For the Love of Everything, Please Keep 3-6 Months Worth of Money for an Emergency Fund (If You Can)
I left my job about two months ago, and I applied for unemployment immediately. I got a new job today, but I STILL haven't gotten my unemployment decision. Additionally, my food stamp application was delayed due to personal circumstances. In short, had I not had money saved for an emergency, I would have been mega-screwed.
I know some people are not in a position where they have the luxury of storing away significant amounts of cash but, if you are, I beg of you to do so if you aren't already. I can't imagine what position I'd be in right now if not for my budgeting.
Thanks for coming to my TED Talk.
PS. I posted this here instead of in c/finance because the sidebar there specifies that it's supposed to be for finance-related news.
LOL yea sure I can't even fucking pay for food right now but I'll just casually save up thousands of dollars.
I know you said "if you can" but bro most people literally fucking can't.
Same here, my friend. I have a feeling that anyone who can is already doing so, or at least have a second car or something they can sell if times get hard. Most of us don't have shit to fall back on.
I would love to. But when you’re stuck in perpetual minimum wage and your rent alone is costing you at least half of that… yeah. I am not arguing by the way, you’re absolutely right, it’s just that, for a lot of people, myself included, dare I say, the vast majority of people people, this is not something that is possible.
Buddy, in this economy, most people's only feasible financial-emergency strategy is to jump off a bridge.
Yea let me just go to the fuckin money tree and harvest 6 months of income to put in savings... Where the fuck is that supposed to come from? Wtf is this wall street journal privledged ass fucking advice?
Would you like me to lecture you on not eating avocado toast?
You guys are getting toast? In this economy?
If only we actually lived in the Animal Crossing universe.
(For those unfamiliar, in the game Animal Crossing you can actually "create" money trees that you can harvest from every so often, and how much you get is dependent on how much you initially "invest")
I've been unemployed for 6 months now. Resigned from my old job because I was fed up with how I was getting treated. In hindsight, it was probably a rash decision, but I never expected that getting a new job, with all my skills and experience, would be this difficult. I completely chew thru all my savings, sold half of my stuff, and even ended up borrowing money from my folks to survive. I'm glad my parents were able to help me out, but I feel pretty bad asking them for money when they've been retired for years, and it should be me supporting them instead. It really sucks, it feels like I failed my parents and failed at life, especially when I keep hearing stories of how well off my cousins are, how they're married, own a house, own a car, have kids etc and meanwhile I'm still single, flatting, and don't have any assets worth mentioning. Sigh.
Politicians: “Look how great the economy is doing!”
Job market: doesn't exist
Housing: doesn't exist
Homeless people: everywhere
Why there aren't massive riots, I can't fathom. Civilization is coming apart at the seams and everyone is just…okay with that.
I don't think people are okay with it, I think people are probably afraid to lose what very little they have left and like what are we going to do anyway? Protests don't work. We'd have to come together and we have all been incredibly divided and taught to hate each other. We can't even have conversations online without people picking fights for literally no reason.
Yeah, that's why I didn't say “protests”. Our forefathers didn't get a 40-hour work week by asking politely.
I mean that goes back to the point of people are not able to come together at this point and are scared to lose what little they have left. I think we'll have to lose it all at this point to get people to budge but who knows. I agree with you though!
Even that doesn't really explain it. The streets are crawling with people who were evicted from their homes because their jobs didn't pay enough to cover rent. These people have nothing to lose, and yet they still stay quiet.
I think you are vastly oversimplifying things. For starters, who is going to organize this? If you don’t have food or shelter, your only focus for the day is find food and a relatively safe place to sleep at night.
But, let’s say that they did organize. We know what the outcome would be: the police would show up, beat the shit out of them, jail them, and throw away what few possessions they have left. And most people’s reaction to that would be “I’m glad the police finally cleaned up our streets” because, whether they want to admit it or not, most people hate the poor, and especially hate the unhoused and just want them to disappear. I can say that with confidence because that’s what happens in major cities when the unhoused do anything, every. time. Those who have been suffering for a while have had the spirit beaten out of them, and the recently unhoused quickly learn to follow suit if they want to stay alive and have any hope of improving their lives because if you have any criminal record whatsoever, you immediately become unhirable to 90% of businesses. Creating problems for the system is a way to guarantee you will remain unhoused for the rest of whatever life you have left after.
Yeah, that's true. Everyone seems to hate the homeless. And they'll probably continue to hate the homeless even as millions of working middle-class people lose their homes as a result of the housing and job crisis. Hell, the newly homeless will probably hate themselves, too.
But I don't understand why. These homeless people didn't choose to jack up their rent and slash their wages; their landlords and employers did. They're victims, not perpetrators. Why would people hate them? Is everybody's brain malfunctioning from microplastic poisoning or something?
So, they remain docile because they cling to a false hope? As far as I can tell, once you're homeless, you're going to stay that way for the rest of your life, no matter what you do, precisely because everyone hates you for being homeless.
I wish I had a good answer for your first questions. My best guess is some mixture of American propaganda about poor = lazy, puritanical views that hardworking people are morally good, and a refusal to believe that it will happen to them because they are good, hardworking people.
As for your question about the unhoused, I’ll paraphrase something my spouse, who has been unhoused, told me in the past:
“The false hope is necessary. The people who lose that hope are the ones who OD trying to escape (though those who still have that hope may also use drugs as an escapism) or quietly kill themselves and no one but the few unhoused they know will notice, and most won’t have the energy or mental space to care.”
^^ to add a bit to that of my own; we have studies that show the psychological effects chronic starvation and stress cause: increased irritability, impulsiveness, decreased ability to plan or critically think (from their own previous ability, not saying it immediately drops your IQ to like, 70 [also, let’s agree to brush over the issues of IQ as a measure of intelligence since I am just using it as an example]). And that is a permanent effect. It doesn’t rebound if you suddenly become food-and-shelter stable. Your brain is just permanently fucked up.
Also, I don’t know where else to include this, but I feel like it is important if discussing this topic. My spouse was unhoused for approx 1 year. It has taken 5 years of therapy to get them to view themselves as a person again. After 12 months, they had internalized their treatment as subhuman to the point it has taken 5x that to undo. And that’s not like, positive self-esteem. They still have insanely low self esteem and negative views of themselves and their abilities (along with CPTSD). This is them viewing themselves as a person as much as any person walking down the street. I cannot imagine how it is for people who have been unhoused longer.
I mean when you're houseless, the last thing you're doing is planning a riot that isn't going to amount to anything either. The kind of change we need takes community, mutual aid, planning, resources, and making sure everyone can come together and stay afloat, and lots of time. It isn't something that can happen overnight. When you are on the street you're in survival mode, planning your next meal, how to survive, and how to get out of that situation. There's no bandwidth left to do anything more than simply survive.
That's not a far cry from the situation a lot of people are in right now even if they have a roof over their heads. We're all in survival mode trying to make sure the bills can be paid, there's food on the table, and we don't lose everything. We're exhausted, burned out, and we have a huge empathy problem. We're not functioning at full capacity and it's hard to do much about the situation when it is purposefully built to keep crushing us to make sure we are also unable to fight and get out of it.
If you want change, it's up to you, me, and everyone else to start educating ourselves more on our history, how it got this way, and how to come together and build ourselves up in a community so that we can stand together and care for each other and actually make those changes that we want to see. It's not easy but it would definitely help if people would stop blaming each other for the issues and point their fingers at the right people and again, educate themselves. All of this inevitably ties back into politics and too many people can't grasp that concept either and refuse to participate which means they are actively choosing to not even try to understand how to have a better future. Some of us right now don't have a choice because we're targets.
I don't think people are quiet either, there's plenty of discussions and videos even online of people discussing these things and feeling the same way. Things are changing. People are waking up to what's happening but they have to decide to keep moving forward. We're in a really weird place right now.
Anyway I've rambled enough, there's a lot more people who have much more knowledge on this than I do and who are more qualified to speak on it.
Keep your head up! Its definitely stressful being between jobs. I just experienced that this year, however mine was forced on me when the company let a bunch of people go to save costs/restructure. I guess the good part there was it included severance. It took me about 3mo to find a new job, but holy hell those months were super stressful. I cut out all extra spending, switch to minimum payment on my loan, dropped services we didn't need and of course stopped buying stupid shit.
No idea what you do, but my line of work can be remote/on-site and I thought finding a remote position from anywhere would be easier, but ultimately started looking at local companies with some on-site. This turned out good for me because of everyone's push to be full time remote.
Thanks, I appreciate your kind words. I'm in IT (sysadmin) and would prefer to work remote, but tbh I don't really care at this point. At first I was a bit choosy because of my overconfidence, but now I'm open for anything - even part time, short term etc - across the whole country even. Applied for several dozens of jobs so far, only had one interview call and I blew it - my mind went blank on a simple python question, although I nailed the rest of the interview, I guess they weren't impressed when I said I knew python (which I did, but.. oh well). I do have another interview coming up, but my confidence has taken a big hit. I used to think I knew this shit inside out and companies would be lining up to hire me, but boy was I wrong. It's come to the point where I'm willing to take a 40% paycut and go back to tier 1 roles.. not like I haven't applied for tier 1 stuff but I friking didn't even get an interview call, or let alone a rejection mail, so yea, I'm seriously doubting myself at this point.
I did not have much serious interest either and considered my resume really strong. I quickly started wondering where the disconnect was.
Since I was laid off, one benefit I was given was access to a placement company. They helped with my resume formatting and I had a human coach who I met with a handful of times who initially helped calm me down but also gave me pointers on my online presence (LinkedIn profile). The companies website had videos that went over resume building, interviewing, negotiating etc, but I honestly didn't find them as useful.
If you want to message me I'd be glad to help. I can look at your resume (not an expert) but am in IT (solution architect) and can at least compare it's layout style to what I ended up with. I can try to remember/write up the things my coach had me change on my Li profile.
I don't know if I have much info/help to give but I can share what I did.
That's pretty similar to my experience, although I'm maybe slightly less seasoned than you in terms of experience. I wasn't exactly expecting to get a new position immediately, but given all the talk in the media of a needy job market, I had a pretty damn hard time getting so much as a call back from most places.
Yeah the job market is so fucked up, being told everywhere needs people, except for every company you just applied for lol.
On one end you have HR sitting on their ass for months, advertising for jobs already filled (only finding out weeks later), go through 2/3 interviews to not be picked or put on hold even following up for a couple months, random filters that screen out proper candidates while keeping ones who bloated it with keywords... long lines to even speak to someone at career events. Been through it all. I picked up every single god-damn call and still it took 10 months. The whole process is so denigrating and it makes it easy to fault yourself for it. (Lesson learned: don't do that!). Other thing I learned is many companies for some fucked up reason like to hire around the same time so often it was 3 interviews 1 month, 0 interviews for the next two.
On the other hand, from recruiting side you have an avalanche of applications to sift through, many of them AI garbage nowadays, and if you interview someone that can't say much about a project they put on their resume, what can you do?
With inflation at the level it is, and salary offers not keeping up either, even if you can land something it's not quite a golden ticket on its own.
If you run into a financial ditch and don’t have emergency funds, contact the electric, water, medical, phone, credit card, etc. billing departments right away. Don’t wait until after you’ve already missed a payment or two! Jump right to it and set up payment plans. I helped a friend through a financial crash and was impressed how much leeway billing departments will give you if you reach out before you miss a payment.
They want to get paid and it's much easier to get paid from someone willing to work out a deal.
it can't happen. greedy landlord keeps raising rents.
1–3 months is enough for other developed countries other than the US, due to unemployment benefits, social security and most importantly: at least 3 months prior to termination a required termination notification.
Anyways: due to the current high interest rates it might be worth it to put more money into your savings account, since the opportunity costs compared to company shares are low.
You can also do short term investment like T-Bills or CDs too. Just make sure they're maturing regularly. For example you could split your emergency fund into 8 chunks, and buy an 8 week T-Bill every week for 8 weeks. If you ever need the money stop reinvesting them and you'll get 1/8th back per week for 8 weeks.
T-Bills are a bit over 5% now.
Is it nearly as much a nightmare to start getting unemployment in other places? I'm stunned that it's taken as long as it has in my case.
My experience in the netherlands is that there is usually some delay, but not more than a month usually. I used to go in and out of unemployment a lot when I had just dropped out of college. Lot's of temp jobs. It was very annoying. But the unemployment money started accumulating right after you got fired. Only thing was that it could take a few weeks before they payed out.
Here in New Zealand it took me about three weeks.
But, I know we get far less money than in many other places. It wasn't even enough to cover rent so I had to use savings.
Now I'm on disability and it's less than half what people get on minimum wage. I know from my support group that disability is harder to get in the US but it's also pays a lot more money.
The other benefit of having a proper emergency fund is being able to say no to your boss without any fear. It took me 10 years but I have enough accessible funds to go a year easily without any new income. The freedom at work is so nice. I've noticed that my confidence at not needing the job makes them take me way more seriously and offer all kinds of benefits they don't afford everyone.
While you're at it, just pay all of your bills immediately. Just don't be in debt, its that simple.
Thanks, Dave.
People used to reddit really need that /s there buddy
For credit card this actually isn't the best idea if you're trying to build credit. You want to build your debt and then pay it off at the end of the month.
Yeah, I live in a real country, so that isn't necessary.
wow very humble, contributing a lot to the conversation
I just switched jobs, I'm gonna have like $15 in my account when my car insurance gets taken out today lmao, it's rough till you get that first paycheck
And if you cant try for say $20 per check. It will help, maybe not be everything you need, but will help.
Finance seriously isn't a place to chat about finances? That doesn't make much sense. It can help so much to work through those things and not feel so isolated when people are able to share their stories... It would be nice to have that space here for sure.
That aside, what you did isn't possible for most, and that number grows daily. You're extremely privileged to have been able to do this and I'm sure you know that and are grateful that you were able to do it, but it comes across a little tone deaf to make this post considering how many people are struggling and kind of feels like a kick while people are down. People are well aware of this advice and I'm sure it wouldn't be a second thought for many to save up money for emergencies if it were at all achievable. To that end, I'm not sure what the point of posting this is.
It would help if food, healthcare, education, housing, the right to bodily autonomy, and a few other things were treated as actual human rights that we are obligated and entitled to have instead of something that you have to toil to earn even though the more we toil that trickle down never kicks in and we are losing rights as we go. I know this varies by country and region but with where we are in society none of this should be as hard as it is, and people are needlessly suffering.
For quite a while I'd always told myself, "I'll just forego the usual advice, since I could just draw from unemployment if I ever found myself without a job." I'd had the usual advice drilled into me but, until recently, had completely ignored it. I'm pretty damn glad I pivoted when I did, because holy hell it's a nightmare to actually start getting benefits, even in my state.
As to why I posted this: if my experience can convince even one other person who was as naive as I was to save a little more, then I'd consider that worth any ass kicking that I get from others. More than anything, I wanted this to be a, "it could happen to you" style of post.
I've always been of the mindset to save wherever I could, so it's interesting to hear some people aren't like that. It's kind of just a given to me and the people I've been around to try to prepare for whatever we can as best as we can before it happens. I'm glad you were able to prevent things from getting worse for yourself and hopefully you can always carry this lesson with you into the future. It's definitely a good don't take things for granted story I think as well.
i’ve been around on !personalfinance@lemmy.ml :)
Oh alright, I'll check that out then thank you so much! :)
One tip I heard when I first got a job is if you go shopping and pay with a debit card, don't be afraid to get $10-20 cash back just to throw in a rainy day fund. Granted the person that told me this used it to hide money from her husband but the point still stands.
Always keep emergency/rainy day money because you never know when you'll need it
yes pls, gimme $$$