(Closed) homeowner bees: do you have a 6 month emergency savings?

posted 6 years ago in Home
  • poll: do you have an "emergency" savings account to get you through 6 months of living expenses?
    Yes : (69 votes)
    18 %
    No : (44 votes)
    12 %
    PFFFT, no where close! : (75 votes)
    20 %
    We have a little saved up, but not 6 months worth : (86 votes)
    23 %
    We have about 6 months saved up : (21 votes)
    6 %
    We have more than 6 months saved up : (42 votes)
    11 %
    We have more than a year saved up : (37 votes)
    10 %
  • Post # 62
    Member
    1843 posts
    Buzzing bee

    I agree that 6 months of savings is a very good goal that everyone should at least have in mind even if it isn’t really practical. I currently own two ones (one rental and one duplex)  We have a solid 2 months saved up, but I also have a few sources of income that will persist if i loose my business/job/rental income etc.If I were to get hurt and not be able to work for a few months (or if I wanted to take off for three whole months when I have a baby in Sept like is my plan) we will do just fine with our savings and the residual income

    Post # 63
    Member
    333 posts
    Helper bee
    • Wedding: August 2011

    We are both in our early 20s and not from particularly wealthy families.

    We bought our first home last summer and we have enough savings in the bank to cover roughly 18 months of our mortgage or 10 months of all living expenses.

    We are also careful to make sure that all our necessities (bills) can be covered by one of our salaries so if one of us was to lose our job, we would still be able to cover the basics – although things would be very tight for food and we would have no ‘fun’ money. This is also how we manage to build up savings fast, as essentially the majority of one salary is going into savings/paying for luxuries.

    Post # 64
    Member
    1401 posts
    Bumble bee
    • Wedding: November 2011

    We don’t have that saved up right now, though we’ve had up to a year’s contingency saved in the past (before we paid for our wedding, bought and then furnished our flat, had twins, and paid a month’s worth of bills for my permanent residency visa in the UK), and now it’s our goal to get 6 months’ worth of cushy living into savings, which would be around £15k. At the moment, we can comfortably put about £500/month into savings and have been doing so for about a year, which means it took us a year to save two and a half months’ contingency… It’s no small undertaking getting 6 months’ worth! Very worthwhile, though–I’m a big believer in cutting out a few niceties while it’s a choice so that I don’t have to freak out if unexpected expenses come up.

    This year, we’ve decided to increase the amount we put in savings so we live only on DH’s old salary (he’s getting a big raise this year) and put the extra plus all of my maternity pay into savings. The 6 month thing is definitely hard to work toward if you want to maintain a standard of living that maxes out your paycheck, though. We actually decided two years ago to not count my earnings in our monthly income that we regularly spend because we wanted to be used to just one salary if I ever decided to be a Stay-At-Home Mom. Now that I literally can’t afford to return to work because of daycare costs for twins, I am so glad we did that! We’re living beneath our means to put money aside (and honestly, we live in one of the most expensive cities in the world on a charity worker’s salary, so we’re not living large on DH’s paycheck), but it doesn’t feel like a burden because we’ve structured our lifestyle to make that possible. We still do yearly international holidays and have the occasional splash-out on a nice dinner or outing, but we’re pretty tight on habitual expenditure (we shop at Aldi, don’t own a car, make dates to have drinks or coffees out with friends instead of lunch or dinner out, etc). 

    Post # 65
    Member
    2522 posts
    Sugar bee
    • Wedding: November 2013

    My husband and I have enough to technically get through a year and change.  We’re planning on saving up more and then beginning to save for a downpayment on a home.  Part of the money we have is invested so we don’t want to touch it.  I really doubt, unless you live in NYC or San Francisco, you’d need $30k as a 6 month emergency fund.  Our 6 month goal is $15k and we live in the Bay area–that’s rent, car/renter’s insurance, food, gas, and phone if I remember correctly.

    I feel like if you have a home, there’s such a greater risk associated with that that one should have a 6 month emergency fund.  I’m not being snarky, but job loss and home repairs do coincide.  A lot of people find they have “bad luck” when it’s really just life.  I’m just one of those people who doesn’t like risky situations.  It’s a priority thing for us personally and we’ve made sacrifices in many ways to lower our risk if something bad were to happen.

    Post # 66
    Member
    706 posts
    Busy bee
    • Wedding: October 2011

    We had 6 months + our down payment. Then, after we bought our house, our 6 months ended up being halved just due to life getting in the way.  We’re on our way to rebuilding, though.  

    It’ll take us about 10 months to get back to 6 months living expenses in savings.  It would be sooner, but we’re also saving up for our 2015 Roth contributions as well as yearly savings (like car insurance, home insurance, property taxes, etc).

    Post # 67
    Member
    9544 posts
    Buzzing Beekeeper
    • Wedding: August 2013

    We do and it made it a lot less stressful when my husband lost his job before the wedding. After going through that, I think we’ll always try to keep at least that much in easily accessible investments. We’d rather have a smaller house and second hand furnishings and know we can weather job losses/medical concerns/etc. We’ve also discussed that we would want 6-12 months if eithere of us were going to stay home with a baby. But that’s us. I have plenty of friends that went for nicer hosue/car/whatever and don’t have as much in savings and I don’t judge at all – just different preferences and priorities.

    Post # 68
    Member
    794 posts
    Busy bee
    • Wedding: December 2011

    I think we have about 9 months of savings if Darling Husband lost his job.  When we moved in we had NONE of that.  It has been about two years buildup to have that savings.

    Post # 69
    Member
    13595 posts
    Honey Beekeeper
    • Wedding: November 1999

    I think having a sizeable savings account is important when buying a house.  You don’t want all of your money tied up in the house, so if something happens, you’re stuck. 

    I definitely don’t think it’s snarky advice, nor do I think it’s ridiculous.  To be honest, I think it’s a little insane to go into something as big as homebuying without an emergency fund (whether its 3, 6, or 12 months).

    Post # 70
    Member
    1633 posts
    Bumble bee
    • Wedding: September 2010

    @dirtylittlesecret:  I only read your original post…I don’t think the 6 mos emergency fund is a snarky comment at all. I have heard that advice for years- minimum 6 month emergency fund for anythingbthat can happen to you. Not just for homewowners. When I was renting and I had an emergency fund. If I lost my job how else would I have been able to pay rent and live while looking for employment?

    I wouldn’t have agreed to purchased our home under the circumstances that you described. Too risky for me.We furnished our home some with cash (instead of putting it all into a down payment) and some using interest free CC and paid all of those back within the interest free time period. that allowed us to keep our non-negotiable/ emergency only savings fully funded and use current income as it came in to pat off the CC. Some would say buying furniture instead of using all available funds toward a down payment was silly. That’s fine. But, those who would say that to me are not starky. Just giving advice.

    Post # 72
    Member
    7371 posts
    Busy Beekeeper

    That isnt snarky its just really the financially prudent thing to do. Our financial situation isnt anywhere near that reality of having a six months cushion, but that is the goal.

    We now have an modest emergency fund and frankly its been a life saver. Nothing like having a sudden need and not having to panic about what to do. I love that feeling and its encouraging me to step really up our savings. For years we have been living on the edge, no more it sucks.

    Once you get a glimpse of the other side, the excuses tend to stop and you make the necessary lifestyle adjustments. I started out with $25 a week but I would dip in frequently so I never amassed a good amount. I got serious and upped my amounts and stopped dipping. It builds up  steadily. Some people that build up a significant savings aren’t always just lucky or benefit from being boosted by their parents. They put in the effort and limited their need for instant gratification. I’m now seeing first hand where there is a will, if its important enough, you will find a way.

     

    Post # 73
    Member
    7371 posts
    Busy Beekeeper

    @ExcitedScaredBee:  +100 home maintiance is not a joke. I would never go into that with less than six months living expenses saved up. We rent in a private house currently and arent looking to own anytime soon for that exact reason, how would we handle repair costs? Recently there was an issue with the pipes, it had be addressed ASAP it cost over $2K to fix. If you dont have that pay what are going to do? Plumbers dont do layaway as far as I know.

    Post # 74
    Member
    3859 posts
    Honey bee
    • Wedding: October 2013

    It would take us forever to save that amount! We saved up enough for our house and were left with about 5k after that… now less since we have had some home expenses. We save every month but it seems we save toward a goal (wedding, house, currently honeymoon), and then are left with little savings after we spend it on our goal and then start again. I mean we pay over $700/month in student loans so it is very hard to save a bunch for our goals AND for an emergency find. I wish we could but it is not the reality 🙁

    Post # 75
    Member
    1986 posts
    Buzzing bee
    • Wedding: June 2012

    Literally this month we reached our 6 month emergency savings goal!

    It’s the tighten your belt version though- and we intend to keep on going.

    I grew up below the poverty level- and saving is crazy important to me.  I think 6 month emergency is pretty standard advice and I agree with it- you also have to realize that you don’t need as much as you think you need.  When something happens you can tighten your belts pretty quickly.  Our 6 month emergency fund is not what we make in 6 months (although eventually we will save enough for that too) it is what we need to get by for 6 months.

    This is adjacent to paying off my student loans- I’ve been paying for two years now and hope to be done by mid 2015, I have 3 of the 5 paid off.

    I also just got my “adult” job.  We are not upper class by any means but I count us very lucky because we both have good jobs right now.  

     

    Post # 76
    Member
    327 posts
    Helper bee
    • Wedding: June 2014 - Excalibur

    I have years worth of savings. I put $15% down on my house in an affordable area, don’t have expensive cable, no loan on my car, car insurance and homeowners insurance come once a year so it’s discounted.

     My expenses for 6 months would only be able $5650 so I have tons of cushion if anything were to happen.  FI pays my phone bill and for groceries and had no savings so I don’t factor those expenses into the Russian.

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