How many months in emergency fund?

[AmongMadPeople]

With some diligence, we've paid off a few high balance debts over the last 2 years. Currently, we're rapidly building up our savings account. Both my hubby's and my job are in an industry which isn't thriving. Therefore, we also don't expect him to be able to find a new job easily, unless it involved a career change.

We are aiming for 6 months expenses in savings, and we should reach that by the end of summer. So I'm wondering, how many months of expenses do you have in savings? If you worked in a slow industry, would that change your savings goal?

 

[DisneyOHFan]

We always use the rule of them of 6 months.

 

[RachaelA]

We have 6, but ultimately I'd like a year (of full expenses. no cutting back). If I knew DH would have a hard time finding a job if he was laid off, I'd definitely want as much as possible in savings.

 

[crisi]

We have about a year, but it really depends on your circumstances.

For instance, we both work and can easily live off one income, so that tempers how much we would have to have. And my husband is a "vital employee" at a pretty stable Fortune 100, even if his company goes under, he'll be one turning out the lights. My industry is shakier, but my skill set is pretty broad and translates.

On the other hand, I have HUGE security needs. Thus we have a lot of savings.

 

[NY Disney fan]

I'm not playing around...I'm shooting for 12 months but it all depends on your situtaion. I am a single mom.

 

[Pakey]

Although my husband and I both have decent incomes and we could live off of one or the other if one job was lost, we have about a year in our emegency fund, just in case. We have no debt but health insurance premiums are my biggest concern.

If I was the least bit worried that either one of us could be jobless, I'd probably bump mine up to 2 years. I don't think either one of us would have an easy time finding other employment at the same income level we currently enjoy.

 

[2disneyboys]

We currently have a few months worth of existing income/expenses (no cutting corners) we are aiming for 12 months. (of course, if one of us lost our job, we would cut corners, but that just would stretch out the savings further)

Most people say to go for 3-6 months, but I know way to many people that were in "stable" jobs that lost thier jobs for whatever reason and it has taken them anywhere from 9-18 months to obtain compreable employement (and 2 had to move!) and we are not in an area w/ high unemployment rates so to us, 12 months is a good breather.

 

[frank430316]

We currently have six months, but are working to increase that to 9 to 12 months. I'm in the software industry, and layoffs are now all too common. Last time it took almost 8 months to find a job So it is definitely time to put away, while I'm working.

 

[PatsMom]

I keep somewhere between three and six months in cash. My husband is retired so his income is social security and a pension - it is pretty secure. The pension plan is well funded. My job is a little more shaky and I currently make a lot more money than he does! We would have a real tough time living on his income after the deductions for medical expenses and alimony. And I can do what I do anywhere but it would require basically starting my own business in the local area. There are no companies large enough to hire me on a salary basis and I am not about to start doing commission investment sales at this point in my life.

But we also have significant retirement savings and my husband's can be accessed with no penalty, just taxes because of his age. I also keep an open home equity line of credit that could be used if necessary to supplement income until I could get something up and running. I could also take employment in a different occupation short term until I could get a business established.

 

[tinkermom23]

We have 6 months but we are working on increasing it to 12 months. I am a SAHM and DH job is labor so it requires him to be physically healthy. If he was unable to work, we'd tighten our expenses and I'd need to go to work while he stayed with the kids.

 

[tomthebarncat]

My spouse will not stop spending money even though as of 1 June he no longer has a job. This is a BIG source of aggravation right now, as we keep having pointless conversations about this. I have been married for 9 years and am extremely frugal and judicious with money, my spouse on the other hand...is wasteful and just plain stupid when it comes to money. My fear is we will never own a house or have retirement fund!!

 

[neatokimmo]

If my job wasn't steady I would have 1-2 years saved up. My emergency and retirement are all smushed together so it is higher than just a regular EF.

 

[charming23]

I currently have 6 months worth of savings and am working to get it more toward 12 months.

 

[bettymae1121]

I'm also going for 12 months, but really "12 months", for us, would last a lot longer than that. First off, the odds of both of us being out of work at the same time for that long is pretty slim (both our jobs are fairly secure). Second, there is unemployment payments to factor in as well. By my calculations, if either of us lost our job, we could make it on one income and unemployment without having to touch savings. We could even make it on one income and NO unemployment, though we'd be eating a lot of Beenie Weenies to do it. A 12 month fund would last us a lot longer than a year, in other words.

But, unemployment is only one reason why income could be interupted. We both have short and long term disability insurance through our employers, but neither pays 100% for very long, after that it gets cut to 2/3 pay. And while I get PTO in the event I have to care for my DH, if something happens to me DH's time off would be un-paid if he needed to care for me. So in a case of one of us being unable to work, a healthy savings account would take a lot of pressure off until things either got back to normal, or a "new normal" could be worked out.

 

[DawnM]

We have 6 but keep contributing so it will hopefully be around 12 before too long.

We do have other investments we could tap if necessary though.

Thankfully DH has a fairly secure job. I realize this could change, but there would be a line of people let go before he would be let go and business has been strong enough to hire even more people in the last year.

Dawn

 

[buckirj1]

I have a little more than a year in pretty liquid savings, and close to two years in CDs, not counting any possible health insurance premiums. That's a huge worry.

 

[annsteere]

None. We have a major equity credit line we could tap in an emergency, but that's it.

 

[Took]

Although my husband and I both have decent incomes and we could live off of one or the other if one job was lost, we have about a year in our emegency fund, just in case. We have no debt but health insurance premiums are my biggest concern.

If I was the least bit worried that either one of us could be jobless, I'd probably bump mine up to 2 years. I don't think either one of us would have an easy time finding other employment at the same income level we currently enjoy.

We're in this situation, too. Two incomes but could live off one. We have about 3-4 mos ready cash and more in long-term savings. We're both in very stable professions.

 

[AmongMadPeople]

I think all this confirmed what I've been fearing - we need to keep saving after we hit 6 months. My husband and I work at the same company, if we did lose our jobs it would be at the same time. I'd like to not fear the future, but this has become our new normal.

 

[walkdmc]

It's taking a lot of people a year to find a new job. I'd aim to have 12 months of savings in my emergency fund.

Keep in mind, you won't be paying for stuff like fancy cable and stuff that you may be paying for currently. You'll make some sacrifices if one of you loses your job, like cutting out the HBO and such. So, you may not need as much as you thought, if you re-evaluate your current bills and changes you will make if needed.