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Post by kygirl on Jan 20, 2011 18:23:27 GMT -5
I'm in a very stable industry and work for a company that thankfully didn't lay anyone off during the recession. We also still received pay raises and bonuses. I picked 9 months, because it is what I am comfortable with. I figured I could most likely last a year or longer on it if I do receive unemployment and/or if I cut back on expenses. I've saved a full 9 months of bills as is, and even included spending money in the calculation. For my sanity, I'll need to still hang out with my friends.
I thought I would feel very satisfied and secure when I reached my 9 month goal. Instead, I can't let go/stop contributing to it. I'm not sure why.
Thanks for the list Urban Chicago. You are correct, I am currently at #6 (no kids yet). I guess my main question is whether I should now max out the 401K or if I should instead focus on a taxable account?
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schildi
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Post by schildi on Jan 20, 2011 22:03:04 GMT -5
I guess my main question is whether I should now max out the 401K or if I should instead focus on a taxable account? You should definately work on a Roth IRA if you qualify. I would even do that before / in parallel with an EF. The reason is that even in the worst case, you can turn around and use the Roth contributions without a penalty. But if you do the EF first, and no Roth, you can't go back and fund the Roth for past years.
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dividend
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Post by dividend on Jan 20, 2011 22:59:27 GMT -5
No, but I might cut out that extra bottle of wine, eat an additional meal with eggs as protein, instead of steak, or salmon or shrimp. I might not buy the artisan cheese, and opt for the block of cheddar. I might cut coupons or shop sales (after all, I am out of work. I've got time.) I might make spaghetti every week, instead of Chicken Marsala. I might only buy the cereal that is on sale, instead of our favorites at all cost. I might make our bread from scratch, or other meals that I currently take expensive short-cuts on. I could easily cut 25% out of our grocery budget. I don't currently live that way, because I don't have to. But, if our lifestyle changed, so would our grocery budget. What she said. For example, this week, if I were unemployed, I would not have bought the $7.99 box of clementines, the 5 avocados or the honeycrisp apples, and would have swapped organic for conventional on bananas, orange juice, frozen berries, bell pepper, and carrots/celery. I know that my grocery budget is a little high, but I don't care right now, because I can afford some luxuries. If I had no income, well, then I'd have to care, and I'm confident I could trim it. (Particularly if we gave up fancy beer). So I use the trimmed number in my "poverty budget."
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WannabeWealthy
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Post by WannabeWealthy on Jan 21, 2011 10:41:06 GMT -5
Hi everyone. I currently have about 9 months saved in an EF, and although logically I think it's plenty, I can't seem to stop putting money into it. For those of you that have felt this way in the past, what finally allowed/helped you to get over the fear of not having enough saved? Nope. I'll save up $25k and then forget about it. I need to use the extra money for investments that make real money! -M
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Post by kygirl on Jan 21, 2011 12:13:00 GMT -5
Hi everyone. I currently have about 9 months saved in an EF, and although logically I think it's plenty, I can't seem to stop putting money into it. For those of you that have felt this way in the past, what finally allowed/helped you to get over the fear of not having enough saved? Nope. I'll save up $25k and then forget about it. I need to use the extra money for investments that make real money! -M This is the amount I just reached. It's plenty and I know that. I just can't stop.
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thyme4change
Community Leader
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Post by thyme4change on Jan 21, 2011 12:14:43 GMT -5
Does the phrase "a great interest rate of 1%" mean anything to you?
I think you can do better!
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cronewitch
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Post by cronewitch on Jan 21, 2011 13:56:47 GMT -5
Most emergencies don't require instant money in great quantity. A few do like emergency vet visit if they don't take credit but most don't.
An example is a broken furnace, all the furnace store and order one. You can charge it on a credit card and have about 4-6 weeks to pay or ask the furnace store to finance. If you need to take a second job or sell some stock to pay for it you have a bit of time.
A job loss of say 9 months cost gradually 1/9th per month not all the first day. You might only have 1 month wages in savings but be living on less than 100%. You only need to cover half your prior wages or less after unemployment so it could last much longer than a year.
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DVM gone riding
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Post by DVM gone riding on Jan 22, 2011 15:53:12 GMT -5
Start a taxable brokerage acct with the funds-consider it an extension of your EF just a little bit further away but still highly accessible in case of total catastrophe.
What I did was this: 401k for match Then fund EF-6 mos (though I have changed this up some now) Roth fund started increase 401k to 5% increase Roth to half max some funds in brokerage acct increase roth to full funded
I started with no consumer debt-I have SL and mortgage both at low rates, and a car loan at an ultra low rate.
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Peace77
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Post by Peace77 on Jan 24, 2011 11:01:39 GMT -5
Do you have short and long term disability insurance? If not, buy them.
Next, I suggest to max out your 401(k).
The 9 months worth of expenses should include all of your current expenses. You might be able to cut out the beer and wine but you may also have other expenses that you can't imagine at this point. If you are too sick/injured to go to the store, you may have to pay for groceries to be delivered. You may be unable to cook from scratch and have medical bills on top of your usual expenses.
If you are out of work due to your health concerns, you are not likely to be collecting unemployment.
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Post by boosmom on Jan 24, 2011 19:56:39 GMT -5
So for all you folks that keep a minimal EF, how would you go about putting $25K into the market? $2K per month into the market to avoid to major market swings?
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