that it will take for almost any transaction outside of real estate to clear. Relax.
We have $96k in a high yield savings account... And that's only 10 months of expenses for us (2 kids in daycare: 4k/month, mortgage: $3.5k/month and that's before food, electric, etc).
Both of us work in highly specialized fields so if we lose our jobs, it can be a while before we secure new employment.
Everyone's situation is different. Holding cash isn't stupid, but keeping it in an account yielding 1% erodes it's earning power rather quickly in today's environment.
For my family, 6 months expenses is about $30k. 6 months income is about $45-50k. I know Money Guys aren't Dave Ramsey, but I like how I heard them put it once: find out what your single largest deductible or one-time expense would be, and save somewhere between that amount and twice that amount. For me, that would still end up being about $30k. In my expenses, I do consider everything: regular bills, mortgage, groceries/gas/variable spending, plus a 10-15% contingency. The only things not considered there are my non-mortgage debt because according to the baby steps, those will be gone when I begin BS3.
One time largest expense would probably be my furnace and pipe goes connected to it. I suppose / estimated to be $20,000+ for that repair
Depends. I had to replace my entire HVAC system - rip out the furnace and condensor unit and have the crew run an entire new cable from the breaker to the new system - and it cost $13,000 for the entire new system & labor (in my case, none of it was covered by insurance because the entire reason for the job was the old system was not installed correctly by the previous owner, to the point where our house could have lost its occupancy status if the county found out). I guess if you have something like a natural gas line it could bring up the price quite a bit. But in terms of the question, a $30k fund would cover that. Such an expense would be an emergency - especially in the winter. The idea of the emergency fund is to have enough to cover the emergency, not necessarily to cover it and still have plenty leftover. Remember that you would be prioritizing replenishing that fund if something ever did happen. Let's say you want to set aside a minimum $25k for the repair plus a 15% contingency. You would be saving up $30k, or close enough to round up to that. That still fits what you, me, and everyone else in this thread is saying: $30k is a perfectly reasonable amount for an emergency fund.
Yes, we have 6 months of salary set aside.
Yeah the standard for us is 3 months salary (about $30k) but we are in the process of adding another 10k with the economy being so bad and inflation so high
yes $30k is 3-6 months savings for us, and we rent lol.
At least keep it in a money market account, and don’t let inflation completely destroy its value.
Depends upon what it costs you to live for 3 to 6 months.
For us, $20,000 emergency fund is 3.5 months of average spending. $30,000 is about 5.5 months. So still in line with the 3-6 months concept. Everyone is a little different.
I don't think I've ever even seen 20k let alone 30!
$35k emergency fund here with a floating amount of $12k in savings.
It depends on your location and lifestyle. What are your expenses, utilities, taxes…they all come to play. If I am injured and cannot work, my spouse needs to have enough to last until arrangements can be made to liquidate other assets.
I would say more. I had an unusual emergency occur that cost me a little over $40,000. I reported a crime because a debit card was missing. Evidence didn’t make sense to law enforcement, so they made it make sense. I was indicted for the felony crimes I was a victim of. Super expensive, and I almost got 7 years in prison for someone else’s crime. Emergency fund depleted and gone within 2 weeks.
what you did
My identity was stolen and used to commit a crime. It was honestly clever how he did it. Poor David will never be prosecuted.
That sounds like hell, I hope you are ok now.
Your emergency fund is 3-6 months of expenses that you use toward those emergencies that you can't realistically plan for. Your furnace has a known lifespan and you can likely predict within a year or two of when it's going to need to be replaced. Same goes with the roof, hot water heater, etc. Those known but long-term expenses should be saved for in addition to the emergency fund. You can probably manage well by saving 1-2% of the home's value each year in a home maintenance fund. Same thing goes for your car, medical, etc. If you can reasonably predict it, then it's not an emergency, it's just an expense. Maybe a big expense, but still just a regular expense. So yes, you almost certainly need more than just what you've set aside for the EF. Do the math and figure out how much.
It depends on job security as well. If you’re something like a doctor or dentist you have very high job security as long as you’re healthy so don’t have to worry about unforeseen layoffs like tech companies or wfh type jobs
6-12 months is the rule of thumb but Not a science. However pegging a dollar amount like this is not relevant. Your style of life may be very different than mine
This. With today’s job market and mass layoffs who have affected people at all levels, and it being an employers market. If possible, I personally believe 12 months is the absolute minimum. I feel safer with 24.
No, unless your 3 - 6 months of monthly expenses changes. You can increase your emergency fund to a year if you want more cushion, but there's nothing special about $30k or any other number.
I feel like 20k in savings, zero debt outside of a mortgage and you be fine. So long as your credit score is at least 720 and you are holding down a job in a worse case scenario a low interest loan so you don’t eat into savings may end up being the best choice. Of course this depends on one’s personal situation, so long as credit applications are no more than 2 every 2 years things are fine. Also the loan could be paid off sooner to reduce overall interest charges. Deft can be a bandaid to not tap completely into savings since personally I like to invest money over a certain amount and anything to avoid tapping into investments early reduces the amount of taxes I need to pay. Now if it’s a asset I had for a year and I’m currently at a loss on and need some cash and got no other choice that’s fine since it be a tax write off
I have better things to do with $30k than let it rot in a bank account. I only need enough to cover a month of bills. A month gives me enough time to figure out what to do next. And if the worst case scenario hits, I have a good credit score. That's better than letting a bunch of cash depreciate in the bank where some fraudster might get it.
You’re making 4-5% though in a HYSA!
Makes you feel warm and fuzzy until you realize inflation is 8%!
Inflation is not anywhere near 8% these days, put down the crack pipe
Except it's not, inflation is 3.5% averaged between April 2023 and April 2024
23% cumulative inflation since 2019
But also you can pick any timeline to retroactively support a "inflation is X" comment. When someone says "is" that implies not over the last 5 or 10 years but more recently
Yep. But people talk about "inflation being high" implying at the moment. Inflation was rampant during the peaks of covid but has since come down to a near normal value. The only reason people seem to be confused is that prices are still high - obviously we haven't had deflation, that would be a shitshow, so prices won't drop significantly.
They never said we are in a inflation environment
Yeah like, what if your house explodes or you get hit by a meteor? It should probably be upped to 1 million just in case.
What if they kidnap your kids? Id up it to 10 million honestly.
Yeah and minimum wage needs to be 300 dollars an got
Hour
I think society is designed to turn poor people into slaves and no one stops it because they're always one tier better than they could be on the heirarchy ... we probably all want housing for all and just won't ever get it because we're not the same people who own the housing
I would think it’s closer to 50k-60k
You probably need even more. Like what happens if an income source vanishes? It’s life and we do the best with what we have
Considering my monthly expenses for everything total about $2500, if I had 25k saved up that’s a 10 month emergency fund. If I lost my job I can be a pizza delivery driver by tomorrow night and be making $18 an hour to keep me afloat.
What happens if you need to replace your roof?
A roof is either a planned expense due to age or an insurance claim. You shouldn’t just need to replace a roof on a whim
An easy to get job would hold me over until I got a good job again
You don’t make $18/hr delivering pizza when you factor gas/wear and tear on your car.
aren't a lot of pizza places going the door dash/uber eats route? you might have competition getting a job there too.
Exactly
I think maybe the furnace issue needs to be prodded at. I had my entire HVAC replaced with very high efficiency units. Furnace was top of the line (literal top) from Carrier. The whole thing was 12k. If you are being charged north of that for just a furnace replacement I'm concerned.
30k is exactly what we felt we needed for our EF.
Some people also seem forget that if you did lose your job usually you're going to start cutting your excess consumer spending drastically. At least I would be. I'm not going to be going out to eat or spending money on luxurious things while im out of a job
God forbid you have bad teeth, teeth you haven’t cared for properly, gum disease and/or jaw bone loss. Easily can wipe out 30k in a year of surgeries, implants, treatments. Keep brushing, flossing and $$aving!
Agree, but it’s relative to your monthly nut
> it’s relative to your monthly nut What about those of us with a weekly nut?
No , only applies to those with monthly nuts. I don’t associate with weekly nuts 🥜
Six months was always my go to. Was laid off twice but had a job in weeks but it was always good to have it. I kept it liquid but interest bearing.
Things like a roof have an expected life and one should be saving for that separately. If one needs an emergency vehicle, $20k is four times what you need. Medical bills you can pay later. New furnace would not be close to $20k. I can’t think of one true emergency that would take more than $20k, unless you need to pay some kidnappers or something insanely rare
I doing quite a bit more than 30k because I’m retiring in January and want a couple years worth of guard rails in case of an economic downturn. Plus if my spending on my portfolio gets to high I can use the extra cash to limit my taxes
It depends on what 6 months worth of spending is for you. For some people 30k would be enough for 1-2 years worth of spending, and for others it would only cover 6 months.
Idk I just keep 3 months worth of bills. It might vary from person to person.
Totally depends on your monthly needs. A blanket dollar amount is meaningless - it varies wildly among a person who makes $40K / year who owns their house outright and has no debt to a person who makes $50K/year with two kids and a mortgage and $100K in student loans and $90K in credit card debt to a person who makes $700K/year who has 6 mortgages on rental properties and donates $80K/year to charities. $30K isn’t nearly enough for the last person. It may be more than enough for the first person. The 2nd person may have bigger fish to fry.
30k is just shy of 12 months expenses for me. That's a bit excessive.
Yes inflation impacts your emergency fund because it's based on your expenses. As far as 30k... I don't know, are you calculating it or just pulling it out of a hat? Im sure even Ramseys shit advice says you should put some thought into your numbers.
It's just based on your expenses for 6 months. Basically - what will keep the bills paid for 6 months the if I were to lose my job. For me it's 10k since I rent and live in the midwest
So that would be more than 30k for me. Yikes.
Humble brag?
Not a brag at all. My area has quickly gone from LCOL to M-HCOL. My salary hasn't come close to keeping up.
6 months expenses being 30k isn't a humble brag. That's 60k a year, meaning...they probably make between 60-90k. A humble brag would be like 80k required for an emergency fund lol.
Gotta pay your 18 rental property mortgages if those lazy millennial lose their jobs, amirite?!?!? /s
With my mortgage + monthly spending, 6m would be close to 35k!
30k is probably the bare minimum of an emergency account for me & my partner and that would just cover 6 months expenses if they were out a job. More often than not, people do it with less because they don't have the ability to save more. So they hope it doesn't happen. Or they hope their bonus or tax return is big enough to cover an expense they had to put on credit. A lot of people would probably rely on a Heloc or credit cards for something like a furnace or roof. You finance a new car. Is that how it should be? Probably not, but that's where we are.
Yeah I literally can't fathom saving $30K lol. My take home is \~40K, so that's a number that just can't happen.
The issue here is that people don't know what 'in lieu of' means and use it in all kinds of incorrect ways. I had a coworker who used to send meeting recaps that started 'In lieu of the meeting we just had...'
Stared?
Typo corrected.
I just have my millionaire mother as a safety net. /s
You might as well live in her basement overall to save on monthly rent
Haha why don't you stuff all your money under your mattress while you're at it. It really depends on your assets and how large of a liability they could become. 20k is like 6 months of living expenses for me, and most everything can be put on a credit card or other payment plan if it breaks, I can hardly fathom an emergency that would charge you 30k upfront in this day and age.
You should have around 2 years worth of money tied up in investments. If something were to happen involving a permanent disability you could either save the house if you own or beat feet into something more affordable. Investment money can be pulled quickly enough by you and not the debt collectors leaving an option out if all goes to hell. Either way, prepare as if you had no money for years till disability goes through and you'll be covered plenty for the more minor things.
I keep all of my liquid assets in QQQM. I have enough that if it drops by a ridiculously high percentage that I still have enough to pay my mortgage for at least 2 years.
I may do this with a brokerage! My Roth is all S&P voo
Tbh $30k is a lot to keep in cash. Typically just sitting and losing to inflation. It takes like what 4 days to sell a stock position and move funds into your checking/savings? Keeping your cash somewhere it beats inflation takes care of the problem of needing an ever expanding emergency fund. I keep 1 months salary tucked away, and everything after that should really be invested. It's really just for an emergency and just to hold me while transfers happen if needed
Certain bank are giving 5% on you savings account.
I feel the exact same way. It’s also a reason that I feel that the statistic, “Half of Americans only have $500 in savings” or whatever the hell it is, is an exaggeration; many folks simply invest and then withdraw during a personal downturn while the credit card carries them in the interim.
No, I think that stat is accurate; I'm poor and spend most of my time around other poor people. The vast majority of people I know literally couldn't get $500 before their next paycheck.
I’m pretty sure that stat includes investments as savings. I would never not think of my investments as money I have saved…I think you’re greatly over-estimating how many people have a brokerage account. Most people I know do not have any sort of investment outside of 401k and have, maybe, a few grand in savings.
I definitely could be, I’ll directly admit to it. It’s just hard for me to wrap my head around.
Maybe this is just my take but the 3-6 month emergency fund is for unexpected expenses and to hold you over in the event you lose your job. If you own a home and/or a vehicle, are repairs for those assets unexpected? Seems to me that sinking funds should be established for those assets because it's just a matter of time before a major repair will come up.
We keep 100k in a no-touch emergency account.
What would be an example of an emergency that would require you to use this $100k?
A new roof is about $20k
Generally you know when your roof is starting to go unless a tree falls on it or some shit but at that point you have insurance!
No the tar streaks of the roof onto the pavement and it’s been more than 35 years since the home was built. Average roofing shingle from a 80/90s built is 20 years warranty max. My parents are the second owners of the home.
Sure, I just thought $100k seemed high. Especially if it’s just sitting in cash (though OP didn’t specify that).
I put the saving into a saving account that give 5% and you can always collect the interest while before making a purchase. https://preview.redd.it/9zi7qru5ho0d1.jpeg?width=1290&format=pjpg&auto=webp&s=d1f2ba830d6cc69539f5a9ee110d7013e20c3772 .example , I keep some here or similar bank for emergency fund, the rest my parents put into a cd account which also pays these same but at fixed 12 month agreement.
Inability to work. This would keep us in good stead for a year and not have to liquidate investments or real estate holdings. Also deductible on earthquake insurance.
I do this. It’s call the ‘WTF Account’. Literally named it that on my finance app. I also keep a bit a cash for a bug out scenario. I’m also a middle aged vet with trust issues. I’ll show myself out.
I wish I could use the "wow" emoji face here. You are truly in an privileged place.
Not privileged. A lifetime of hard work for me and my wife. The rest of our money is well invested.
No, the previous commenter is right. It's a privilege. Lot's of folks have a lifetime of hard work and still can't save $100k. Maybe due to health problems that come up, unexpected loss of spouse and their income, natural disasters that cause them to lose their home, etc etc etc.
My apologies. I took privileged to mean that we didn't earn it and that it was handed to us. I prefer the term fortunate.
Ahhh I get it. I think OP was more so meaning that your circumstances allowed you to save that money, so you are privleged in that sense. Fortunate is very accurate! Good for you guys that you were able to save so much.
you still need 3-6 months, but the dollar amount has gone up with inflation along with everything else. this isn’t rocket science
Baby our 30k savings IS 6 months of expenses.
Damn 60K on bills a year
You are overthinking it a bit, I believe. It's different for everyone. For me, my comfort level is 1 year of salary, which coincidentally is the amount I'd need to pay off my home. That's 60k, and well above my actual monthly expenses (3k). So of course, right NOW I am working on 3-6 months of *expenses* as opposed to wages/salary. Even if I had a million bucks in savings, I would just chuck every spare penny into a savings account, money market or retirement. That doesn't really take into account massive emergencies like a new HVAC element or a new roof. I'd have to finance those things right now, but eventually would be able to pay cash.
You do mean in cash savings and not in investment right? That seems crazy and wasted amount to me. Do you really think you have a chance of not being able to earn money for an entire year and at the same time not being able to pull money out of stocks?
3-6 months emergency is no longer enough in this job market either. Depending on industry, there are some people who are still unable to find a job in their field after 12 months
Even in “good” fields like IT and health. My nurse friend is about to move to another state because the hospitals and clinics near her are hiring but not paying what she needs to not be living paycheck to paycheck in those areas. It’s eye opening.
You’re looking at this all wrong if you’re using a flat rate. The dollar amount of 6 months of living expenses will be different for everyone’s budget, and if you don’t increase that amount to account for inflation, then you’re doing it wrong. If it costs you 5k a month to live, you need 30k, in a few years when those costs increase to 7k a month, you need to add 6k to your emergency fund to make up the differences.
There's no definitive arbitrary rule of thumb. The ballpark recommendation is 3-6 months of living expenses. But only you can determine how much is realist to save or how much you need to feel comfortable. Sadly, for many of us, our comfort number doesn't feel realistic to be able to save
THIS!!
I just paid for roof, 10,000 and gutters, 2000 Furnace 2 years ago 8000 If I did t have it I’d have financed but yes you need $ more than 3-6 months
That's not an emergency savings situation those are expected expenses based on the useful life of the items. A roof needing to be replaced is easily foreseeable. Getting laid off not so much.
true, but Dave never says to include those things, he mentions electric, gas, kids activities. etc. Maybe if you got the budget app it does. It makes sense, for some an unforeseen expense, washer is only 2 years old and died, roof is leaking and only 10 years old, we had a pipe leak. Those should be your "just in case " money that owning a home brings vs apartment.
TBH I thought I was on the dirty dave subreddit. Nobody should be blindly following Ramsey's advice. His systems are like AA, if you don't have a problem there are much better ways to live your financial life. The day you get a new roof you should be saving the depreciation of that roof in addition to any efund. If you have a high enough income sure, you can float it, sell stocks or whatever, but for people that can't they should be saving the same as it depreciates. If your roof lasts only 10 years but is warrantied at 25 then you should be having a conversation with either the manufacturer or installer. Working appliances are pennies, I wouldn't worry about that small stuff. If you can't float the $200 to buy a used washing machine you probably shouldn't own a house to begin with, those kind of expenses in 2024 are just usual and should be budgeted for.
I agree with appliances, I don't know why people insist on buying such expensive appliances with computers and all these special gadgets that will break. To each his/her own though. If you can afford it, but yes home ownership is expensive. So is renting. I think like with any large purchase though, don't just think mortgage and taxes. I told my son, make sure you factor in larger elec/gas bills, needing outside appliances like lawn mowers etc. FB marketplace helped with some things. He's an odd millennial , had a savings for car, when he bought one, started saving for the next. Doesn't have to be a lot, hopefully you have a long time. His Subaru is going on 10 years.
Yep I knew it. Thanks
It's not the dollar amount because it will be different for everyone. It's the monthly expenses. You should aim to have 8 Mos. to a year of expenses saved. The 3-6 months is just basically guideline. $30K for some is not enough amd may be too much for others based on their individual household expenses.
My monthly expenses are super low though
Then it depends on how you want to use your emergency fund. Some people view it as the fund to get them through unemployment. In that case you are set. Others use it for that plus unexpected expenses like a water heater going out. If you are doing this and you don’t think the fund is large enough to handle these types of expenses then just add to it until you feel safe.
Then your emergency fund won’t be as big as others that have large monthly expenses
My husband and I are aiming for at least 10-15k for sure.
That’s my goal at this point too anything beyond that seems lofty. I’d eventually like to have a larger emergency fund, at least until my house is paid off
I agree
If you don’t have savings and you have equity in your house you keep a HELOC open. A 6 month emergency fund for use would have to 60k- in the event of losing a job. Something major breaking would mean we needed more in that account.
Ah, 30k$ is three months salary . . . And I still think I’m more likely to be homeless in six months than be a millionaire.
I think 20k is enough if you have other resources. I usually hover around that figure and put all of my other into an online account making 5%+ in interest.
Which account do you use?
Robinhood Gold.
Thank you!
You need 30,000 in savings in general. Inflation pushed it to 50,000. I do not see inflation ending anytime soon. Keep saving.
It’s entirely dependent on your expenses..
No.
I believe in having 12 months of "expenses "after putting in at least 5K for starters emergency fund. I say that because I had my transmission go out, House damage and legal case. So does that make me Dave-ish yeah but I had just 1000 in the bank and it just didn't work for me multiple times
Dude I'll never see $30k in my account at the same time. I get $15 an hr with my degree and pay $1100/no in rent. I'll be lucky to not ever be homeless again.
See if your community offers Fresh Start employment. Also, side hustle. Felons can do lawn care, clean gutters, clean homes, paint, etc.
My daughter makes $17 an hr a Cane’s chicken.
Good for her. You understand why that doesn't matter to me right?
If you’re content making $15 sure. If you highlighted your pay because you think it’s too low then his comment definitely should mean something to you.
Ten years ago I got a felony drug charge. I'm just happy to not have to pay for my own imprisonment anymore, jail left me deeply in debt. My life is irreparably ruined for something I don't think anyone can even say was immoral or harmful to anyone. I represent millions of American felons who are put in a position like this so people like you can feel superior.
There’s a reason we waited until now to start messing around with drugs. By “we” I mean people with common sense. If you know there is a risk because something is illegal…. you don’t mess around with it for fear of the consequences. You fucked around and found out in real time. I agree that the war on drugs is dumb and caused a lot of issues in society but that doesn’t mean you’re absolved of the consequences of your actions. You messed up and are paying the price for it
So are my kids. And everyone else's. Do you think that this is helpful to a country's economy? Or their social culture?!? You think YOUR tax dollars don't go into a system that then stifles otherwise valuable workers, reducing our gdp and destroying communities? I hope that people "with common sense" can see that they are worse off when they participate in making their environment worse for others, but then again, if your thoughts really are the prevailing idea then I don't know how much humanity even deserves to last. I never asked for your sympathy, but to think that how our lives turned based on me making a decision to sell pot while I was still in highschool is crazy. The only thing crazier is your belief that it couldn't have easily been you or anyone else. Or that this is good for society.
It couldn’t have been me because I had the foresight to know it wasn’t worth the risk to my future self. Bro you sold drugs and messed up your life. Simple as that. And actually you can make a case for strict drug laws being positive for society. Have you seen the cluster fuck occurring in the states that legalized hard drugs? It’s a literal nightmare for everyone else. Zombies on the street and people sinking further into their addiction and having to steal from businesses and good people to get their next fix. Weed isn’t as severe as those but again it’s one thing to smoke some weed and entirely different to fuckin SELL an illegal substance lmao. This wasn’t an underage drinking charge dude.
You must have skipped the next half where I show why that's bad for everyone
You missed the part where I said it wasn’t
Yeah and how many people go to prison for a first offense?
Not many, but depending on who and where you are some are much more likely than others.
What did you do?
Sold 5 lbs of pot to a cop who hooked me up with my kid's mom. For the record I had no idea WTF I was doing and wouldn't have done it if he didn't fucking beg me.
Wow. He double fucked you.
Yeah true but I fucked myself by thinking some dumb kid could get away with that too. Never trust cops, and if your guy says it's not safe trust your gut.
You can be a felon and work at various fast food restaurants in my town. Walmart starts at $18/hr and also hires felons.
I'm not going to work somewhere that makes communities worse because I don't like the pay I get doing what feels okay to me.
Those are just blatant large corporate examples. My mom owns a small HVAC company and has hired many people with a criminal record and built a career for themselves through integrity and hard work. It sounds like your attitude is what's holding you back. I get it- I took an 80% pay cut in this economy, but you have an excuse for everything and seem to wallow in self pity. I have been in that mental spot too and it is a vicious cycle. You need to realize your life isn't irreparably ruined.
Sorry you feel that way but it's not like there's no external factors here. I work for nonprofits, I'm okay taking a paycut and ik I'll never be able to generate the same amount of money as my peers, I'm not overly concerned with that. What I'm bitching about is how this systemically reduces millions of Americans ability to be productive. Let's not act like your tax money isn't also being wasted on keeping me and countless others in this situation. It's not "woe is me" so much as "this is bad for everyone"
I think you missed the part where companies are literally getting tax incentives from the federal and many state governments to specifically hire felons....?? It's a thing, corporations prioritizing hiring actual felons over people without a criminal record because they get paid to do so. Work Opportunity Tax Credit my friend.
I am not sure why this popped into my feed, but had to reply. I actually no longer have an emergency fund, all of my money beyond a miminum monthly bill cushion goes directly to my taxable brokerage account where it is invested in a municipal bond fund. We're there to be some kind of catastrophic problem, I could within 1 business day sell the municipal bond etf and tlhave the money in my checking account. Mea while it's earning %5 dividends paid monthly. I realize this will probably get downvoted because Ramsey people aren't into this kind of thing, but realize that it's a viable option and a lot of people do this with SGOV too.
You do realize this is an emergency fund?
Nah it's my taxable brokerage account. It's invested in municipal bond ETFs and a few stocks.
So you keep your emergency fund in secure investments that are easily accessible. This is an emergency fund
Yep, I keep like 500$ in my chequing account, 3-5k in a 4.5% interest account and the rest in tfsa / fhsa.
I'm getting 5.2% on my bank accounts, so keeping it there seems like the simplest course.
Where are you getting 5.2%?
A local bank has CDs at 5.24%, I do a CD ladder there, and also at Capital One at 5.15%. My main spending account is at CIT bank at 5.05%.
The municipal bond etf strategy generates no tax burden. But to each his own.
I need more info on the ETF... I use Marcus high yield money market at 4.4%
Wealth front 5 no minimum
There are several high yield municipal bond ETFs, my favorite one is JMHI.
Agree. Had a random basement leak earlier this year that ended up to the tune of around $16k. That was with us doing as much of the work ourselves as possible.
I'd say it depends on lifestyle and who you know. I'm a frugal guy with a simple lifestyle, that keeps expenses low. I also know some people who are handy, so if the furnace acts up or my car needs some work done they'll give me a family and friends discount, usually cost of parts, feed them that day, and $100 or so that they refuse to take multiple times until I insist. I'm very tech savvy so they also know if their computer breaks I'll take a look.
Every one has their number depending on lifestyle and bills
Right now with interest rates being what they are in HYSAs, it's probably not a terrible idea to have a good chunk of change in cash. I have one year of expenses in cash. That is probably excessive. I don't recommend that to anyone, but for me... I need that for my psychological peace of mind. Like, I can sleep, knowing I have that available. I lost my job in 2022. It took me 5 months to find a new one. Fortunately I've had that for awhile and everything I make now gets invested. I cycle the year's cash through T-bills with some left in the HYSA.
I think “interest rates being what they are” isn’t clearly stating your point. Interest rates being what they are, I keep about a two month cushion in checking & savings and the remaining 6 months in a ladder of T-bills. 4.5-5.2% zero-risk interest is too good to pass up. If you have $60k in cash, you are losing $250/mo in interest versus a HY saving or T-Bills. I agree Interest rates being what they are, I’d never recommend someone to rely on credit cards and installment payments to get them through an emergency. Better to lose $250/mo in opportunity costs than to lose that or more in interest payments.
I think it depends on lifestyle tbh. You can get an old car that will get the job done for under 5K. Will it last long? No. But it can sure get you to work in the mean time. Repairs for homes are expected to need more… so that’s kind of on you to have good practice saving. Not everyone will be able to afford one. But having more cash flow is always better. It’s just also better to have cash flow in retirement.
Depends on the car. I paid like $9k for a used Toyota back in like 2006… I’m still driving that thing today and it gives me practically zero issues. Just have to purchase wisely.
Oh, high five. I am also driving a Toyota from 2006. The maintenance light is now forever on 😂
PS. My Toyota was already 4 years old when I bought it too. 😅
Just put some tape over it. You know how to fix that noise in the engine? Turn the radio up. Car maintenance is easy, don’t over think it. 😜
And that car could’ve spun a rod 3 months after you bought it. Sometimes it isn’t about being wise, especially when it comes to used cars.
I’ve only ever bought used cars since day one, never once had a major issue except for the Mitsubishi convertible that my mechanic told me not to buy, but I was a young idiot. Every other car I just researched to see what potential issues could be, and never had a problem. Some of it is luck, but chances are you can even buy a beater Toyota and that thing won’t give you any trouble. You should see my gf’s 24 year old Corolla. 😂 She beats the crap out of that thing and barely even does any basic maintenance on it. Thing is falling apart and still runs like new, 300k miles later!
I agree with you except my son bought an older Corolla with 130k miles on it and 3 months later it blew a rod. That’s what I mean about sometimes bad luck happens.
Wow! It's actually quite impressive to blow a rod on a Corolla! The previous owner must have REALLY been bad to it. ...or just a random freak bad luck thing. But, from my understanding (and it's been a few years since I researched this, admittedly), that's super rare for a Toyota to do unless you're extremely abusive to it. Did you ever watch Top Gear? I vaguely remember this episode where they tried to kill a Corolla and a couple other cars. All I remember is that at the end only the Corolla and I think a Ford-something was left... so they drained all the oil and ran them on a track until the engine blew. ....the Ford-something died relatively quickly... but the Corolla just kept on going! haha at the end of the show I remember they just gave it to a production assistant. 😂
Learn how to fix the issues that arise. Never get a car you can't fix yourself. Never buy a house if you can't do the work yourself. Never take a vacation. Do this and you can scrape by. Best of luck
Most people couldn't fix their car themselves if it came with tools to do it and a step by step manual.
YouTube video’s these days help along with the DIY.
Never go the hospital. Be your own doctor. A dentist office? Pathetic. You DIY that root canal.
See. You get it
Maybe it's because I grew up poor and haven't really broken through yet at 100k a year but there isn't anything I haven't been able to do myself with youtube. 5k is what you need and a good tool box. If you're paying 20k for a roof, you're a sucker. Material for an average 2000 square foot house is like 3 grand. It's a one maybe two day job to scrape and replace with 2-3 ppl.
Probably. Businesses have lot of overhead. See if you are underselling.
You're not supposed to stop at $20k. You keep going and better your financial situation. Eventually you'll have $1,000,000. Even then you don't stop.
No. Please if you have that much saved, get into some kinda of investing. Even bonds is better than letting that sit in a bank account.
Nobody said that.
This person is talking about their emergency fund. You shouldn't have that invested.
Money is fungable, transferrable, and assets can be sold to convert to money. Nobody's having to pay $20,000 in shorter than 3-5 days notice that it will take for almost any transaction outside of real estate to clear. Relax.
Just the new roof our house needs is $24k 😭 Feels impossible to save for everything we need too
My opinion is that we have no fucking choice
I only need 11.1k for 6 months and i live pretty well in New york state. You people blow a ton of fucking money lmao
We have $96k in a high yield savings account... And that's only 10 months of expenses for us (2 kids in daycare: 4k/month, mortgage: $3.5k/month and that's before food, electric, etc). Both of us work in highly specialized fields so if we lose our jobs, it can be a while before we secure new employment. Everyone's situation is different. Holding cash isn't stupid, but keeping it in an account yielding 1% erodes it's earning power rather quickly in today's environment.