Memes

6 months expenses, not 6 months salary.

Didn't anyone notice during covid these "highly responsible business people" couldn't make it a couple months without the "to big to fail" bailouts or free covid money?

It isn't 6 months salary, it is 6 months worth of expenses

So if I want to accomplish this in a year I should be putting away half of every paycheck? Between rent, bills and groceries, who the fuck can afford that?

I don't have 6 hours of my salary in savings most days.

I'm nearly there, I'm about -8 months away!

I had 9 months saved in 2020. I'm taking out loans this month because it's at zero. It's been a hell of a ride. This economy is fucked though.

In what universe is this even possible for most people? Because it's not this one.

I honestly think the "6 months of salary in an emergency fund"-advice is a bit overblown and certainly not universally applicable.

An emergency fund must per definition be very liquid in order to fulfill its purpose, hence you can only really place the money in a simple savings account with a not-so-spectacular interest rate. This means that the opportunity cost of having 6 months of salary in an emergency fund is the delta of expected return on investment in a higher-yield method of savings, such as placing the money in index funds. This can be quite significant, in particular since saving up 6 months of salary is not an easy task for the average person.

If you had the money placed in investments, the money would be less liquid, and there's the chance that you may have to liquidate it during a downturn, which would of course suck a little. Consider carefully under which scenarios you would have to liquidate, though:

• Lost your job? I have unemployment insurance to cover this scenario for me, meaning that I will get 80% of my current salary for close to a year, a period during which I would have to liquidate nothing.
• Disaster strikes my home? My home insurance policy covers this more than enough for me.
• Medical emergency? I'm lucky enough to live in a country where health care is free, but I have additional health insurance on top of that as well.
• Emergency while traveling? I have great travel insurance. They cover all medical expenses and would even fly me back home post-haste in disaster scenarios.
• Other accidents where I hurt myself? You guessed it, I have insurance for that too.

Now, there's an argument to be made that these insurance policies might be a bit slow to pay out, and that I might need to be a bit more liquid to cover the expenses temporarily. I have a solution for that too - credit cards. With credit cards I can make a short-term loan that should bridge over most issues until I can either get money from any of my insurance policies, or worst case have time to liquidate some of my higher-yield investments.

So yeah, that's my plan. It does not involve 6 months of salary being invested in a low-yield savings account, because that'd lose me a lot of money. I dislike the fact that the 6 months emergency fund is basically parroted as religious gospel, and it feels like people who repeat it have not thought about the issue thoroughly.

Meanwhile giant megacorps after 2 weeks of lockdown go bust bcs free money.

Multiple times now, I've had people on Lemmy tell me that I am either not caring about my future or not caring about my child's future because I buy myself an occasional chai latte and her an occasional smoothie or some Taco Bell food.

I hate this idea that you should deny yourself any and all pleasures in life so that you can have a decent 10-20 end-of-life years when you retire. People made fun of the avocado toast guy, but suddenly now he's got the right idea?

I'm not going to have major retirement savings if I put the maybe $20 a month at most that this costs and it makes our lives a little less miserable right now.

I'm 38 and I just achieved that goal.

Don't stress about this shit (too much).

Go to concerts, take trips, eat your avocado toast. Indulge.

You're only young once, and everyone is poor in their 20's. Unless you're lucky or it's given to you.

It sounds trite, but success will come. However you measure it.

Yeah man I got it saved up and then some, I was able to stretch it 11 months without work most of last year. I got lucky.

Nobody else I know has that luxury.

I bet less than 25% of people actively do this. It's not that easy to do lol

I got 12k debt and 300 in the bank haha

6 month of work just sitting thete getting eaten away by inflation doesn't spund smart. Either invest that shit or boof that shit while getting your dick sucked.

Pretty fucking difficult when you're living paycheck to paycheck

You should have an emergency fund. You never know when something bad will happen. For all you know your house could get bulldozed or you car could get damaged by something the insurance doesn't cover

My "emergency fund" is basically whichever of my organs I can sell.