After several months of consistent saving, my little Freedom Fund has finally grown up.
Finally, I have $21,200 stashed away in the Freedom Fund, which will last me just about 12 months, assuming a monthly expenditure of $1,700 (my financial restructing plan).
I still have around $1,000+ lying in various accounts (I should really consolidate them), which will add another 1/2 month if need be. I can move back home. I also can withdraw up to $10,000+ in Roth IRA contributions as an absolutely last ditch method.
So, as I stare down the road at what is likely a prolonged and painful recession, I worry about a lot of things, such as job security and surging applications to graduate schools.
But I know that this too, shall pass (how long it’ll take to pass is anyone’s guess). In the meantime, then, I have adequate cash on hand (experts recommend 6 months of living expenses, though I imagine a job search can easily take longer than that in the current market) and I have a supportive network of loved ones. I am blessed, and I am grateful.
Knowing that I’m blessed, however, doesn’t mean I don’t worry! So even though I achieved my goal of saving 12 months of living expenses, extraordinary times call for extraordinary measures. I plan on continuing to grow the Freedom Fund, so that I am as prepared financially as I can be.
Given these trying times, how many months of living expenses do you aim to save?
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Congratulations! That is an amazing accomplishment. Your savings-savvy is an inspiration.
I am (very) slowly growing my savings. I would like my emergency fund/savings to reach 1 year. Based upon my current budget, this would be $15K.
Congrats! Accomplishing a goal gives you such a liberating feeling, doesn’t it? Do you max out your Roth and 401k? Now that your efund is complete, will you focus on other goals or keep adding to the efund? What about non-retirement investments? You have to keep thinking big and raising the bar. Congrats again!
Yay! Congrats on your cash fund!
Everyone worries, but those with some cash and their finances in order must worry a little less.
I was writing a comment responding to your question, but it was getting really long, and I haven’t blogged today… So I’ll just make a post.
Way to go!
It’s really amazing how every little bit can add up to a lot. I set my saving on autopilot and transfered money every month to my emergency fund. Without even paying too much attention, I had around a years worth of expenses saved!
It came in handy when I got laid off earlier this year…and I think having around a year’s worth is a good way to go, especially in this economy. It makes the job search not seem so urgent if you know that you’re not about to end up on the streets.
That’d be great to have 20 grand stashed away. Right now I am pushing to just have 5k by years end. Next year I am hoping to grow that to about 12k. It is taking me an awfully long time because I am married and have a child. Every time I save a little up it would seem something happens and the account balance goes back down.
I really just keep my fund for emergencies like house, car or medical. Although my job is not exactly 100% secure I am 100% positive that even if I were fired today, I could have a new job with a new company by this evening.
I’m almost at 6 months ($6k). I’m going to leave my emergency fund at $6k and focus on saving for other goals–travel fund, bike fund, clothing fund, car maintenance fund, etc.
Since my DP fund is just sitting there, I’m sure I have about 3 years worth of expenses (I live at my parents home though, so I don’t spend much). Once I move that DP fund will disappear though, and leave me with more expenses, and about $5k in savings (if it happened now. That’s maybe 3 months?). I’m now considering nixing the 20% DP plan when I move and keeping some in my emergency fund instead. (I’m thinking $12-20k in total.)
I think 6 months will allow me to keep from panicking, but 1 years’ worth of expenses is what I’m going to aim for.
I have about four months of expenses saved up as an emergency fun, as well as maybe another two months in “sinking funds” (money for travel or gifts or other goals that could be used for an emergency fund if necessary). I haven’t been adding to it regularly in a while, choosing to focus on other savings goals, but I would like to bump it to a full eight months’ worth of expenses and then max out my Roth IRA (I’ve got my 401k contributions up to 10% with a 6% match from my employer).
I still remember the weight that lifted off my shoulders when I deposited the final $1,000 to reach my emergency fund goal.
I am aiming to save 6 months worth (15,500) to begin with. Once I reach that goal, I’m going to try for a year’s worth. I would be content with that.
Sadly I live quarter to quarter (graduate tuition) and only have about ~2months saved up as contingency but that also means I don’t have overwhelming debt for grad school. Part of the reason I choose to spend more up front on grad school is that even with the faltering economy I have a fairly stable job at a large firm that gives me a little more contingency and time to act should anything bad (*knock on wood*) happen.
You are doing better than most 20 yr olds
You are doing better than most 20 somethings
I am soooo proud of you! We are the same age and this amount of savings is unheard of in us 20somethings.
Unfortunately my living expenses run about $3,000 dollars ( I really need to double check what are necessities) so I only have a little over 1 months worth of savings.
My goal for next year is to have at least 3 months worth. I wish I could do 1 years worth.