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#4555263 - 10/26/17 03:37 PM Is 3-6 months savings for emergencies realistic?
ZZman Offline


Registered: 03/17/08
Posts: 5786
Loc: Michigan
Experts will tell you to have 3-6 months savings to help cover unforseen emergencies. Many if not most people live paycheck to paycheck. Is it realistic?
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#4555267 - 10/26/17 03:43 PM Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman]
Chris142 Offline


Registered: 06/05/03
Posts: 16820
Loc: Deplorable in apple valley, ca
Sounds like a worst case. I like to keep a months worth of money available in case I lost my job. In the past I never had any trouble finding a new job.
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#4555269 - 10/26/17 03:48 PM Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman]
fenixguy Offline


Registered: 02/08/17
Posts: 307
Loc: NC
I just looked at the savings accounts and that, along with the cash I have in various special places, I have the equivalent of about 3-4 months income. My wife is a student I have an okay salary... not wealthy by any stretch (but no kids, which helps). So yeah, it's doable but you have to know where to sacrifice. Everyone's situation is different though.
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#4555274 - 10/26/17 03:52 PM Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman]
Quattro Pete Offline


Registered: 10/30/02
Posts: 35863
Loc: Great Lakes
Originally Posted By: ZZman
Experts will tell you to have 3-6 months savings to help cover unforseen emergencies. Many if not most people live paycheck to paycheck. Is it realistic?

I think it really depends on your income level. If you're making minimum wage that barely lets you make ends meet, then I don't see how you can possibly come up with 3-6 months savings. But if you're making a decent amount and putting away a good percentage of your income into savings, then 3-6 months should not be too hard to put away.
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#4555289 - 10/26/17 04:03 PM Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman]
Reddy45 Offline


Registered: 08/15/08
Posts: 2968
Loc: USA
Another thing to factor into emergency savings.. does early withdrawal of retirement accounts count towards your funds?

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#4555307 - 10/26/17 04:14 PM Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman]
emmett442 Offline


Registered: 12/07/16
Posts: 177
Loc: Wisconsin
Without making any adjustments, my wife and I could live 22 months on what's in our checking/savings accounts. We didn't strive to save that much, it's just a result of our simple lifestyles.

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#4555308 - 10/26/17 04:16 PM Re: Is 3-6 months savings for emergencies realistic? [Re: Reddy45]
ZZman Offline


Registered: 03/17/08
Posts: 5786
Loc: Michigan
Originally Posted By: Reddy45
Another thing to factor into emergency savings.. does early withdrawal of retirement accounts count towards your funds?


I would say no as those are meant not to be touched.
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#4555310 - 10/26/17 04:20 PM Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman]
ZZman Offline


Registered: 03/17/08
Posts: 5786
Loc: Michigan
In our case we just never seemed to be able to save before something like a car repair or medical bill or something hit us.
I would say we lived an average lifestyle. Around 75-80,000 combined income, 100,000 house, used cars, no expensive vacations, no expensive nights out or restaurants, no expensive toys or clothes etc. The money just never seemed to be there.... frown
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#4555327 - 10/26/17 04:41 PM Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman]
Kuato Offline


Registered: 10/23/05
Posts: 7094
Loc: Colorado
It can be tough to save; if someone is paycheck to paycheck they might need to make a lifestyle change to make it happen.

One thing that bothers me, I know some people that complain they don't have any money, yet they smoke two packs of cigarettes a day which is about $300 a month - for each of them.

I suppose it is a matter of priorities - One has to decide that it is more important to save than to buy something else. I am as guilty as the next person, it took me a long time to get out of paycheck to paycheck living.
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#4555329 - 10/26/17 04:43 PM Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman]
raytseng Offline


Registered: 12/11/08
Posts: 2339
Loc: CA
the advice is still good, but the point of the advice isnt for the people who are currently still in paychecktopaycheck at the moment.

The advice is for if or when they crawl out of the dire straights either by effort or by a windfall they dont fall back down. say a relative dies and they get 10,000 in inheritence what do they do.

if all your life you are used to paycheck to paycheck, and suddenly 2months ahead you may think you made it and start reaping the fruits of that money then.

the crude advice here is not to go splurging through that emergency fund.

There are a lot of people who are financially illiterate . i remember a huge part of the suze orman show is callers calling in asking basically for permission to buy or spend money on something.
it went both ways. Many clearly shouldnt afford it and deserved the lecture. while others had lots of savings and could treat themselves and just needed the go-ahead .



Edited by raytseng (10/26/17 04:46 PM)

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#4555343 - 10/26/17 05:01 PM Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman]
Astro14 Offline


Registered: 10/10/10
Posts: 8536
Loc: Virginia Beach
It's realistic if you're on track for retirement savings.

If you don't have it, and you're living paycheck to paycheck, dial back your spending so that you can put away 3 - 6 months of savings. You need that cushion for unexpected events. It's part of a complete financial plan.

What's with your sudden obsession over income, savings, and retirement?

You're starting a lot of threads asking basic questions. You should seriously consider getting a financial advisor. This is precisely the kind of thing for them to guide you through.

If you're just discovering that you should have 3-6 months of savings, and that you should be putting away 15% of your salary for retirement, and all the other basic elements of financial planning, then instead of polling a site focused on oil, get real, professional advice.


Edited by Astro14 (10/26/17 05:04 PM)
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#4555348 - 10/26/17 05:06 PM Re: Is 3-6 months savings for emergencies realistic? [Re: Astro14]
ZZman Offline


Registered: 03/17/08
Posts: 5786
Loc: Michigan
Originally Posted By: Astro14
It's realistic if you're on track for retirement savings.

If you don't have it, and you're living paycheck to paycheck, dial back your spending so that you can put away 3 - 6 months of savings. You need that cushion for unexpected events. It's part of a complete financial plan.

What's with your sudden obsession over income, savings, and retirement?

You're starting a lot of threads asking basic questions. You should seriously consider getting a financial advisor. This is precisely the kind of thing for them to guide you through.

If you're just discovering that you should have 3-6 months of savings, and that you should be putting away 15% of your salary for retirement, and all the other basic elements of financial planning, then instead of polling a site focused on oil, get real, professional advice.


It is to get people talking and to see what people think and what they do.

And this was posted in the General/Off Topic area.... smile


Edited by ZZman (10/26/17 05:07 PM)
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#4555369 - 10/26/17 05:35 PM Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman]
Wolf359 Offline


Registered: 04/27/12
Posts: 4753
Loc: MA
There are probably better forums out there for this. I'm not on them, but places like bogleheads.org gets mentioned a lot as a good one.

What I do probably has no bearing on your situation. I never bothered to have 3-6 months in savings. If I ever needed it, I could always liquidate some of my mutual funds for whatever cash I needed. I always have a few thousand in my checking account and move it over to purchase more funds whenever it gets too high. Usually you can get funds from a sale of a fund within a week. Worse case is that I could always throw it on a credit card for the short term until the funds came in.

Basically on those other forums, you basically post your budget and what happens is that people end up ripping through it. Usually they find that people are spending too much on their phone/cable/car/eating out etc.

When I started out, I made automatic monthly investments in various mutual funds. And that was after maxing out 401 and IRA. When I got a raise, I increased my savings, now I'm well over my target for retirement, I suppose I should retire earlier.

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#4555374 - 10/26/17 05:39 PM Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman]
StevieC Offline


Registered: 08/21/08
Posts: 17116
Loc: Ontario, Canada
I keep all my money invested but have a HELOC on my house with a $0 balance but with a large limit. I will use that if I need to. Failing that I can cash in investments if I needed to but I would rather not when they are earning great rates of return and the interest rate on the HELOC is stupidly low. I think right now it's at 3% with only the interest being due each month.



Edited by StevieC (10/26/17 05:39 PM)
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#4555378 - 10/26/17 05:44 PM Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman]
dbias Offline


Registered: 12/24/14
Posts: 136
Loc: USA
6 months was what i had on hand when i was off work for 9 months shocked2
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