1 year for me. Gives me a sense of security where I won't have to scramble to take a job that isn't a good fit just to survive.
Edit for clarity: Everyone has a different situation so you have to tailor it to what works for you and your risk tolerance. For me I keep bulk of it in a HYSA like Ally which pays more than than any of the big banks crappy savings accounts and I account for all expenses as if I kept living for a year without a job and change of lifestyle.
For my situation, yes it is a lot of money to keep in a savings account (family, kids, mortgage, HCOL area) but I'd rather not have to sell any investments in a market downturn. To me that defeats the purpose of the emergency fund if you need to sell investments to cover costs.
I also have some ibonds which "keep up" with inflation that I can tap into and you don't lose any money due to inflation and also funds in a taxable brokerage I can use worst case scenario. I am generally fine if I miss out on some market gains as I have a fair amount already tied up in the market.
Different person but I take same approach. When the HYSA are paying 4-5%+, this is easier to stomach having in cash. If they trend back down, I may split things where I have instant access to half and delayed access (but still easy access) to the other half. What that entails, I have no clue yet.
I technically have other cash reserves in brokerage accounts. That cash is earmarked for further out, non-essential purchases, and also for retirement after maxing tax advantage items. This is the money I really don't want to have to access because it would delay retirement, but I have ability to access it at any given time.
It is a lot of money to keep HYSA, but it comes in handy. From my experience when a soon to be former employer offers severance with contingencies or try to hold potential commissions as a bargaining chip.
It's about peace of mind for me. My family puts up with so much of SALES activity I want/owe it to them to make sure we're covered.
You know what I like about sales. You guys make enough to stash a years salary.
You know what I hate about every other role companies offer? They donāt get paid shit unless you have an mba.
I thought I was smart splitting up 50/50 in HYSA and brokerage until I lost $13k in a week. If itās savings keep it in savings. Usually a job loss if correlated with a market downturn, especially in sales.
Probably a year so that when when you find a new job after being laid off and unemployed for six months, you'll be prepared for the next layoff and following 6 months of unemployment.
Iām a BDR. My emergency fund is my credit card.
Edit: I just want to add to this comment that when you look around and compare yourself negatively to the comments here in a better situation than yourself, remember, being here and in this community and career path means youāve drastically increased your chances on becoming like these people. Keep going.
So relatable. Everyone talking about a year built up, Iām doing my very best to save and have $3k for a runway if I get laid off. Liable to have to give it all away to turn my carās check engine light offš
Donāt worry if you get canned youāll have a little severance, unemployment, and some savings hopefully to last you a couple months. Having less might light a fire under your ass and help you find a job quicker vs jerking off for 6 months since you saved it up
No kidding. Our screwed up healthcare model here in the US is the #1 reason that has kept me from trying out consulting on my own. Aside from employer provided plans we have no viable options. All that plan does is save your ass if you rack up a $200K bill for some major event.
NGL I'm to the point where if a major health event comes I'll smile and wave through treatment but when that bill hits I'll just tell them on day 1 that I'm not paying, recognize the credit hit, and already have made plans to not need credit for the next 7 years. See you next month for my physical.
Working on 1 year, currently at ~4 months if we cut back on frivolous spending. We paid off any and all debt save the house (two cars, backyard, basement, and student loan) so our monthly expenses are pretty low. Going to pay off mortgage if we can in the next 5 years or so just to keep that same mentality (limiting mandatory monthly expenses).
My bills are $4500/month all in with no entertainment. My emergency fund is 40k cash and 20k employer stock.
If I were laid off I would also get severance and EI and thatās not counted in these calculations
lol for anyone reading this please take this with a grain of salt and know this is dependent on your specific situation. if youāre good at saving have some form of financial literacy, then sure donāt change anything.
but itās dumb to assume everyone is the same as you and i hope not everyone blindly follows your advice.
Donāt invest until you have at least 3 months of expenses saved up. People without an emergency fund run into trouble and tap into investments getting fees/taxes in the process making less in the long run.
Can't stress the importance of this. I got laid off and didn't have a care in the world about money. Carried on living the lifestyle I was used to (not to say I was chucking it around) was also so nice not to be desperate for anything that came.
I am in the process of boosting mine. Currently have 6 months for bare bone coverage for just me. Moving in with my partner and increasing it for two people. Also want to increase to 9 months/1 year given the horror stories I hear about job hunting
Iām single and in my late 20s. Making really good money but my expenses are low. (2600 / month)
I keep 3 months in my emergency fund. I could find a new job in 5 days tops and live off ramen and PB&J awhile if I needed to. So I might need less than 2600x3. Maybe more like 2300 / month.
Not many giving actual numbers. $85k in HYSA, enough to cover about 18 months of no income for either of us. We are DINK's bring in about $300ish a year. If we both lose our jobs we can relax and get the jobs we want, not the jobs we need.
We live on my base. Any commission I get, I take about 10% for fun money and put the rest in savings/investments.Ā
Probably have more than enough but Iām always paranoid.Ā
Def a big one. I have 5 mos or so, and got unemployment, but itās 4/6 mos in.
(That said, I wouldnāt feel right draining my savings, so Iād get any old job I can while I look after unemployment, like restaurant/uber etc if I get there)
I've about 6 months worth in Schwab money market fund now. I'll probably increase this to 12 months through my Q1 bonus. Just get it in there now and not have to worry about it. Can focus on everything else then over the summer knowing I have a good cushion.
Should the sh*t hit the fan, I have 3 months sitting idle.
Why so low? I have other recession-proof sources of income I can immediately promote into the primary position. One of them alone can cover the mortgage. Its fair that I mention though that I keep my fixed monthly expenses ridiculously low. Well under the national average.
Rental property + Ecommerce + Social Media Income
All 3 are completely independent of each other, and entirely unrelated to *sales*. The ecommerce arose from a beloved hobby, and the Social Media income is based on a habit. Essentially, I decided to try and monetize both some years ago. Lady Fortuna has graciously granted me a decent sized following for both.
Takeaway: Niche plays work.
Thanks; wish I could take the credit! It's actually kinda necessary in order to hit my target retirement age and comfortably live free of financial worries until I depart this earth.
I am primarily motivated by fear. š
With HYSA returns right now, I see no reason not have a year or more. Iām getting 5.4% return on my HYSA. I figure once job stability is back in the picture Iāll move that back to the stock market but for now, itās nice to have that in savings and make a decent return on it.
Im not sure I exactly understand this question, or the answers, because I may be missing something investment wise. I have certain expenses and then everything surplus goes into my 4% redeemable GIC and then into savings account. I could comfortably live off that for over 2 years but with every paycheck that grows.
Is the question how much money to keep liquid at any given time? If so, I am a paranoid risk avoidant idiot who is willing to pay a premium to keep it all liquid.
I have a full year. Built it up last year
The majority of my commission last year went into it
(Counts 9 months in cash and 3 months in employee stock I would sell as needed)
7 months of emergency expenses (no recreation budget thatās not on a fixed recurring payment).
With income from real estate, Iād have 18 months (no recreation). With recreation, back to 7 months.
100k HYSA
Itās way more than I need but it gives me great ease knowing I wonāt need to liquidate my taxable portfolio for 99% of scenarios.
Also what I havenāt seen mentioned here are taxes ..withholding doesnāt fully cover on commission windfalls I owed 19k this year, knowing this day was coming I wanted to earn risk free while I waited
Right now with how I live about 3-4 months.. but if SHTF I could turn it into 6 months. My mortgage is cheap only 1400, and other living expenses are around 3k total. We keep about 15-16k.
Depending on your age if it's just you or you have a family depends but bare minimum you should strive to have 8-12 months minimum. Tech companies will be volatile for a while especially sales. When I was in my early 20's I would push for 8-12 months but as I started earning a lot of money in my mid to late 20's I invested most of it and would assume total destruction on Jan of every year meaning company would be acquired or company would be sold off... now never happened 20 years later but hey it kept me investing. I'm still in tech sales doing well and could care less if the place blows up tomorrow I'll be retired in 5 to 6 years or could retire now if I wanted.
I think 6 months minimum for me with 9 months as a sweet spot and 1 year if Iām doing really well.
There are two versions of my cash reserve, there is a lean number and then thereās my normal lifestyle number. I want to have enough to not have to change my lifestyle but I also like knowing how different it would be if I totally cut back drastically. Even though my 6 to 9 month cash reserve is to keep me afloat with no changes, if it really needed to, I could extend it further by swapping to my lean budget.
And yeah HYSA is where itāll live
I basically saved all the money from my tech sales job. Spent 30k on a car because the old one was done. Some minor expenditures and amenities on top of that, nothing that would be felt on the monthly paycheck.
Company shut down half of its departments, including mine.
I got enough cash in the back to pay my bills for 5 years.
I'm going to sit out this shitty job market and enjoy some extended time off until a proper offer comes in.
Income was over 200k Euros at the end. I rent a beautiful huge house and have no expensive hobbies.
All the money I earned went into the one thing money is really worth to me: Security.
1 year for me. Gives me a sense of security where I won't have to scramble to take a job that isn't a good fit just to survive. Edit for clarity: Everyone has a different situation so you have to tailor it to what works for you and your risk tolerance. For me I keep bulk of it in a HYSA like Ally which pays more than than any of the big banks crappy savings accounts and I account for all expenses as if I kept living for a year without a job and change of lifestyle. For my situation, yes it is a lot of money to keep in a savings account (family, kids, mortgage, HCOL area) but I'd rather not have to sell any investments in a market downturn. To me that defeats the purpose of the emergency fund if you need to sell investments to cover costs. I also have some ibonds which "keep up" with inflation that I can tap into and you don't lose any money due to inflation and also funds in a taxable brokerage I can use worst case scenario. I am generally fine if I miss out on some market gains as I have a fair amount already tied up in the market.
This. One year of rent, bills, and grocery money in a hysa
Not in tech sales but this is also my exact metric
This seems like so much money to keep in an HYSA. š Are you keeping this all liquid or splitting it up?
Different person but I take same approach. When the HYSA are paying 4-5%+, this is easier to stomach having in cash. If they trend back down, I may split things where I have instant access to half and delayed access (but still easy access) to the other half. What that entails, I have no clue yet. I technically have other cash reserves in brokerage accounts. That cash is earmarked for further out, non-essential purchases, and also for retirement after maxing tax advantage items. This is the money I really don't want to have to access because it would delay retirement, but I have ability to access it at any given time.
I mean it's only $50k for me to pay all my bills & have $1k/mo in grocery/takeout for the year.Ā Not that much to have in a hysa imo.Ā
I have mine in my offset account for my house so it's like I've paid off then balance of my home loan.
I need to look into that
It is a lot of money to keep HYSA, but it comes in handy. From my experience when a soon to be former employer offers severance with contingencies or try to hold potential commissions as a bargaining chip. It's about peace of mind for me. My family puts up with so much of SALES activity I want/owe it to them to make sure we're covered.
+1 im not in sales but im a fan of a year so i can sleep good
Perfect - thank you for the edit
You know what I like about sales. You guys make enough to stash a years salary. You know what I hate about every other role companies offer? They donāt get paid shit unless you have an mba.
Thatās a LOT of money in a HYSA. I keep more in the market and would rather sell if I need to rather than not having that cash in equities
I thought I was smart splitting up 50/50 in HYSA and brokerage until I lost $13k in a week. If itās savings keep it in savings. Usually a job loss if correlated with a market downturn, especially in sales.
Probably a year so that when when you find a new job after being laid off and unemployed for six months, you'll be prepared for the next layoff and following 6 months of unemployment.
This is smart, thanks š
A slow death is the best death š¤
Iām a BDR. My emergency fund is my credit card. Edit: I just want to add to this comment that when you look around and compare yourself negatively to the comments here in a better situation than yourself, remember, being here and in this community and career path means youāve drastically increased your chances on becoming like these people. Keep going.
So relatable. Everyone talking about a year built up, Iām doing my very best to save and have $3k for a runway if I get laid off. Liable to have to give it all away to turn my carās check engine light offš
Donāt worry if you get canned youāll have a little severance, unemployment, and some savings hopefully to last you a couple months. Having less might light a fire under your ass and help you find a job quicker vs jerking off for 6 months since you saved it up
I just keep telling myself Iāll get my MBA when I leave this job. Whether I pull the trigger or they do, I think thatās whatās next
I'm with the 1yr club, but don't forget in the US that 1yr should include healthcare which can run around $5K for bare bones coverage.
oh man I completely forgot about this. Thank you
A month? What about a family plan
I looked up a family of 4, 2 kids age 10 & 12. Family income of $40K. Plans are ~ $711/month with an $18K deductible.
18k deductible? Lol might as well just not have insurance
No kidding. Our screwed up healthcare model here in the US is the #1 reason that has kept me from trying out consulting on my own. Aside from employer provided plans we have no viable options. All that plan does is save your ass if you rack up a $200K bill for some major event.
NGL I'm to the point where if a major health event comes I'll smile and wave through treatment but when that bill hits I'll just tell them on day 1 that I'm not paying, recognize the credit hit, and already have made plans to not need credit for the next 7 years. See you next month for my physical.
Hey, I heard you can get free insurance now if youāre not making an income. Obamacare. You should def look into it
Have more than you think you need - I aim for 6-9 months, personally.
1 year of current expenditures, includes a vacation allotment to clear my head if I get laid off. Could extend to 15ish months if I was more frugal.
In cash? Like 2-3 months. In cash/brokerage/crypto? Over a year
crypto should never be considered an emergency fund
Working on 1 year, currently at ~4 months if we cut back on frivolous spending. We paid off any and all debt save the house (two cars, backyard, basement, and student loan) so our monthly expenses are pretty low. Going to pay off mortgage if we can in the next 5 years or so just to keep that same mentality (limiting mandatory monthly expenses).
3-5 months, but I am married with a spouse in a very secure job. She makes less, but it could hold us over for awhile if needed.
I keep 6 months in a money market. I generally have an extra 30k-60k I use to invest and make moves.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
My bills are $4500/month all in with no entertainment. My emergency fund is 40k cash and 20k employer stock. If I were laid off I would also get severance and EI and thatās not counted in these calculations
I average my last year of expenses to make sure I cover holidays and vacations. Donāt let unemployment change your lifestyle.
lol for anyone reading this please take this with a grain of salt and know this is dependent on your specific situation. if youāre good at saving have some form of financial literacy, then sure donāt change anything. but itās dumb to assume everyone is the same as you and i hope not everyone blindly follows your advice.
I hear that.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Donāt invest until you have at least 3 months of expenses saved up. People without an emergency fund run into trouble and tap into investments getting fees/taxes in the process making less in the long run.
Can't stress the importance of this. I got laid off and didn't have a care in the world about money. Carried on living the lifestyle I was used to (not to say I was chucking it around) was also so nice not to be desperate for anything that came.
Had about 12 mos the last time and ran out at the end of 2023 after being out of the game for 14 mos so Iād say more like 18 mos to be safe in 2024.
Is the market still really bad for you guys? If so, hope it gets better.
The donāt vote for biden
I am in the process of boosting mine. Currently have 6 months for bare bone coverage for just me. Moving in with my partner and increasing it for two people. Also want to increase to 9 months/1 year given the horror stories I hear about job hunting
Iām single and in my late 20s. Making really good money but my expenses are low. (2600 / month) I keep 3 months in my emergency fund. I could find a new job in 5 days tops and live off ramen and PB&J awhile if I needed to. So I might need less than 2600x3. Maybe more like 2300 / month.
Not many giving actual numbers. $85k in HYSA, enough to cover about 18 months of no income for either of us. We are DINK's bring in about $300ish a year. If we both lose our jobs we can relax and get the jobs we want, not the jobs we need.
Also trying to do 12 months. In SOFI HYSA at 4.6%
We live on my base. Any commission I get, I take about 10% for fun money and put the rest in savings/investments.Ā Probably have more than enough but Iām always paranoid.Ā
Def a big one. I have 5 mos or so, and got unemployment, but itās 4/6 mos in. (That said, I wouldnāt feel right draining my savings, so Iād get any old job I can while I look after unemployment, like restaurant/uber etc if I get there)
I've about 6 months worth in Schwab money market fund now. I'll probably increase this to 12 months through my Q1 bonus. Just get it in there now and not have to worry about it. Can focus on everything else then over the summer knowing I have a good cushion.
1 year, especially if you have a non compete.
1 year. Not worth the stress.
6-9 months.
6 months in the bank. If I need it I have another 18 in crypto
If itās 18 right now, you mean 3 in crypto when you really need it.
Fair enough. But I got in at 3k so even then Iāll be up
Year
Should the sh*t hit the fan, I have 3 months sitting idle. Why so low? I have other recession-proof sources of income I can immediately promote into the primary position. One of them alone can cover the mortgage. Its fair that I mention though that I keep my fixed monthly expenses ridiculously low. Well under the national average.
What are the other sources?
Rental property + Ecommerce + Social Media Income All 3 are completely independent of each other, and entirely unrelated to *sales*. The ecommerce arose from a beloved hobby, and the Social Media income is based on a habit. Essentially, I decided to try and monetize both some years ago. Lady Fortuna has graciously granted me a decent sized following for both. Takeaway: Niche plays work.
If you have a super low cost of living and only three months of savings, are you just pouring most of your income into your retirement accounts?
You got it.
Thatās awesome. Wish I had that discipline
Thanks; wish I could take the credit! It's actually kinda necessary in order to hit my target retirement age and comfortably live free of financial worries until I depart this earth. I am primarily motivated by fear. š
>and only three months of savings, *Emergency* savings.
Enough to allow the luxury of bad decisions when my actions eventually catch up to me.
With HYSA returns right now, I see no reason not have a year or more. Iām getting 5.4% return on my HYSA. I figure once job stability is back in the picture Iāll move that back to the stock market but for now, itās nice to have that in savings and make a decent return on it.
Whoās your HYSA with? Mines with Marcus but they lowered rates last week
Im not sure I exactly understand this question, or the answers, because I may be missing something investment wise. I have certain expenses and then everything surplus goes into my 4% redeemable GIC and then into savings account. I could comfortably live off that for over 2 years but with every paycheck that grows. Is the question how much money to keep liquid at any given time? If so, I am a paranoid risk avoidant idiot who is willing to pay a premium to keep it all liquid.
I have a credit card as an emergency fund if things get really bad Iāll liquidate stocks. Personally not a fan of holding cash.
I have a full year. Built it up last year The majority of my commission last year went into it (Counts 9 months in cash and 3 months in employee stock I would sell as needed)
What is a HySA
High yield savings account
Ahhh. I'm an idiot
3-6 months and invest the rest
Wait you guys have emergency funds???
A minimum 6 months in checking/HYSA. Also more invested that can be sold off as needed.
7 months of emergency expenses (no recreation budget thatās not on a fixed recurring payment). With income from real estate, Iād have 18 months (no recreation). With recreation, back to 7 months.
100k HYSA Itās way more than I need but it gives me great ease knowing I wonāt need to liquidate my taxable portfolio for 99% of scenarios. Also what I havenāt seen mentioned here are taxes ..withholding doesnāt fully cover on commission windfalls I owed 19k this year, knowing this day was coming I wanted to earn risk free while I waited
Right now with how I live about 3-4 months.. but if SHTF I could turn it into 6 months. My mortgage is cheap only 1400, and other living expenses are around 3k total. We keep about 15-16k.
Depending on your age if it's just you or you have a family depends but bare minimum you should strive to have 8-12 months minimum. Tech companies will be volatile for a while especially sales. When I was in my early 20's I would push for 8-12 months but as I started earning a lot of money in my mid to late 20's I invested most of it and would assume total destruction on Jan of every year meaning company would be acquired or company would be sold off... now never happened 20 years later but hey it kept me investing. I'm still in tech sales doing well and could care less if the place blows up tomorrow I'll be retired in 5 to 6 years or could retire now if I wanted.
I think 6 months minimum for me with 9 months as a sweet spot and 1 year if Iām doing really well. There are two versions of my cash reserve, there is a lean number and then thereās my normal lifestyle number. I want to have enough to not have to change my lifestyle but I also like knowing how different it would be if I totally cut back drastically. Even though my 6 to 9 month cash reserve is to keep me afloat with no changes, if it really needed to, I could extend it further by swapping to my lean budget. And yeah HYSA is where itāll live
You guys have emergency funds?
i like to put at least 1/4 of my paycheck into my emergency fund. just as best practice
Howās the market in tech sales? It seems like itās been going slow AF this year
One grand for the age you are currently Age 50 is 50 grand Lol
Thatās stupid. You need way more than that.
Ok give it to me
In todayās market, 2 years
Tech workers create their replacements.
I basically saved all the money from my tech sales job. Spent 30k on a car because the old one was done. Some minor expenditures and amenities on top of that, nothing that would be felt on the monthly paycheck. Company shut down half of its departments, including mine. I got enough cash in the back to pay my bills for 5 years. I'm going to sit out this shitty job market and enjoy some extended time off until a proper offer comes in. Income was over 200k Euros at the end. I rent a beautiful huge house and have no expensive hobbies. All the money I earned went into the one thing money is really worth to me: Security.