I know this is just a meme, but I think it’s an important clarification: The rule of thumb is ~6 months’ worth of expenses, not salary. It really is important to hold you over in case of sudden job loss, since it takes most people 3-6 months to find a new job (but it doubles as a fund for genuine emergencies too, which can save your ass for stuff like unexpected medical or vet bills).
But unfortunately, lots of people live paycheck to paycheck, so for them, a month’s worth of expenses is the same thing as a month’s salary…
I’m friends with a woman who makes six figures. She’s always broke. She lives in a very expensive part of the country, but she always has to go to every big show. She travels all over the world, at least two major vacations every year plus smaller in country trips. She’s got a bedroom in her (rented) house with no bed, the whole room is for her clothes and jewelry. Blows my mind. No savings. She’s in credit card debt. If she’d just chill for six months she’d be so set.
Sounds like she is enjoying life, but that stops at the credit card debt. Thats just dumb.
It is good advice if you can save the money. One of the things I learned when I was desperately poor is you must lean on your community of other poor poeple. Trading favors is how we survived. If my friend didn’t have enough for food we fed them. We worked on each other’s cars. We had to live close to each other because we didn’t have gas money or reliable transportation. It sucked.
Now that I have escaped the poverty trap and have an emergency fund, it’s like I’ve activated a cheat code. Everything it easier when you have immediate money.
Once you’re out, reach back in. (You probably already do)
Give things away on Buy Nothing groups. Offer your car fixing services or what you can.
Did your friend find success too? Are you still friends?
A few of them, we are still friends, and they did find their own success, but most of them I have no idea what happened after I moved away. A lot of these friendships were born of necessity and only surface level.
More realistically, 3 months of expenses, not 6 of salary. Maybe go higher from there if you’ve paid off debts and stuff.
It’s unfortunately very difficult to achieve for many, and impossible for some. But if you can, you absolutely should have an emergency fund.
Some people can but don’t, either due to lack of financial education, lack of impulse control, or feeling they have to spend a lot to be happy.
Shit happens in life, from a broken boiler or car to a job loss. If you can, please build an emergency fund.
More realistically, 3 months of expenses, not 6 of salary.
it’s the same picture
Like I said, it’s difficult for many and impossible for others.
No the key is to have a minimum wage job. That way you only need $7k
Honestly though, you only need 6 months of necessities (housing, sustenance, and things needed to find another job or travel to supportive friends or family.)
I call it Cadillac Advice. I was telling someone I was looking for a used car when I was like 17, and had a part time job, clearly still a kid. And they told me they had heard this and gave me the valuable advice of how to find a Cadillac dealership. I didn’t even know how stupid this advice was as a kid. I was just confused. Like ‘I guess this guy’s so dumb he dosen’t know what a used junker car is. Weird’’ anyway, I bought a Pontiac T-1000. Which you’ve never heard of or seen because that were all recalled a few months? Years? After they were originally oftered to the public. An old guy I didn’t know had one in his garage somehow, totally forgot about it for a few decades, then died. His wife wanted me to clean out the garage for a few bucks. I took the car as payment. Believe me, she made out like a bandit. That car nearly killed me a good few times. And the $50-$75 dollars I used to fix it up was a total loss.
T-1000
nearly killed me a good few times
Hmm…
I’m one bad sickness or injury away from being financially bankrup
Isn’t it supposed to be expenses not salary? That’s what I’ve been told at least.
When Your living paycheck to paycheck, it’s the same.
My old coworkers spend all their money, which is mental imho.
Had a guy there that bought a new pc for €4k and then he ended up being between jobs so he had to borrow money from his dad.
I know we all wanna have some fun, but with such big expenses you gotta keep some buffer…just buy it 2 months later to be safe.
I declare bankruptcy
Real talk? This shit is out of reach for most Americans. The best you can do is make sure you maintain a low amount of debt. It’s better to live paycheck to paycheck if it means reducing any outstanding liabilities. If you’ve got a decent enough credit score, banks’ll have no problem bailing you out of trouble with a quick loan or a credit card or a payment plan. The problem really comes if you’re already heavily making use of debt, and then something goes wrong.
0*6=0.
Done. I’m crushing it.
I finally got up to at least three months, but then had to fill out FAFSA so I can give it all to my kids college. Back to paycheck to paycheck for me
