- 3 years ago
- Wedding: September 2013 - B&B
So I have often heard of the ideal “6 months of living expenses backup” savings. My DH and I are pretty good at saving, but recently we just bought a house and had a wedding so we’re pretty low at the moment, and I can’t wait to build it back up!
I figure that roughly every month, we are saving $500 for our future home (we did just buy a house but it’s an income property) and $300 for just “savings.” To me, being 25 and 26 years old, with student loans, two cars, regular bills, extra life insurance, the mortgage, this is great! (I have also built in a $100-$200 buffer into the regular budget for “oh crap I need new tires” and “I forgot there’s three birthdays this month!”, so that $300 is pretty constant as true savings).
But I ALSO just figured out that the $500 a month (which I will be honest is ALSO for the current house, aka the roof starts leaking oh crap) comes from our tenants, so that won’t always be $500 EVERY month. Between the equity in the home and $500 a month, hypothetically in 3 years we should be able to purchase our dream home. Since shit happens, I’m planning on 5-6 years.
Going off of that, I just figured out that for 6 months of living expenses, that extra $300 a month will take us SIX YEARS to build up that fund.
SIX years of no vacations, no big purchases (like a new sofa or bedroom set), nada. I mean, in six years a lot can change: we could both get paid a bit more, we should pay off at least ONE vehicle, a couple of our other bills (small ones, like a $50 CC and two of DH smaller loans should be paid off in a year). And there’s always tax returns (assuming we even get one, we don’t know with the income property yet…) to help pay down big chunks of the other things or sock away, or use for those big purchases.
But to me I guess although I knew we were saving well, six years is still a shocker!! And I am willing to bet kids are going to enter the picture before six years, so even if we get raises and pay down SOME loans, kids will be a BIG added expense.
My question to the bees: how many of you have 6 month living expenses? What were some of the ways you got there? Did you do it all on your own or with help? Do you bounce back and forth between 6 months and say, three, because you dip into it for things like a nice vacation every other year?