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Is 3-6 months savings for emergencies realistic? #4555263
10/26/17 03:37 PM
10/26/17 03:37 PM
Joined: Mar 2008
Posts: 5,943
Michigan
ZZman Offline OP
ZZman  Offline OP
Joined: Mar 2008
Posts: 5,943
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?


2003 Mercury Grand Marquis. Rotella T6 Multi-Vehicle oil
2008 Sebring Hardtop convertible. Rotella T6 Multi-Vehicle oil
2006 Kawasaki Vulcan 900 LT. Amsoil Metric 10w-40
Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman] #4555267
10/26/17 03:43 PM
10/26/17 03:43 PM
Joined: Jun 2003
Posts: 17,363
Deplorable in apple valley, ca
Chris142 Offline
Chris142  Offline
Joined: Jun 2003
Posts: 17,363
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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Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman] #4555269
10/26/17 03:48 PM
10/26/17 03:48 PM
Joined: Feb 2017
Posts: 314
NC
fenixguy Offline
fenixguy  Offline
Joined: Feb 2017
Posts: 314
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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Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman] #4555274
10/26/17 03:52 PM
10/26/17 03:52 PM
Joined: Oct 2002
Posts: 36,304
Great Lakes
Quattro Pete Offline
Quattro Pete  Offline
Joined: Oct 2002
Posts: 36,304
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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Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman] #4555289
10/26/17 04:03 PM
10/26/17 04:03 PM
Joined: Aug 2008
Posts: 3,167
USA
Reddy45 Offline
Reddy45  Offline
Joined: Aug 2008
Posts: 3,167
USA
Another thing to factor into emergency savings.. does early withdrawal of retirement accounts count towards your funds?

Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman] #4555307
10/26/17 04:14 PM
10/26/17 04:14 PM
Joined: Dec 2016
Posts: 189
Wisconsin
emmett442 Offline
emmett442  Offline
Joined: Dec 2016
Posts: 189
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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Re: Is 3-6 months savings for emergencies realistic? [Re: Reddy45] #4555308
10/26/17 04:16 PM
10/26/17 04:16 PM
Joined: Mar 2008
Posts: 5,943
Michigan
ZZman Offline OP
ZZman  Offline OP
Joined: Mar 2008
Posts: 5,943
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.


2003 Mercury Grand Marquis. Rotella T6 Multi-Vehicle oil
2008 Sebring Hardtop convertible. Rotella T6 Multi-Vehicle oil
2006 Kawasaki Vulcan 900 LT. Amsoil Metric 10w-40
Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman] #4555310
10/26/17 04:20 PM
10/26/17 04:20 PM
Joined: Mar 2008
Posts: 5,943
Michigan
ZZman Offline OP
ZZman  Offline OP
Joined: Mar 2008
Posts: 5,943
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


2003 Mercury Grand Marquis. Rotella T6 Multi-Vehicle oil
2008 Sebring Hardtop convertible. Rotella T6 Multi-Vehicle oil
2006 Kawasaki Vulcan 900 LT. Amsoil Metric 10w-40
Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman] #4555327
10/26/17 04:41 PM
10/26/17 04:41 PM
Joined: Oct 2005
Posts: 7,094
Colorado
Kuato Offline
Kuato  Offline
Joined: Oct 2005
Posts: 7,094
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.


Thick vs Thin test: 15k / 43k miles complete
Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman] #4555329
10/26/17 04:43 PM
10/26/17 04:43 PM
Joined: Dec 2008
Posts: 2,407
CA
raytseng Offline
raytseng  Offline
Joined: Dec 2008
Posts: 2,407
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 .


Last edited by raytseng; 10/26/17 04:46 PM.
Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman] #4555343
10/26/17 05:01 PM
10/26/17 05:01 PM
Joined: Oct 2010
Posts: 8,809
Virginia Beach
Astro14 Offline
Astro14  Offline
Joined: Oct 2010
Posts: 8,809
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.

Last edited by Astro14; 10/26/17 05:04 PM.

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Re: Is 3-6 months savings for emergencies realistic? [Re: Astro14] #4555348
10/26/17 05:06 PM
10/26/17 05:06 PM
Joined: Mar 2008
Posts: 5,943
Michigan
ZZman Offline OP
ZZman  Offline OP
Joined: Mar 2008
Posts: 5,943
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

Last edited by ZZman; 10/26/17 05:07 PM.

2003 Mercury Grand Marquis. Rotella T6 Multi-Vehicle oil
2008 Sebring Hardtop convertible. Rotella T6 Multi-Vehicle oil
2006 Kawasaki Vulcan 900 LT. Amsoil Metric 10w-40
Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman] #4555369
10/26/17 05:35 PM
10/26/17 05:35 PM
Joined: Apr 2012
Posts: 5,160
MA
Wolf359 Offline
Wolf359  Offline
Joined: Apr 2012
Posts: 5,160
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.

Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman] #4555374
10/26/17 05:39 PM
10/26/17 05:39 PM
Joined: Aug 2008
Posts: 18,619
Ontario, Canada
StevieC Offline
StevieC  Offline
Joined: Aug 2008
Posts: 18,619
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.


Last edited by StevieC; 10/26/17 05:39 PM.

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Re: Is 3-6 months savings for emergencies realistic? [Re: ZZman] #4555378
10/26/17 05:44 PM
10/26/17 05:44 PM
Joined: Dec 2014
Posts: 192
USA
dbias Offline
dbias  Offline
Joined: Dec 2014
Posts: 192
USA
6 months was what i had on hand when i was off work for 9 months shocked2


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