sage_green•1d agoProlific Poster

A friend told me my emergency fund was way too small and it freaked me out

I always thought having a couple thousand in savings was fine, you know? Just enough to cover a car repair or something. Then my buddy, who works as a financial planner, looked at my budget over a beer and said, 'Dude, if you lost your job tomorrow, that money would be gone in under a month. You're one bad transmission away from a credit card.' He was right. I live in Denver, and my rent alone is $1,800. I did the math and realized I needed at least six months of expenses, not just a random number. I've been putting 20% of every paycheck into a high-yield savings account for the past four months to build it up. It's tough to see that money not get spent, but the peace of mind is huge. Has anyone else had to totally rethink their safety net amount after a reality check?

3 comments

3 Comments

charles_mitchell1d agoTop Commenter

Sounds like your friend needs to chill.

miles_burns22h ago

Agree with charles_mitchell a bit... that six month rule seems over the top for everyone. If your job is steady, a couple grand for real emergencies is probably fine.

wendy13116h ago

Yeah, the "couple grand" part made me remember a blog post that basically said emergency funds are super personal. What works for one person might be overkill for another.