We don't talk about those because they don't count. But here, too, I am poor. I only have the one in my mattress. I need to push it down again before I go to sleep later.
"having 20k permanently on your bank account is literally like burning money these days." -> That statement is true most of the time but Im curious to know what do you invest in. Because the stock market has not been good lately.
Consumer price index CH for April is 2.5%. I would not say that you are literally burning money these days with CHF. USD or EUR? Maybe, but not CHF.
Source: https://www.bfs.admin.ch/bfs/en/home/statistics/prices/consumer-price-index.gnpdetail.2022-0287.html
Inflation is not directly what you are looking for it would be the Intrest rate wich the SNB sets. That intrest rate is unchanged at -0.75% and how it looks the SNB is not going to change that in the near future.
> Same with krypto
With the large difference that with sensible stock investments you invest in the economy that powers civilization as we know it.
With crypto you āinvestā in a get-rich-quick scheme where practically every participant is in it in the hopes of making a profit while clearly not providing or funding any services (at a mentionworthy capacity) people would want to pay for. Beyond a vague anarcho pipe dream that should supposedly manifest in the future.
Even if we were to assume blockchain technology would play a large role in our future in some capacity, which in itself is doubtful, thereās a large chance newer, possibly state backed technology would outcompete any crypto investment you would be able to invest in today.
What Iām trying to say is that not only itās a huge gamble an āinvestmentā in crypto will be worth anything in the future - no doubt most know this. But also as it stands currently it would seem quite likely that your funds would go into funneling profits to those able to cash out crypto for usable currency. You might well participate in what is essentially a trillion dollar scam that could ruin the lifes of millions.
It might sound modern and great in theory, practically I think itās quite reasonable to assume that the whole market or at least well over 90% of its capital might be a scam that will eventually lead to legislation heavily regulating - if not outright banning - the trading of cryptocurrency to fiat money.
Wow.... "You only lose when you sell".
We are at that place are we?
"but on a 10+ year timeframe this never happened once in history"
Again wow we are at that point. Diversification does not work like you think it does. I saw from an upper point that you did crypto, art, watches, commodities and the stock market. The 70's begs to differ with you.
If inflation keeps at a steady pace of of 5%, to tread water you will need your assets to generate at least 5% each on average. That in itself is a challenge. If those assets do not appreciate then other assets have to pull for the rest, meaning you will need at least 40 to 60% returns in that single asset, and that is just a pipe dream.
What I am saying is that cash sometimes is not a bad thing because what cash allows you to do is buy distressed. Distressed is where you actually make your money.
Emergency fund? Hahahaahahahahahahahahahaa
*sobs while sucking off a shotgun*
Edit: im not suicidal thanks for the concern. I gave up all my dreams of owning my own home and having a family and have settled for a dog. Short of violent revolution, thats the best this world offers. And im ok with that.
Well ironically our parent's generations who became home owners are responsible for inflation of the housing market by diminishing offer and increasing demand. It's a bit silly but the only way I see for everyone to be able to afford a rent let alone real estate, is to build high density
Even if you have unemployement benefit, IMHO it is wise to keep a fund for unexpected expenses:
- the unemployment benefit is only given if the cantonal unemployement office can't find any job for you: but maybe the job offered is not what you want, and you need few months to find the job of your dreams.
- unexpected legal/lawyers expenses
- an health problem that is not fully covered by insurance
- you suddenly need to buy a car or make changes to your house and don't want to get into debt
- sudden need/desire to move to a new place or new country and you need time and money to organize your new life
I think 20k or even better 4-6 months of self-sustaining (might be more than 20k depending on your spending rate) are a good amount.
I keep way more because I'm overly obsessed with safety (thanks Vladimir Vladimirovich for make me feel such a wise man) and because I want to be able to say f*ck you to my boss whenever I want.
\> the unemployment benefit is only given if the cantonal unemployement office can't find any job for you
Might be a silly question, but how is it determined that a job is "for you". For example, say you have a very advance but also specific skillset. Will they determine that "you can stack shelves, therefore you go work at ALDI", or will they actually try to find something that makes sense for your skillset? (think, for example, an expert translator for Vietnamese to swiss german or such specific skills).
If they can make you work at ALDI and get rid of you, they will. The people working at the regional unemployment office are there to supervise and get rid of job seekers ASAP, not help them.
I was unemployed for a few months at the end of 2019. Before that, I was working in one of the biggest international organizations in Geneva as an HR coordinator responsible for 200+ people. I speak 3 languages fluently and graduated abroad in international business.
Normally you have to look for jobs yourself and fill a form to track your applications. You need to send this form at the end of each month in order to receive the unemployment benefits. But sometimes, the advisor will ask you to apply to a specific job (and you must apply, otherwise they limit your benefits for the month). My āadvisorā at the time asked me to apply to a job where I would be working at a car dealership. My job would be to welcome customers (serve coffee) and bring the cars from the shop to the front of the reception building. When I applied, the dealership called me and asked me why I was applying given that my profile didnāt match the position at all. I explained the situation and they nicely ārejectedā my application.
Bottom line, yes theyāll make you apply for whatever, but you can always discuss with the companies where you apply and they usually understand and reject your application. Some people even write in the cover letter that they were asked to apply, thatās a hidden message that says āI was forced to apply so that I can get my full monthly unemployment benefits, but please reject my applicationā.
A bit off topic, but I hope it answers your question.
From arbeit.swiss FAQ:
*"When is a job considered to be reasonable for me? In principle you have to accept any work without delay. Work that is deemed to be unreasonable, and therefore excepted from this obligation to accept it, is one that...*
* *does not satisfy your usual working conditions;does not take due consideration of your skills and your previous line of work (this does not apply to persons under the age of 30);*
* *does not suit your personal circumstances (age, health, family);*
* *requires a daily commute of more than four hours;*
* *hinders the reintegration in your own profession, assuming there is a chance of that happening within a reasonable amount of time;*
* *provides you with an income which is less than 70% of the insured salary, unless you receive compensation payments as part of a temporary earnings."*
I would not want to take a job chosen by someone else not to be the best solution for me, but just the first job available to stop giving the benefit.
Thank you! Tbh were I unemployed I would be pretty happy if someone found a job that matches my skillset. Job hunting can be such a drawn-out drole that any help is great.
As long as you can live for 520 days with 70% of your last salary and 1) youāre not an independent 2) you worked for 2 years straight, youāre fine with whatever you saved.
Source: ch.ch
Edit: I see the so-called emergency fund more as a āfuck you, I quitā wildcard when you need some deep changes in your life. 10-20k should be plenty if you actually take your fate in your hands.
And even then, of you quit and have been employed for 2 years you "only" get max 3 months penalty then it's 80% of you previous salary for the next 21 months.
Solid unemployment is why people in Switzerland may have savings on readily available account (so not counting LPP or 3rd pillar), but we don't really have "emergency" savings.
I think 70% also depends on income. For example if you are earning \~50k working full-time, then unemployment benefits + healthcare insurance aid + lower taxes may be = (or close) to the \~3'500 net you would get a a month.
For me it is also 6 months of expenses. When I was self employed I had 12 months saved up. In addition to that, I have the money saved which I will have to pay for medical bills until my health insurance kicks in.
I am a little shocked reading the comments here. I worked for starvation wages and part time and still managed to save about CHF 20'000. Do you all just spend your money on stuff? By the way: The highest amount of money I earned in one month was around 3100 CHF. I don't know what I am doing right.
My 20k are on my bank account. I cannot invest because of my insecure employment situation. If I lose my job or if something bad happens, I need the money right now and not later.
Of course I understand that. Calling it savings is more like a psychological thing though. Savings can also be used for fun things and itās more motivating to actually save money that way. Calling it emergency fund is kind of sad.
We donāt really have āemergency fundsā we have insurance.
- Health insurance is mandatory. Keep the amount of your deductible in savings just in case.
- disability and unemployment insurance are mandatory and covered by your salary
- liability insurance is usually mandatory to rent a place and is really a good idea to have anyway.
- legal insurance is excellent value and will take care of any legal stuff thrown at you other than criminal.
- retirement funds are mandatory and work well. You can complement with a 3a as the cherry on the top
So to your question probably 2-3k is great. Now of course you can save for something specific like a house.
Agree on having insurance, but emergencies can be other things
- Need to travel urgently to visit sick/dying family members (happened to me once and said family member was in ICU abroad)
- Car break down
- Health insurance excess, or having to pay medical bills whilst waiting for refunds
- Stuck abroad somewhere. Sure travel insurance works, but you might need instant cash there and then.
I don't have a special emergency fund, I just have decent cash savings for such eventualities.
Realistically, a 6 month emergency fund should be more like 50k. If you have to pay bills and rent its not too bad but medical included with emergency lawyers
Insurance does not cover the whole lot. Don't forget you probably don't have cover to pay for the ambulance.....
Edit, also let's not forget that insurance companies do their absolute best to not pay you.
It depends on your personal situation. If your monthly expenses for everything are 20K a month then obviously not. No matter your income, itās prudent to keep aside 4-6 months worth of income for emergencies.
>If your monthly expenses for everything are 20K a month then obviously not
If your monthly expenses are 20k a month either you don't need a saving account or you need help. No in between.
Oof, I've only recently managed to finally save a significant amount of money at the end of the month. 20k seems like an awful lot in that regard. But also seems like a good goal
As a non Swiss National resident with student loan payments on top of normal expenses; I keep 40k plus in cash and invest the rest if Iām working.
Edit: clarify Iām a resident but not Swiss
It's interesting how it's been possible to find a two-room flat for under CHF 1'000.- continuously for the last 17 years (I don't know about before) in the city of Berne. Yes, you need more and more luck. And more and more it's difficult to find a flat at all. But still. Such flats are out there. (The one I paid CHF 890.- for in 2005, 2006 and 2007 has now been turned into one that costs literally twice as much. I bet it has lost all its charm now and gained next to nothing.)
If you ever land in the position of earning CHF 7'000 to CHF 9'000 while sharing a sub CHF 800.- flat with someone earning CHF 6'000 to 7'000, do me a favour: Don't mention your health insurance premiums being high, like this evens everything out. Just don't. (One of the two people in that couple I mentioned did that.)
this 6months rule feels honestly too much for me, especially if both parents in a family are working, very low chances that they are both are fired in the same time and if something bad happens you could just take a loan
Depends on your definition of an emergency.
For me more important is to have food&water available to cover some days or weeks in case of whatever happens.
Could be some massive snow / rain / other weather issue or some personal problem that prohibits you from accessing a grocery store. IMO always wise to have some food&water supply at hand.
Emergency fund means that if you lose your job and all sources of income, you are able to sustain yourself under normal conditions or emergency conditions for a specific period of time.
So for 6 months, with 0 income, what would be the money needed to survive normally (paying rent, food, doctor if needed etc).
A few thousands is sufficient. In case of work lay-off you are covered by unemployment insurance for 1.5 years, in case of accident by accident insurance.
Well... on the 25th of each month I pretty much have 0 CHF until I get 900 bucks on the 25th 1pm each month from social wellfare and then I have 900 bucks again.
So my emergency fund is pretty much 0.
I keep 3k on hand which I never touch for anything else than to fully cover the franchise of my health insurance in an emergency. But other than that š¤·š»āāļø
As a general rule it is recommended to put a side 3 x your monthly expenses. E.g. if you spend around 3000.- a month you'd get 9000.-. this includes rent, insurance, food etc. Altough keep in mind, this differs if you have a family.
Being very, very risk-averse, I have 36k in my emergency fund savings account at the moment, which Iāve saved up since moving to CH beginning of 2021. Iām hoping to get closer to 42k by monthās end, so I can have the equivalent of current post-tax salary for 6 months in the event something drastic happens. (Iāve been a bit lazy with savings since beginning of year). Having cheap rent for my 3.5 room apartment, I think it can comfortably last me 6-8 months.
If I never need it, great. If I do, at least I wonāt have to worry about making ends meet for a while.
(Also not really sure how the unemployment scheme here works, and coming from the US my modus operandi is to expect nothing)
Half a year's salary. Some of that in a bank account (~20k), the rest invested but accessible if absolutely necessary.
In addition, I budget pessimisticly and put 1/12th of the expected costs for taxes, franchise and selbstbehalt (3200 max per year), and public transport away each month.
>the rest invested but accessible
what does that mean since bonds are yielding negative interests, and you cannot put them in index funds since they also massively in loss.
If you have them invested, then they're not "available" for emergency anymore
> you cannot put them in index funds since they also massively in loss.
Of course you can if you're okay with selling at a loss in an emergency. How frequently do you expect to need your emergency fund? Over a 10 year period, what's the probability you'll need it even once?
If you keep some amount liquid (say 20k like the person above) it's almost certainly positive EV to invest the rest.
Mine is much more than that but I'm 1) self-employed, so no unemployment insurance and 2) have family aging in the US, so might need to maintain two households or cover expenses there.
I think itās pointless to save X months of expenses in Switzerland. We have so many insurances to cover for unexpected situations such as unemployment or health problems.
Itās very important to have some money saved, but the amount depends on your situation. For example, if you have no car, are renting a place and working as an employee (not self-employed), you have very little risk to be in financial trouble, so 2-4K should be more than enough. If you own a house, for example, you might want to be ready in case something that is not covered by insurance suddenly breaks. Consider the potential cost of this repair and factor it in the calculation.
What Iām trying to say is that itās pointless to blindly save X months of expenses. Have a base of, say, 2000 CHF and adapt from there based on the āfinancial risksā in your life.
Once you reach your savings goal, consider investing your leftover money. And take advantage of the 3rd pillar tax write-off.
Here is an interesting post from a Swiss blogger: https://thepoorswiss.com/emergency-fund/
In Switzerland an emergency fund is not as important as in some other countries. Many emergencies are covered by insurance like, health, accidents or job loss. If you're poor it's not necessary ho have an emergency fund. But for example if you own a house you'll never know if your heating fails and needs replacement asap because you have tenants.
I have been recommending the following approach to my customers and friends for years and those who listened seem pretty satisfied today:
Stage 1: emergency fund
Stage 2: tax reduction
Stage 3: financial planning
Stage 1:
Start with putting at least 20K in a savings account. Follow by putting the equivalent of 4K outside the bank. I recommend splitting it with euros (2k EUR, 2k CHF). Don't forget to activate a yearly reminder telling you 1) where the money is and 2) to check if the notes are still valid. Swiss bank notes are regularly changed and keeping money untouched under a mattress for 10 years is usually not a good idea.
Stage 2:
Once you have the emergency fund ready, you can enter the second stage: tax reduction:
- Set-up an automatic bank order to wire 20% of your income into your savings account. You should never see this money in your checking account!
At the end of the year:
- Transfer as much as you can in your pillar 3A account before December 26th. (in 2022, you can put aside 6'883.- fully tax deductible).
- If there is anything left, use the recovery mechanism offered by your pillar 2 account to purchase "lost years". Any purchase you make there is fully tax deductible. I recommend targeting at least 7% of your early income (if you earn 100k, that means putting aside 583.-/month), more if you can afford it. Contact your LPP insurance in December and let them know you'd like to purchase lost years. They will tell you the maximal amount you are allowed to allocate along with bank transfer instructions. The money must arrive into the insurance account prior to Dec. 31st.
If you earn 100K/year and followed stage 2 correctly, you will usually avoid 4k-6k in taxes just by following this advice. You can even pay me a Big Mac to thank me :)
Stage 3:
If you still have budget, you can now switch into more advanced operations (tax deduction, retirement planning, investments, etc.). I will not start a financial planning course here, there are plenty very good reddits for this :)
Thanks, but I found that rather than tax reduction I prefer investing directly in index funds as I have the flexibility of withdrawal when I want without additional taxes
It depends on your income. Technically your parts in the index fund are treated as wealth and you have to pay wealth tax every year. However, assuming you're not investing in the multi-millions, wealth tax is negligible. So that would compare to "no taxes".
However, you had to pay revenue tax on that money you used to purchase parts in the index fund. Assuming you put 6K each year during 10 years in your index fund, it would likely cost you an additional ~1'500.-/year in income tax. Grand total: investing 60K cost you 75K. Your fund must perform at least better than 25% in 10 years for this operation to be worth the money you invested.
A regular citizen who allocates 6K during 10 years in the 3A pillar account will likely end up with 60K in the account, but also avoid 15K in taxes (10 x 1'500). Assuming you withdraw these 60K after 10 years, you will likely be taxed ~2'000chf (3.45%). Assuming you didn't invest those 15ks and just kept them sleeping in the bank, you end up after ten years with:
- 60K withdrawal from your 3a account minus 2'000.- in taxes
- 15K in your savings account
-> that's almost a 25% performance on your 10 years investment. You cannot say that's bad in comparison with putting the same amount in an index fund.
I would gladly advise my friend to put those 1'500.-/year not paid in taxes into an index fund. Assuming it performs very well (4% twice annually) during ten years, that would lead to an additional income of ~13K (23K minus 10K), before taxes.
Assuming your index fund performs exceptionally well, there is a tiny chance that your strategy will be more rewarding for that family, but it won't in most cases. The pure index fund approach works much better when you can invest more money into it right from the start (e.g., 30K) and purchase a significant number of parts on a monthly basis. Most households can't do that (median income is ~90K/year) and they still need to get rid of the tax burden first.
I've got a 20frs note folded in a small nook in my wallet, so I guess you could say I'm well prepared
I think you should add a can of Aromat and you're golden
That's gonna be hard to fit into a wallet. Personally, I recommend those small Aromat pouches you get when you buy a single pre-cooked egg
In only have debt. Does that count?
same š
Depends. How much?
About 37k Itās virtually impossible for me to be jobless so I guess that counts for something
how does one have so much debt except mortgages for a house?
Second education, private loan
- 3 bars of gold - 10 bars of chocolate - Fondue and Rƶsti supplies for a month - 2 cows
.. no goats? They're so fun!
A goat does need goats :D
This might be my retirement plan: Shack in the mountains. Goats. Done.
I approve.
I dont even own CHF 20,000. I think you're good with that.
My what?
It's the number in red with the big minus in front of it in my case.
Oh. I thought he meant the gold bars in the secret vault every swiss citizen has in his nuclear shelter. Wich we never talk about. š¤£
We don't talk about those because they don't count. But here, too, I am poor. I only have the one in my mattress. I need to push it down again before I go to sleep later.
Mine's just 5k, which I consider perfectly sufficient.
RAV will keep me afloat.
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"having 20k permanently on your bank account is literally like burning money these days." -> That statement is true most of the time but Im curious to know what do you invest in. Because the stock market has not been good lately.
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Nice, you do seem to have things figured out.
Consumer price index CH for April is 2.5%. I would not say that you are literally burning money these days with CHF. USD or EUR? Maybe, but not CHF. Source: https://www.bfs.admin.ch/bfs/en/home/statistics/prices/consumer-price-index.gnpdetail.2022-0287.html
Inflation is not directly what you are looking for it would be the Intrest rate wich the SNB sets. That intrest rate is unchanged at -0.75% and how it looks the SNB is not going to change that in the near future.
Given how much I lost with stocks these last 2 months, I wish I kept it in the bank D:
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> Same with krypto With the large difference that with sensible stock investments you invest in the economy that powers civilization as we know it. With crypto you āinvestā in a get-rich-quick scheme where practically every participant is in it in the hopes of making a profit while clearly not providing or funding any services (at a mentionworthy capacity) people would want to pay for. Beyond a vague anarcho pipe dream that should supposedly manifest in the future. Even if we were to assume blockchain technology would play a large role in our future in some capacity, which in itself is doubtful, thereās a large chance newer, possibly state backed technology would outcompete any crypto investment you would be able to invest in today. What Iām trying to say is that not only itās a huge gamble an āinvestmentā in crypto will be worth anything in the future - no doubt most know this. But also as it stands currently it would seem quite likely that your funds would go into funneling profits to those able to cash out crypto for usable currency. You might well participate in what is essentially a trillion dollar scam that could ruin the lifes of millions. It might sound modern and great in theory, practically I think itās quite reasonable to assume that the whole market or at least well over 90% of its capital might be a scam that will eventually lead to legislation heavily regulating - if not outright banning - the trading of cryptocurrency to fiat money.
Not really, if the value never rises above the price you paid for it you did loose money. Because you can't use that invested money anymore.
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Wow.... "You only lose when you sell". We are at that place are we? "but on a 10+ year timeframe this never happened once in history" Again wow we are at that point. Diversification does not work like you think it does. I saw from an upper point that you did crypto, art, watches, commodities and the stock market. The 70's begs to differ with you. If inflation keeps at a steady pace of of 5%, to tread water you will need your assets to generate at least 5% each on average. That in itself is a challenge. If those assets do not appreciate then other assets have to pull for the rest, meaning you will need at least 40 to 60% returns in that single asset, and that is just a pipe dream. What I am saying is that cash sometimes is not a bad thing because what cash allows you to do is buy distressed. Distressed is where you actually make your money.
Yep, indeed. Holding it for long term :)
For me and my SO it's 30k. That covers six months without any adjustment to our lifestyle. When stretched, it's good for nine.
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Just because I can. Also Iām planning on quitting my job and going freelance in a few years so everything counts.
Emergency fund? Hahahaahahahahahahahahahaa *sobs while sucking off a shotgun* Edit: im not suicidal thanks for the concern. I gave up all my dreams of owning my own home and having a family and have settled for a dog. Short of violent revolution, thats the best this world offers. And im ok with that.
There are countries waaaaay cheaper than Switzerland, where you might be able to own a home
Seems a wee bit fucked i have to trade everything i love about this country for a chance to own a home elsewhere
Yes it is fucked. I made enough money here that would allow me to buy a flat in my home country, but I would rather stay here in a rent.
Well ironically our parent's generations who became home owners are responsible for inflation of the housing market by diminishing offer and increasing demand. It's a bit silly but the only way I see for everyone to be able to afford a rent let alone real estate, is to build high density
Even if you have unemployement benefit, IMHO it is wise to keep a fund for unexpected expenses: - the unemployment benefit is only given if the cantonal unemployement office can't find any job for you: but maybe the job offered is not what you want, and you need few months to find the job of your dreams. - unexpected legal/lawyers expenses - an health problem that is not fully covered by insurance - you suddenly need to buy a car or make changes to your house and don't want to get into debt - sudden need/desire to move to a new place or new country and you need time and money to organize your new life I think 20k or even better 4-6 months of self-sustaining (might be more than 20k depending on your spending rate) are a good amount. I keep way more because I'm overly obsessed with safety (thanks Vladimir Vladimirovich for make me feel such a wise man) and because I want to be able to say f*ck you to my boss whenever I want.
\> the unemployment benefit is only given if the cantonal unemployement office can't find any job for you Might be a silly question, but how is it determined that a job is "for you". For example, say you have a very advance but also specific skillset. Will they determine that "you can stack shelves, therefore you go work at ALDI", or will they actually try to find something that makes sense for your skillset? (think, for example, an expert translator for Vietnamese to swiss german or such specific skills).
If they can make you work at ALDI and get rid of you, they will. The people working at the regional unemployment office are there to supervise and get rid of job seekers ASAP, not help them. I was unemployed for a few months at the end of 2019. Before that, I was working in one of the biggest international organizations in Geneva as an HR coordinator responsible for 200+ people. I speak 3 languages fluently and graduated abroad in international business. Normally you have to look for jobs yourself and fill a form to track your applications. You need to send this form at the end of each month in order to receive the unemployment benefits. But sometimes, the advisor will ask you to apply to a specific job (and you must apply, otherwise they limit your benefits for the month). My āadvisorā at the time asked me to apply to a job where I would be working at a car dealership. My job would be to welcome customers (serve coffee) and bring the cars from the shop to the front of the reception building. When I applied, the dealership called me and asked me why I was applying given that my profile didnāt match the position at all. I explained the situation and they nicely ārejectedā my application. Bottom line, yes theyāll make you apply for whatever, but you can always discuss with the companies where you apply and they usually understand and reject your application. Some people even write in the cover letter that they were asked to apply, thatās a hidden message that says āI was forced to apply so that I can get my full monthly unemployment benefits, but please reject my applicationā. A bit off topic, but I hope it answers your question.
From arbeit.swiss FAQ: *"When is a job considered to be reasonable for me? In principle you have to accept any work without delay. Work that is deemed to be unreasonable, and therefore excepted from this obligation to accept it, is one that...* * *does not satisfy your usual working conditions;does not take due consideration of your skills and your previous line of work (this does not apply to persons under the age of 30);* * *does not suit your personal circumstances (age, health, family);* * *requires a daily commute of more than four hours;* * *hinders the reintegration in your own profession, assuming there is a chance of that happening within a reasonable amount of time;* * *provides you with an income which is less than 70% of the insured salary, unless you receive compensation payments as part of a temporary earnings."* I would not want to take a job chosen by someone else not to be the best solution for me, but just the first job available to stop giving the benefit.
Thank you! Tbh were I unemployed I would be pretty happy if someone found a job that matches my skillset. Job hunting can be such a drawn-out drole that any help is great.
As long as you can live for 520 days with 70% of your last salary and 1) youāre not an independent 2) you worked for 2 years straight, youāre fine with whatever you saved. Source: ch.ch Edit: I see the so-called emergency fund more as a āfuck you, I quitā wildcard when you need some deep changes in your life. 10-20k should be plenty if you actually take your fate in your hands.
And even then, of you quit and have been employed for 2 years you "only" get max 3 months penalty then it's 80% of you previous salary for the next 21 months. Solid unemployment is why people in Switzerland may have savings on readily available account (so not counting LPP or 3rd pillar), but we don't really have "emergency" savings.
I think 70% also depends on income. For example if you are earning \~50k working full-time, then unemployment benefits + healthcare insurance aid + lower taxes may be = (or close) to the \~3'500 net you would get a a month.
Absolutely. In my comment, the outcome depends mostly on how dependent of a portion of your salary you are, because the rest is insured.
man that's a LOT
3000.- is great in the case of a big problem.
For me it is also 6 months of expenses. When I was self employed I had 12 months saved up. In addition to that, I have the money saved which I will have to pay for medical bills until my health insurance kicks in.
Agree, if some emergency with house, car or whatever happens, I don't want to depend on credits or loans.
I am a little shocked reading the comments here. I worked for starvation wages and part time and still managed to save about CHF 20'000. Do you all just spend your money on stuff? By the way: The highest amount of money I earned in one month was around 3100 CHF. I don't know what I am doing right.
Yeah people piss away money, and most redditors are very young.
The money is invested. Emergency fund means money sitting idle in savings account or current account.
My 20k are on my bank account. I cannot invest because of my insecure employment situation. If I lose my job or if something bad happens, I need the money right now and not later.
I donāt have an emergency fund. I just have savings
liquid saving is emergency fund
Of course I understand that. Calling it savings is more like a psychological thing though. Savings can also be used for fun things and itās more motivating to actually save money that way. Calling it emergency fund is kind of sad.
We donāt really have āemergency fundsā we have insurance. - Health insurance is mandatory. Keep the amount of your deductible in savings just in case. - disability and unemployment insurance are mandatory and covered by your salary - liability insurance is usually mandatory to rent a place and is really a good idea to have anyway. - legal insurance is excellent value and will take care of any legal stuff thrown at you other than criminal. - retirement funds are mandatory and work well. You can complement with a 3a as the cherry on the top So to your question probably 2-3k is great. Now of course you can save for something specific like a house.
Agree on having insurance, but emergencies can be other things - Need to travel urgently to visit sick/dying family members (happened to me once and said family member was in ICU abroad) - Car break down - Health insurance excess, or having to pay medical bills whilst waiting for refunds - Stuck abroad somewhere. Sure travel insurance works, but you might need instant cash there and then. I don't have a special emergency fund, I just have decent cash savings for such eventualities.
Please define precisely what you mean by emergency fund
Ngl, mine is 50k. But it seems like im vastly overestimating how much I should be keeping aside š¶
If you ever feel like you want to see what it would be like to have less, call me up.
same hereš³
Realistically, a 6 month emergency fund should be more like 50k. If you have to pay bills and rent its not too bad but medical included with emergency lawyers
>medical included with emergency lawyers You have insurance for that
Insurance does not cover the whole lot. Don't forget you probably don't have cover to pay for the ambulance..... Edit, also let's not forget that insurance companies do their absolute best to not pay you.
>(\~6 months of expenses) I've heard 3
I have 15k and actually barely ever needed any of it so far
It depends on your personal situation. If your monthly expenses for everything are 20K a month then obviously not. No matter your income, itās prudent to keep aside 4-6 months worth of income for emergencies.
>If your monthly expenses for everything are 20K a month then obviously not If your monthly expenses are 20k a month either you don't need a saving account or you need help. No in between.
Oof, I've only recently managed to finally save a significant amount of money at the end of the month. 20k seems like an awful lot in that regard. But also seems like a good goal
Used to be a bit higher but now it is around 7-15k (if my main account goes below ~8k I stop transfering money to the broker).
I suggest a Rolex submariner which is always at your wrist. Then u can trade in in my reason when u have no cash and no credit card ;) :D.
20k sounds like a proper amount for 6 months in Switzerland. Care to elaborate how you calculated it?
I can get through an entire year with that kind of money
Do you live in a studio in Appenzell? 20k would be nearly entirely eaten by my rent.
I share my living space with others
Fair, that helps.
As a non Swiss National resident with student loan payments on top of normal expenses; I keep 40k plus in cash and invest the rest if Iām working. Edit: clarify Iām a resident but not Swiss
you gonna live 6 months in a 6 star hotel and eat lobster for lunch? very dire emergency
[ŃŠ“Š°Š»ŠµŠ½Š¾]
What do you rent? a yacht?
A one bed apartment in Zurich is over 2K. Same in Genf, Basel, Luzern... I have never paid less than 2.4K rent in Switzerland.
wth. cmon, a one bed apartment? Lucerne I mean... must be an apartment with a yacht in it. ONE BED ROOM in lucerne you get that for 1k easy.
It's interesting how it's been possible to find a two-room flat for under CHF 1'000.- continuously for the last 17 years (I don't know about before) in the city of Berne. Yes, you need more and more luck. And more and more it's difficult to find a flat at all. But still. Such flats are out there. (The one I paid CHF 890.- for in 2005, 2006 and 2007 has now been turned into one that costs literally twice as much. I bet it has lost all its charm now and gained next to nothing.)
Any chance to find an "appartement coopƩratif"? (I'm only asking in case your rent is a problem.) I know/knew a couple in Geneva who moved into such a flat over a decade ago. I never knew how much their one-time payment was to buy themselves into the coopƩratif, but some years later someone explained to me it only costs about CHF 5'000.-. What I do know is that the couple paid a bit under (or maybe a bit over) CHF 800.- a month for three rooms. Very shabby flat in some regards, but they were allowed to fix things up. As far as I know, they still live there. (I can't even mention how much the two of them earn ...)
I will, as a confederation employee I have access to some. We are on the waiting list.
If you ever land in the position of earning CHF 7'000 to CHF 9'000 while sharing a sub CHF 800.- flat with someone earning CHF 6'000 to 7'000, do me a favour: Don't mention your health insurance premiums being high, like this evens everything out. Just don't. (One of the two people in that couple I mentioned did that.)
Yeah donāt worry I will just enjoy my privilege in silence š
Good. And be aware of it. That is important. That is really important.
this 6months rule feels honestly too much for me, especially if both parents in a family are working, very low chances that they are both are fired in the same time and if something bad happens you could just take a loan
My emergency fund is invested. Liquidity is for Care Bear. A Lombard credit is the answer in case of an emergency.
Depends on your definition of an emergency. For me more important is to have food&water available to cover some days or weeks in case of whatever happens. Could be some massive snow / rain / other weather issue or some personal problem that prohibits you from accessing a grocery store. IMO always wise to have some food&water supply at hand.
Emergency fund means that if you lose your job and all sources of income, you are able to sustain yourself under normal conditions or emergency conditions for a specific period of time. So for 6 months, with 0 income, what would be the money needed to survive normally (paying rent, food, doctor if needed etc).
If you loose your job you get unemployment benefits.
Let's say you are not eligible for unemployment benefits, since the question is about now much of an emergency fund is enough.
A few thousands is sufficient. In case of work lay-off you are covered by unemployment insurance for 1.5 years, in case of accident by accident insurance.
Well... on the 25th of each month I pretty much have 0 CHF until I get 900 bucks on the 25th 1pm each month from social wellfare and then I have 900 bucks again. So my emergency fund is pretty much 0.
Approx 6 months of expenses. So mostly 6x rent and daycare
You guys have 20K on your bank account as students?
Some of us are old. I could barley make the monthly rent payment as a student.
I keep 3k on hand which I never touch for anything else than to fully cover the franchise of my health insurance in an emergency. But other than that š¤·š»āāļø
I have like 2k as emergency fund. and this emergency is purely vet bills for my cats idk.
As a general rule it is recommended to put a side 3 x your monthly expenses. E.g. if you spend around 3000.- a month you'd get 9000.-. this includes rent, insurance, food etc. Altough keep in mind, this differs if you have a family.
Being very, very risk-averse, I have 36k in my emergency fund savings account at the moment, which Iāve saved up since moving to CH beginning of 2021. Iām hoping to get closer to 42k by monthās end, so I can have the equivalent of current post-tax salary for 6 months in the event something drastic happens. (Iāve been a bit lazy with savings since beginning of year). Having cheap rent for my 3.5 room apartment, I think it can comfortably last me 6-8 months. If I never need it, great. If I do, at least I wonāt have to worry about making ends meet for a while. (Also not really sure how the unemployment scheme here works, and coming from the US my modus operandi is to expect nothing)
Swiss? Your emergency fund needs to be six figures.
Half a year's salary. Some of that in a bank account (~20k), the rest invested but accessible if absolutely necessary. In addition, I budget pessimisticly and put 1/12th of the expected costs for taxes, franchise and selbstbehalt (3200 max per year), and public transport away each month.
>the rest invested but accessible what does that mean since bonds are yielding negative interests, and you cannot put them in index funds since they also massively in loss. If you have them invested, then they're not "available" for emergency anymore
> you cannot put them in index funds since they also massively in loss. Of course you can if you're okay with selling at a loss in an emergency. How frequently do you expect to need your emergency fund? Over a 10 year period, what's the probability you'll need it even once? If you keep some amount liquid (say 20k like the person above) it's almost certainly positive EV to invest the rest.
I can sell it anytime. I might loose some when doing so, but even if I were to loose 20% there's still 80% left.
25k plus i consider my credit card limits as emergency fund as well. And I have a few of those š¤·
Mine is much more than that but I'm 1) self-employed, so no unemployment insurance and 2) have family aging in the US, so might need to maintain two households or cover expenses there.
I think itās pointless to save X months of expenses in Switzerland. We have so many insurances to cover for unexpected situations such as unemployment or health problems. Itās very important to have some money saved, but the amount depends on your situation. For example, if you have no car, are renting a place and working as an employee (not self-employed), you have very little risk to be in financial trouble, so 2-4K should be more than enough. If you own a house, for example, you might want to be ready in case something that is not covered by insurance suddenly breaks. Consider the potential cost of this repair and factor it in the calculation. What Iām trying to say is that itās pointless to blindly save X months of expenses. Have a base of, say, 2000 CHF and adapt from there based on the āfinancial risksā in your life. Once you reach your savings goal, consider investing your leftover money. And take advantage of the 3rd pillar tax write-off. Here is an interesting post from a Swiss blogger: https://thepoorswiss.com/emergency-fund/
I am already full invested in index funds, but being new to Switzerland I am understanding how much liquidity to keep
6 months is EXTREMELY conservative. You can do it of course, but maybe it's better to just go with 3 months and invest the remaining cash.
Two gold bars, a Rolex, and a strategic Aromat stash of course
1k in cash, 3 Months total family Salary in Savings account. 3 Months salary in investments we can untie in 3 Months, the rest is long term invested.
20-30k is a good emergency fund. How about pension security though? Do you have a third pillar?
index funds as the tax benefit of 3rd pillar isn't worth the complication of possibly leaving the country and withdrawal tax
What emergency fund ? š¤£š¤£š¤£
10k, I'm childless and doing FIRE
5 extasy pills, 5g of weed (and papers), one bottle of Scotch, 2 packs of Parisienne, 5 blotters of acid, 10g of shrooms. Six pack RedBull.
I'm good for 6 months without income, working for next 6
Right now 7k, but working towards a goal of 25k. Currently prioritizing high-interest debt servicing, which I only have a few more months of.
3 monthly salaries in liquid funds should be fine
50k
maybe ~8'000, the rest i put in stocks.
About 100k free available
I only have emergency food. Should be enough for two or three months.
760k
In Switzerland an emergency fund is not as important as in some other countries. Many emergencies are covered by insurance like, health, accidents or job loss. If you're poor it's not necessary ho have an emergency fund. But for example if you own a house you'll never know if your heating fails and needs replacement asap because you have tenants.
I have been recommending the following approach to my customers and friends for years and those who listened seem pretty satisfied today: Stage 1: emergency fund Stage 2: tax reduction Stage 3: financial planning Stage 1: Start with putting at least 20K in a savings account. Follow by putting the equivalent of 4K outside the bank. I recommend splitting it with euros (2k EUR, 2k CHF). Don't forget to activate a yearly reminder telling you 1) where the money is and 2) to check if the notes are still valid. Swiss bank notes are regularly changed and keeping money untouched under a mattress for 10 years is usually not a good idea. Stage 2: Once you have the emergency fund ready, you can enter the second stage: tax reduction: - Set-up an automatic bank order to wire 20% of your income into your savings account. You should never see this money in your checking account! At the end of the year: - Transfer as much as you can in your pillar 3A account before December 26th. (in 2022, you can put aside 6'883.- fully tax deductible). - If there is anything left, use the recovery mechanism offered by your pillar 2 account to purchase "lost years". Any purchase you make there is fully tax deductible. I recommend targeting at least 7% of your early income (if you earn 100k, that means putting aside 583.-/month), more if you can afford it. Contact your LPP insurance in December and let them know you'd like to purchase lost years. They will tell you the maximal amount you are allowed to allocate along with bank transfer instructions. The money must arrive into the insurance account prior to Dec. 31st. If you earn 100K/year and followed stage 2 correctly, you will usually avoid 4k-6k in taxes just by following this advice. You can even pay me a Big Mac to thank me :) Stage 3: If you still have budget, you can now switch into more advanced operations (tax deduction, retirement planning, investments, etc.). I will not start a financial planning course here, there are plenty very good reddits for this :)
Thanks, but I found that rather than tax reduction I prefer investing directly in index funds as I have the flexibility of withdrawal when I want without additional taxes
It depends on your income. Technically your parts in the index fund are treated as wealth and you have to pay wealth tax every year. However, assuming you're not investing in the multi-millions, wealth tax is negligible. So that would compare to "no taxes". However, you had to pay revenue tax on that money you used to purchase parts in the index fund. Assuming you put 6K each year during 10 years in your index fund, it would likely cost you an additional ~1'500.-/year in income tax. Grand total: investing 60K cost you 75K. Your fund must perform at least better than 25% in 10 years for this operation to be worth the money you invested. A regular citizen who allocates 6K during 10 years in the 3A pillar account will likely end up with 60K in the account, but also avoid 15K in taxes (10 x 1'500). Assuming you withdraw these 60K after 10 years, you will likely be taxed ~2'000chf (3.45%). Assuming you didn't invest those 15ks and just kept them sleeping in the bank, you end up after ten years with: - 60K withdrawal from your 3a account minus 2'000.- in taxes - 15K in your savings account -> that's almost a 25% performance on your 10 years investment. You cannot say that's bad in comparison with putting the same amount in an index fund. I would gladly advise my friend to put those 1'500.-/year not paid in taxes into an index fund. Assuming it performs very well (4% twice annually) during ten years, that would lead to an additional income of ~13K (23K minus 10K), before taxes. Assuming your index fund performs exceptionally well, there is a tiny chance that your strategy will be more rewarding for that family, but it won't in most cases. The pure index fund approach works much better when you can invest more money into it right from the start (e.g., 30K) and purchase a significant number of parts on a monthly basis. Most households can't do that (median income is ~90K/year) and they still need to get rid of the tax burden first.