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hazeleyes33
LIF Adult
Member since 5/05 13060 total posts
Name:
Ginger
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Spinoff of Money-Emergency Savings
We hear from financial planners that we should have 6-8 (or more) months of salary in an emergency savings.
My question is, how long do they say it should take to save up that much?
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Posted 5/18/10 4:57 PM  |
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hazeleyes33
LIF Adult
Member since 5/05 13060 total posts
Name:
Ginger
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Re: Spinoff of Money-Emergency Savings
Bumping
So many people are saying on another thread how you should have 6-8 months worth of salary saved but no one knows how long it took them to save it or how long they estimate it should take you?
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| Posted 5/18/10 6:24 PM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: Spinoff of Money-Emergency Savings
I think it should take you as long as it takes
it would be impossible to say it should only take you X months to save it- b/c you are saving 6-8 months worth of expenses- which is different for everyone
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| Posted 5/18/10 6:27 PM |
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hazeleyes33
LIF Adult
Member since 5/05 13060 total posts
Name:
Ginger
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Re: Spinoff of Money-Emergency Savings
Posted by Beth
I think it should take you as long as it takes
it would be impossible to say it should only take you X months to save it- b/c you are saving 6-8 months worth of expenses- which is different for everyone
I was just wondering as they say to save that up before retirement. I wonder how long it takes people on average.
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| Posted 5/18/10 6:43 PM |
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LSP2005
Bunny kisses are so cute!
Member since 5/05 19458 total posts
Name:
L
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Re: Spinoff of Money-Emergency Savings
I think it really depends upon how much you earn. Someone barely scraping by will take a lot longer than someone who is rolling in the dough. If you and a spouse make enough to really save, and can save an entire paycheck or two a month then it could take 6 months or less. It depends how much you make and how motivated you are to build up an emergency fund.
Look at your fixed expenses (mortgage, insurance, taxes, assuming no other debt) and your income, how much after the top three are taken out? All the rest, even food, is disposable income. You choose to buy better cuts of meat and organic vegies, in theory you could live off of the dollar menu at mcdonalds. I am not saying I would do that, or that it is healthy, but a person could do that and spend as little as $3 a day on food. So if you walked everywhere, and spent about $100 for the month on food, what would that leave you? You could get a phone card for emergencies. No new clothing, no gifts, no entertainment. It might not be a fun month, but you would build up an emergency fund quickly that way. Alternatively, you could live your life and cut a little back, and save what you cut back on. It would take longer to save your emergency fund. It is all about the choices you make to get where you want to go.
ETA: An e-fund and a retirement fund do not necessarily have to be mutually exclusive. You could save for both at the same time. It would just take you longer to build up the e-fund. It depends upon how much you have saved and if you have other investments that could be liquidated.
Message edited 5/18/2010 8:54:34 PM.
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| Posted 5/18/10 8:52 PM |
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MeNBobs
*****
Member since 4/07 3765 total posts
Name:
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Re: Spinoff of Money-Emergency Savings
I'd tell you but I haven't gotten there yet. So for now my answer is 27 years and 9 months.
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| Posted 5/18/10 8:58 PM |
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Katareen
5,000 Posts!
Member since 4/10 7180 total posts
Name:
Katherine
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Re: Spinoff of Money-Emergency Savings
DH and I only spend half of what we make--so it would only take us 6-8 months to save this much. But if one of us wasn't working, it could take years. There is no one answer for everyone.
If you want to want to know how to do this, just take a look at your everyday spending. Cutting out so many little things per month can add up a ton:
Starbucks before work: $60/mo
Weekly Manicure: $35/mo
Monthly Pedicure: $20/mo
2 Dinners out: $100/mo
Lunch out at work: $200/mo
Cable movie package: $20/mo
Of course you'd have to purchase more food/coffee for home use, but for $360 we could eat for over 2 months!
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| Posted 5/18/10 9:32 PM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: Spinoff of Money-Emergency Savings
Posted by LSP2005
I think it really depends upon how much you earn. Someone barely scraping by will take a lot longer than someone who is rolling in the dough. If you and a spouse make enough to really save, and can save an entire paycheck or two a month then it could take 6 months or less. It depends how much you make and how motivated you are to build up an emergency fund.
Look at your fixed expenses (mortgage, insurance, taxes, assuming no other debt) and your income, how much after the top three are taken out? All the rest, even food, is disposable income. You choose to buy better cuts of meat and organic vegies, in theory you could live off of the dollar menu at mcdonalds. I am not saying I would do that, or that it is healthy, but a person could do that and spend as little as $3 a day on food. So if you walked everywhere, and spent about $100 for the month on food, what would that leave you? You could get a phone card for emergencies. No new clothing, no gifts, no entertainment. It might not be a fun month, but you would build up an emergency fund quickly that way. Alternatively, you could live your life and cut a little back, and save what you cut back on. It would take longer to save your emergency fund. It is all about the choices you make to get where you want to go.
Good post.
You can also do the opposite. Instead of cutting back... WORK MORE!
Pick up a second job. Part time work. Freelancing. Anything that can bring in a couple extra bucks.
My emergency fund was built up solely from working extra hours, doing various part time work. I didn't have to cut anything. I just worked more hours. Prefer it that way.
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| Posted 5/18/10 9:34 PM |
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hazeleyes33
LIF Adult
Member since 5/05 13060 total posts
Name:
Ginger
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Re: Spinoff of Money-Emergency Savings
Posted by LSP2005
I think it really depends upon how much you earn. Someone barely scraping by will take a lot longer than someone who is rolling in the dough. If you and a spouse make enough to really save, and can save an entire paycheck or two a month then it could take 6 months or less. It depends how much you make and how motivated you are to build up an emergency fund.
Look at your fixed expenses (mortgage, insurance, taxes, assuming no other debt) and your income, how much after the top three are taken out? All the rest, even food, is disposable income. You choose to buy better cuts of meat and organic vegies, in theory you could live off of the dollar menu at mcdonalds. I am not saying I would do that, or that it is healthy, but a person could do that and spend as little as $3 a day on food. So if you walked everywhere, and spent about $100 for the month on food, what would that leave you? You could get a phone card for emergencies. No new clothing, no gifts, no entertainment. It might not be a fun month, but you would build up an emergency fund quickly that way. Alternatively, you could live your life and cut a little back, and save what you cut back on. It would take longer to save your emergency fund. It is all about the choices you make to get where you want to go.
ETA: An e-fund and a retirement fund do not necessarily have to be mutually exclusive. You could save for both at the same time. It would just take you longer to build up the e-fund. It depends upon how much you have saved and if you have other investments that could be liquidated.
Thanks so much. Right now we still save with my 401K and in a savings account but it is very tight without my dh working ft.
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| Posted 5/18/10 9:47 PM |
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hazeleyes33
LIF Adult
Member since 5/05 13060 total posts
Name:
Ginger
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Re: Spinoff of Money-Emergency Savings
Posted by MeNBobs
I'd tell you but I haven't gotten there yet. So for now my answer is 27 years and 9 months.
Thanks :)
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| Posted 5/18/10 9:48 PM |
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hazeleyes33
LIF Adult
Member since 5/05 13060 total posts
Name:
Ginger
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Re: Spinoff of Money-Emergency Savings
Posted by Katareen
DH and I only spend half of what we make--so it would only take us 6-8 months to save this much. But if one of us wasn't working, it could take years. There is no one answer for everyone.
If you want to want to know how to do this, just take a look at your everyday spending. Cutting out so many little things per month can add up a ton:
Starbucks before work: $60/mo
Weekly Manicure: $35/mo
Monthly Pedicure: $20/mo
2 Dinners out: $100/mo
Lunch out at work: $200/mo
Cable movie package: $20/mo
Of course you'd have to purchase more food/coffee for home use, but for $360 we could eat for over 2 months!
Thanks :)
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| Posted 5/18/10 9:48 PM |
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hazeleyes33
LIF Adult
Member since 5/05 13060 total posts
Name:
Ginger
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Re: Spinoff of Money-Emergency Savings
Posted by ave1024
Posted by LSP2005
I think it really depends upon how much you earn. Someone barely scraping by will take a lot longer than someone who is rolling in the dough. If you and a spouse make enough to really save, and can save an entire paycheck or two a month then it could take 6 months or less. It depends how much you make and how motivated you are to build up an emergency fund.
Look at your fixed expenses (mortgage, insurance, taxes, assuming no other debt) and your income, how much after the top three are taken out? All the rest, even food, is disposable income. You choose to buy better cuts of meat and organic vegies, in theory you could live off of the dollar menu at mcdonalds. I am not saying I would do that, or that it is healthy, but a person could do that and spend as little as $3 a day on food. So if you walked everywhere, and spent about $100 for the month on food, what would that leave you? You could get a phone card for emergencies. No new clothing, no gifts, no entertainment. It might not be a fun month, but you would build up an emergency fund quickly that way. Alternatively, you could live your life and cut a little back, and save what you cut back on. It would take longer to save your emergency fund. It is all about the choices you make to get where you want to go.
Good post.
You can also do the opposite. Instead of cutting back... WORK MORE!
Pick up a second job. Part time work. Freelancing. Anything that can bring in a couple extra bucks.
My emergency fund was built up solely from working extra hours, doing various part time work. I didn't have to cut anything. I just worked more hours. Prefer it that way.
I posted to you on the other thread that right now it is very hard to find one job let alone two. My dh goes on interviews and there are just tons of other people there with him. No one calls back. This has been going on for months and he has barely worked fulltime in 2 years. It is very hard out there.
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| Posted 5/18/10 9:50 PM |
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MarathonKnitter
HAPPY
Member since 2/07 17374 total posts
Name:
EMBRACING CHANGE
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Re: Spinoff of Money-Emergency Savings
it took me 13 months to save 6 months worth of living expenses.
i was working extra and cutting back (to the bare bones)
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| Posted 5/18/10 10:09 PM |
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hazeleyes33
LIF Adult
Member since 5/05 13060 total posts
Name:
Ginger
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Re: Spinoff of Money-Emergency Savings
Posted by libby2595
it took me 13 months to save 6 months worth of living expenses.
i was working extra and cutting back (to the bare bones)
Thanks so much :)
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| Posted 5/18/10 10:16 PM |
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MarathonKnitter
HAPPY
Member since 2/07 17374 total posts
Name:
EMBRACING CHANGE
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Re: Spinoff of Money-Emergency Savings
Posted by hazeleyes33
Posted by libby2595
it took me 13 months to save 6 months worth of living expenses.
i was working extra and cutting back (to the bare bones)
Thanks so much :)
no problem! let me tell you, it wasn't always fun. the harder you work at it, the faster it is and then you can move on to the next step
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| Posted 5/18/10 10:24 PM |
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Re: Spinoff of Money-Emergency Savings
Here's how it would work for me (if I actually did this, which I don't): 50% of my current take home does not go toward any bills, but does go toward other living expenses (groceries, gas, dinner out..anything we pay cash for). By my estimates, about 50% of that could be saved, so 25% of my take home salary. So, it would take me 4 months to save for every one month of take home pay. For 6 months that would be 2 years of saving at that rate.
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| Posted 5/18/10 10:35 PM |
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hazeleyes33
LIF Adult
Member since 5/05 13060 total posts
Name:
Ginger
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Re: Spinoff of Money-Emergency Savings
Posted by BaseballWidow
Here's how it would work for me (if I actually did this, which I don't): 50% of my current take home does not go toward any bills, but does go toward other living expenses (groceries, gas, dinner out..anything we pay cash for). By my estimates, about 50% of that could be saved, so 25% of my take home salary. So, it would take me 4 months to save for every one month of take home pay. For 6 months that would be 2 years of saving at that rate.
Thanks :)
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| Posted 5/19/10 9:21 AM |
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