Is it realistic to have a 6 months emergency fund?

[JetFueledThoughts]

I have somewhere around that now, but realistically if it went past 3-4 months I’d have to begin liquidating some stocks, crypto holdings, etc. that I wouldn’t want to be using, so that would be annoying.

 

[THE MACHINE]

Most people don't have half a year in salary saved up. If youre making 40k a year and living off that, basically you would need to have 20k in the bank for emergencies.

Forget anyone making 40k, is there anyone yall know who is making even 80k a year who has 20k in savings

If you are over 35 this should be relatively easy to achieve. I can see a person in their early 20s not having that saved but c'mon. If youve been making 75-80k for more than 10 years you should damn well have 20-30k to pull from. That's saving 3k/year (250$/month) for 10 years.

 

[dora_da_destroyer]

If you are over 35 this should be relatively easy to achieve. I can see a person in their early 20s not having that saved but c'mon. If youve been making 75-80k for more than 10 years you should damn well have 20-30k to pull from. That's saving 3k/year (250$/month) for 10 years.

Most people don’t make 70-85k and you’re calculating saving that 3k/yr without ever touching it. Even people who are able to save/save a lot will likely have had moments they dipped into their savings - down payment, new car, moving, furniture, paying off a loan, etc.

 

[THE MACHINE]

Most people don’t make 70-85k and you’re calculating saving that 3k/yr without ever touching it. Even people who are able to save/save a lot will likely have had moments they dipped into their savings - down payment, new car, moving, furniture, paying off a loan, etc.

Oh, I was quoting the person that used 80k. I was assuming the person would be saving more like 3-400/month and netting 250 after dipping

 

[MoveForward]

Not only may it be unrealistic, but it may be unnecessary.

I've made the point here before, that there's no need for an emergency fund if you have good credit.

Especially if you're a homeowner. If you rent, you need the fund.

Help me understand this please…

 

[MJ Truth]

Like with anything else, it depends on their income and expenses

If you're living paycheck-to-paycheck probably not. If you keep your costs of living down and make decent money it's doable. A big problem is that most people can't afford their rent/mortgage. You shouldn't spend more than 30% of your income on housing (IMO <25%) but most people spend like half. Obviously it's hard to save in that situation.


Basically a huge portion of people live above their means and have rent/car notes/etc they can't afford.

It depends a lot more on their decision making and discipline than income/expenses if we’re being honest. For MOST people.

 

[Conan]

Help me understand this please…

Maybe he's referring to a HELOC or refinance?

 

[MJ Truth]

I make slightly less than that and have well over 40k in savings.

But I don't have kids, my car is used, and my apartment is on the cheap side so obviously that makes it easy for me to save.

Slightly less than 40 or slightly less than 80?

 

[Houston911]

Ok, if you want to redefine emergency funds to include those funds in an easily liquidated vehicle such as a brokerage account, it’s an overstep to say that your target should be a few years.

There’s nothing wrong with acquiring non-liquid assets with higher earning potential. 6 months of true emergency funds should be enough to tide you over if your world got rocked allowing you time to either replace your main income stream or adjust other aspects of your life (which could mean liquidating some of your non-liquid assets)

who said or implied there was something wrong with that? You can do both

 

[KING WILL]

I did it. But I had an incredible set up that most people dont.

Also, I don't keep an huge emergency fund anywhere. It's all invested now.

Now, I keep a few hundred in checkings. $1000 in savings (emergency), and I have investing account with SOFI that I will withdraw from if I needed it.

The original Efund has been compounding for a few years now.

 

[acri1]

it was @dora_da_destroyer who put me on to I was being foolish with my money just letting it sit in a bs savings account when I could be saving for vacations and major purchases in brokerages where I would get a better return on my funds.

From that point on I have beat any savings accounts I ever had and if I need the funds it just takes 1-3 days to get them. Which is usually just to pay back a card or something. Banks make money off of us just sitting our money in there.

put me on game

I have like $50k sitting in savings. I know I'm losing money on interest but what if the stock market crashes or something I need my shyt to be insured


Hard for me to trust these finance companies.

 

[Xyrax]

I can't get the logic of keeping the entirety of your emergency fund invested at all times. How old are yall. I know I'm but are any of yall old enough to remember 2008? Market crash + economic nose dive leading to layoffs of professionals will leave you in a terrible spot if you have NO liquid cash to endure. That shyt was real, and ruined a lot of people. High interest savings accounts have dogshyt rates compared to the appreciation the S&P and Nasdaq are putting out right now; but you cannot put a price on safety. Especially with this level of quantitative easing and reverse repo levels we are seeing in the market now.

If a crash happens I want to sleep well regardless. Not take a double L because my taxable investment account loses figures on top of selling my securities at huge losses just to float my mortgage payments after being laid off. So 6-9 months is fine by me.

put me on game

I have like $50k sitting in savings. I know I'm losing money on interest but what if the stock market crashes or something I need my shyt to be insured


Hard for me to trust these finance companies.

Is 50k 6 months of expenses for you breh? If not put that money in the market until its down to 3-6 months.

 

[Rusty$hackleford]

put me on game

I have like $50k sitting in savings. I know I'm losing money on interest but what if the stock market crashes or something I need my shyt to be insured


Hard for me to trust these finance companies.

Me too, and my sentiments exactly

 

[Peruvian Connect]

Average person cannot afford to have 6 months of expenses sitting in a non registered account untouched

100 percent false

 

[Peruvian Connect]

In an ideal world, you would have 6 months worth of emergency fund to cover your monthly expenses.

Is it realistic for the average person?

It is realistic. It takes discipline though. Something most people do not have,