"just in case fund"

[onethatcares]

watching the local news last week one of the talking heads recommended having 3 month to 6 month cushion of finances to ease one over the debt crisis hump if needed.

I almost choked on that one as we've been told the majority doesn't have a $400.00 emergency fund to get themselves out of a car problem.

What is your base for safety? We're one of the lucky ones having that 4 month back up plan. Thanks

[OLDMDDEM]

1. We have one year.

[Timewas]

2. We have

At least 6 months cash reserve and probably the same in food if careful....Could stretch the cash to a year or more if needed.

on edit: also we have no debts whatsoever, home and cars all paid for, so month to month utilities,insurance and property taxes are it.

[DetroitLegalBeagle]

3. 14-15 months

My wife and I have enough in our savings account to cover at least a full year of expenses. And enough in our checking for another 2-3 months. Considerably more in our investment and retirement accounts, if we had to withdraw or take loans against them.

[Johnny2X2X]

4. 4-6 months is impossible for most people

Last edited Tue May 23, 2023, 10:25 AM - Edit history (1)

I've been there. And now that we have an income that allows me to save it would be easy for me to be all high and mighty, but I remember not long ago still having a top 25% household income and paycheck to paycheck was the rule.

Have a few months bills in savings. Pay all my bills early or a month ahead that would buy me an extra 6 weeks. Employer never does layoffs without a severance of 1 week's pay for every year worked, so I'd get 10 weeks pay, so that's another 2 months and change. I could go 6-7 months without money coming in and not miss a payment. If I buckled down and lived on bologna and Ramen, could maybe make it 8+ months.

Really easy to be "responsble" as a household when you're making enough to build your savings quickly. Not so easy when your bills to just have the minimum life are equal to your salary. No matter what you make, never lose sight of that fact that 60% of the country doesn't have an extra $400 for a car repair and has to charge repairs to credit cards when they occur.

Greed is our problem. Greed took the money from the workers that came with a growing economy and increased productivty. Worker's salaries didn't keep up. That's why we're where we are. Not inflation, which has been low for 40 years. Not regular people being lazy or being irresponsible. But greed, the greed of the owners is the reason incomes have been stagnent until recently (Thank you Biden) or 40 years. My dad was a skilled worker for GM, his income in the 80s and 90s allowed for him to save and be "responsible". He was no genius with money, he just had a union job that ensured he had the pay that was a fairer share of the value his labor produced. So he as able to have a pension, buy a house, save, and own 2 cars. All while having the best health care for his family.

Things aren't supposed to be like this. The fact 60% of our country wouldn't know what to do in case of an unexpected $400 expense should not be happening in the richest country in human history.

[tazkcmo]

5. I have 8 bucks.

Sorry to brag!

[sarcasmo]

6. 4 months, can stretch that if the GOP chaos plan becomes reality.

[gratuitous]

7. The people who don't have that cushion

Are the ones most likely to bear the brunt of the Republicans' capricious shutdown of the federal government. I know people (we probably all do) who can get knocked off their pins for a day just by oversleeping their alarm by 10 minutes. These people don't have six month or three month financial reserves, and there are benefits programs that will cut you off if you have as little as $1,000 banked.

[haele]

8. I had a 3 month cushion until a spare of family emergencies from January of this year..

Medical bills suck, no matter how much insurance claims your deductable is. My family medical deductible is still $13k (we reached it) and Dental, of course, has no deductible. There's still "co-insurance". Children are really expensive when things happen. Not to mention broke down vehicles.

So as of now, I might have $500, and I'm still $4k in debt with a maxed out credit card.
So having a cushion is nice. Until you need it in large chunks over a period of a couple months.
Rule of thumb in household budgeting - it takes 4x in time to recover 1x in money; one week without pay takes 4 weeks to recover from and 3 months in savings expended takes 1 year to replace - and still takes a lot of careful budgeting to be able to make the schedule.
But the most important thing to remember...once those cushion savings are gone, you can't have another emergency or large expenditure before you bring it back to the magic cushion level. Otherwise, you just get caught in a debt spiral, never being able to save enough to pay for the next emergency that comes up.

Haele

[I_UndergroundPanther]

9. On SSI

Emergency fund? Hahaha. Surely you jest.
Save a little for a long time and suddenly you need teeth yanked out. Every time I save up about 100 bucks along comes some bullshit that takes it all out of my hands.