You can either say how many months or an actual dollar amount. I know we've polled this before but I don't recall if most people have 3 months, 6 months, 12 years, etc.
Right now I'm just planning on a 3 month efund in cash and then investing the rest of our money (once we get there) but when I see some people have large, easily accessible efunds. I'm just trying to figure out the pros and cons of each.
We have 12 months in our efund right now. Sadly that's going to decrease to about 6 months next year when (if) we sell our place, since we're taking a loss.
We usually have $5,000-$10,000 in cash at our main bank between the various accounts. We also keep roughly $10,000 cash at ING in what some may call an "e-fund". We have another savings account at ING that is just for tax savings to pay quarterly estimates. That ranges from $0-$10,000 depending on where we are in the tax cycle, but it really is not meant to be used for anything other than taxes. Right now it has $8,000 in it.
Then we have taxable investment accounts, which may or may not hold more cash at any given time as we wait to buy/sell. Don't really want to spell out the balance in there.
As we begin to get more serious about buying a house (still several years away), we may shift towards accumulating more cash or moving investments around, but right now we don't have any reason to stockpile more cash.
We have about 5-6 months' worth in cash in the bank right now.
We had twice that amount last month, but we invested half of it to try and get a better return because we'll need to pay for our foundation to be repaired in the next few months.
Would anyone mind sharing why they have X months/amount saved? 3 months is ok, right? I don't have kids and I have a secure job.
It's just a very personal decision.
We were not comfortable focusing on accumulating cash until we had a lot of other ducks in a row. We focused on maxing out retirement options, securing the right life insurance, and even buying an investment property first.
Now we are at a point where we might want to start saving more cash for a home purchase (probably 3 years off?), but will probably still invest a good deal of it.
Factors that come into play for us: young, no kids, I have a very secure job, comfortable with the market, professional experience, etc. DH and I both prefer to take some risk over the lost opportunity of having our money do nothing for us. We have lots of resources we could tap in an emergency, and honestly it just kills me to have cash earning almost 0% unless we are really taking advantage of other opportunities.
We don't have as high of income or net worth (or age) yet as others on this board, so I could see eventually getting to a point where we would desire to have $50K in cash, but we're not there right now.
One year of DH's base salary since I don't work. We feel more comfortable with a larger than average cushion because if he lost his job it would most likely take time for him to find a new one and we would definitely have to move out of this area. We have a lot more in there right now and that is my goal for next year: to get serious about investing!!! lol.
Would anyone mind sharing why they have X months/amount saved? 3 months is ok, right? I don't have kids and I have a secure job.
DH out-earns me by 2.5x. His job is very secure, but if he lost it we'd be screwed so we have a larger-than-average e-fund. Too big probably - we could get by with less but ditto PP that I just lack motivation, it's easier to just sock money away in savings by doing transfers between our BOA accounts. We have about a year of normal budget saved, it would stretch to more if we pulled the kids out of daycare ($1400/mo alone).
Would anyone mind sharing why they have X months/amount saved? 3 months is ok, right? I don't have kids and I have a secure job.
Honestly, it's misleading for me to say that it's strictly my e-fund. It's basically our general savings account and the funds can be used in an emergency. As I said, we're going to use half of it to sell our condo. We'll keep adding money to it, and will pull it for other things if needed (vacations, new car, future down payment). I guess I don't feel entirely comfortable investing it at this juncture, since we plan to use it.
We have a kid and my husband is freelance, so I wouldn't feel comfortable having less than 6 months worth of expenses stashed away.
I was proud of mine until I read this poll. Oh well, we have $10k for now but we're focusing on debt. We have other savings that I guess could count as an efund too.
In our efund account we've got about $10k. We had a lot more before our downpayment and new car purchase, so the numbers can be totally misleading just FYI. I prefer to invest more aggressively at this point and $10k would get us a few months bare bones.
More than 12 months, divided between an ING account and an investment account.
I am self-employed, DH makes several times my salary, and we have a mortgage in one city and would have to pay rent in another if he suddenly lost his job tomorrow (his work pays our current rent). The amount in our e-fund is what we feel comfortable with given our situation.
Around 12 months right now, but I'm in school part time and over halfway done, so at this point even if I lost my job I would want to finish the degree (hopefully without student loans) so the 12 accounts for that. Once I'm done with school, I plan on upping retirement contributions and getting back to 6-9 months. HCOL with no family within 2-3 hours makes me want to have a decent safety net.
Enough to get us 5-6 months if H lost his job. He makes more than twice as much as me but that's not hard because I make barely anything. Also H has a ton of SL debt that we are overpaying on monthly in order to chip away at it. At the rate we're going it'll be gone in nine years I think. So we'd have more in the efund were in not for that debt.
For someone earning a regular income/salary, I think 8 months is plenty because that's supposedly about the average amount of time it takes for a person to find another job. But everyone has their own magic number that makes them feel secure. We chose 12 months because of our income volatility. Some months we'll bring in 6x our average monthly spending and other months we don't bring in enough.
We have 12 months of mortgage payments as it is by far our largest expense. If I lose my job we could probably get by on just DH's salary if we scaled back, but if he loses his job we wouldn't make it on just mine. It is probably more than we need, but I can't bring myself to reduce it.
For ppl that keep more than 2-3 months in an efund are your other monies in retirement accounts or do you have non retirement savings in investment accounts too? If you don't, are you nervous about investing it in the market or are you saving it for a certain short term purpose? I'm asking bc I can't imagine keeping a number over like 30k or so in pure savings if you have access to other non retirement funds if you needed it
I'm interested in the responses to this.
We have too much in cash, I think, but my experiences with investing have been so poor. I've tried to ask on this board but haven't gotten straight answers: how do you REALLY get income off of non-retirement investments? In 2005 I put $4k into an index mutual fund (I was following the advice of Suzie Orman, LOL!) in an attempt to actually start non-retirement investing. Then the market went down and we *still* have a loss on that mutual fund; it has NEVER made us money.
So what is this magical non-retirement investing that you all do to earn higher returns on money than, say, ING? My experience with that index fund has put the fear of God in me about ANY shorter term (say less than 10 years) investing.
Help me overcome this fear with some inspirational stories and some good market tips!
ETA: I was always jealous of AnKa and her FIL who gave them specific stocks to buy. She seemed to earn a lot of money just off those investments.
So what is this magical non-retirement investing that you all do to earn higher returns on money than, say, ING? My experience with that index fund has put the fear of God in me about ANY shorter term (say less than 10 years) investing.
Help me overcome this fear with some inspirational stories and some good market tips!
Well this year the S&P was up 12.76% through last Friday, the Dow Jones up 7.67% and the Nasdaq 14.31%. So shares of a basic index fund like SPY would have handily been ING (which is less than 1% right now in comparison).
I like large, stable companies that pay solid dividends and make money. Preferred stocks have treated us very well. I use a mix of individual stocks and ETF's, but I fully admit that I have a higher tolerance for risk as well as comfort level with investing given my job.
Diversity helps as well. I have no idea what fund you bought, but the markets are up since 2005 so it may not have been diversified enough?
We keep way too much cash -- like 12-18 months expenses. I know it's ridiculous, but it's a weird psychological thing with me. It is split between a BofA money market and a Vanguard money market. We also have non-retirement savings in a couple different Vanguard mutual funds and bond funds, as well as some individual stock.
Yes, another key is NOT TO PANIC. So many people got scared during 2008-2009 and pulled out of the market- at the worst time. They should have been BUYING as much as possible. Not only did they sell low, but they also didn't get back in time which means they missed the very solid recovery. I was loading up on stocks like GE in 2009 around $9 and it has more than doubled- plus paid a solid divided all along the way.
Don't try to time things, especially if you are not a professional investor.
We have a bit over 8 months expenses between a savings account and brokerage account. 75% of that is in the savings account. We need to shift more money into investments.
We have about five months' salary earmarked as an "emergency fund" in one of our bank accounts, and maybe 3-4 months' worth in investments (not counting retirement). We also have funds earmarked for other things (vacations, vet bills, home improvements, etc.) that could be used in an emergency as well.