For the Love of Everything, Please Keep 3-6 Months Worth of Money for an Emergency Fund (If You Can)
I left my job about two months ago, and I applied for unemployment immediately. I got a new job today, but I STILL haven't gotten my unemployment decision. Additionally, my food stamp application was delayed due to personal circumstances. In short, had I not had money saved for an emergency, I would have been mega-screwed.
I know some people are not in a position where they have the luxury of storing away significant amounts of cash but, if you are, I beg of you to do so if you aren't already. I can't imagine what position I'd be in right now if not for my budgeting.
Thanks for coming to my TED Talk.
PS. I posted this here instead of in c/finance because the sidebar there specifies that it's supposed to be for finance-related news.
Same here, my friend. I have a feeling that anyone who can is already doing so, or at least have a second car or something they can sell if times get hard. Most of us don't have shit to fall back on.
I would love to. But when you’re stuck in perpetual minimum wage and your rent alone is costing you at least half of that… yeah. I am not arguing by the way, you’re absolutely right, it’s just that, for a lot of people, myself included, dare I say, the vast majority of people people, this is not something that is possible.
Yea let me just go to the fuckin money tree and harvest 6 months of income to put in savings... Where the fuck is that supposed to come from? Wtf is this wall street journal privledged ass fucking advice?
If only we actually lived in the Animal Crossing universe.
(For those unfamiliar, in the game Animal Crossing you can actually "create" money trees that you can harvest from every so often, and how much you get is dependent on how much you initially "invest")
I've been unemployed for 6 months now. Resigned from my old job because I was fed up with how I was getting treated. In hindsight, it was probably a rash decision, but I never expected that getting a new job, with all my skills and experience, would be this difficult. I completely chew thru all my savings, sold half of my stuff, and even ended up borrowing money from my folks to survive. I'm glad my parents were able to help me out, but I feel pretty bad asking them for money when they've been retired for years, and it should be me supporting them instead. It really sucks, it feels like I failed my parents and failed at life, especially when I keep hearing stories of how well off my cousins are, how they're married, own a house, own a car, have kids etc and meanwhile I'm still single, flatting, and don't have any assets worth mentioning. Sigh.
Keep your head up! Its definitely stressful being between jobs. I just experienced that this year, however mine was forced on me when the company let a bunch of people go to save costs/restructure. I guess the good part there was it included severance. It took me about 3mo to find a new job, but holy hell those months were super stressful. I cut out all extra spending, switch to minimum payment on my loan, dropped services we didn't need and of course stopped buying stupid shit.
No idea what you do, but my line of work can be remote/on-site and I thought finding a remote position from anywhere would be easier, but ultimately started looking at local companies with some on-site. This turned out good for me because of everyone's push to be full time remote.
Thanks, I appreciate your kind words. I'm in IT (sysadmin) and would prefer to work remote, but tbh I don't really care at this point. At first I was a bit choosy because of my overconfidence, but now I'm open for anything - even part time, short term etc - across the whole country even. Applied for several dozens of jobs so far, only had one interview call and I blew it - my mind went blank on a simple python question, although I nailed the rest of the interview, I guess they weren't impressed when I said I knew python (which I did, but.. oh well). I do have another interview coming up, but my confidence has taken a big hit. I used to think I knew this shit inside out and companies would be lining up to hire me, but boy was I wrong. It's come to the point where I'm willing to take a 40% paycut and go back to tier 1 roles.. not like I haven't applied for tier 1 stuff but I friking didn't even get an interview call, or let alone a rejection mail, so yea, I'm seriously doubting myself at this point.
That's pretty similar to my experience, although I'm maybe slightly less seasoned than you in terms of experience. I wasn't exactly expecting to get a new position immediately, but given all the talk in the media of a needy job market, I had a pretty damn hard time getting so much as a call back from most places.
If you run into a financial ditch and don’t have emergency funds, contact the electric, water, medical, phone, credit card, etc. billing departments right away. Don’t wait until after you’ve already missed a payment or two! Jump right to it and set up payment plans. I helped a friend through a financial crash and was impressed how much leeway billing departments will give you if you reach out before you miss a payment.
1–3 months is enough for other developed countries other than the US, due to unemployment benefits, social security and most importantly: at least 3 months prior to termination a required termination notification.
Anyways: due to the current high interest rates it might be worth it to put more money into your savings account, since the opportunity costs compared to company shares are low.
My experience in the netherlands is that there is usually some delay, but not more than a month usually. I used to go in and out of unemployment a lot when I had just dropped out of college. Lot's of temp jobs. It was very annoying. But the unemployment money started accumulating right after you got fired. Only thing was that it could take a few weeks before they payed out.
But, I know we get far less money than in many other places. It wasn't even enough to cover rent so I had to use savings.
Now I'm on disability and it's less than half what people get on minimum wage. I know from my support group that disability is harder to get in the US but it's also pays a lot more money.
You can also do short term investment like T-Bills or CDs too. Just make sure they're maturing regularly. For example you could split your emergency fund into 8 chunks, and buy an 8 week T-Bill every week for 8 weeks. If you ever need the money stop reinvesting them and you'll get 1/8th back per week for 8 weeks.
The other benefit of having a proper emergency fund is being able to say no to your boss without any fear. It took me 10 years but I have enough accessible funds to go a year easily without any new income. The freedom at work is so nice. I've noticed that my confidence at not needing the job makes them take me way more seriously and offer all kinds of benefits they don't afford everyone.
I just switched jobs, I'm gonna have like $15 in my account when my car insurance gets taken out today lmao, it's rough till you get that first paycheck
One tip I heard when I first got a job is if you go shopping and pay with a debit card, don't be afraid to get $10-20 cash back just to throw in a rainy day fund. Granted the person that told me this used it to hide money from her husband but the point still stands.
Always keep emergency/rainy day money because you never know when you'll need it