how much do you need in the bank at any given moment to feel secure? - Mothering Forums

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#1 of 19 Old 08-13-2010, 09:32 PM - Thread Starter
 
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A months worth of bills? 3? 6?

DP wants to quit his job for another which Im hesitant about bc my brother is the vp of his company which makes me feel like his employment is a lot more secure than working for some joe.

I told him if he gets another job I want more than 5 mos worth of bills stashed away in case he gets fired, laid off etc from the new job and he needs time to get a new one. Is this unreasonable? am I just fear mongering?

Im so SCARED of him being unemployed and not able to find a job!

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#2 of 19 Old 08-13-2010, 10:48 PM
 
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well, that's more than we have stashed away.... but i think it's very reasonable. dave ramsey says having about 6 months salary to cover bills is wise - so if you're in a position to do that, i would. hth.

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#3 of 19 Old 08-13-2010, 11:21 PM
 
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It would take at least 6 months worth set aside for me to feel sort of okay. We've been through job losses before and it's very scary.

We are working towards that.

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#4 of 19 Old 08-14-2010, 08:15 AM
 
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I've always heard 6 months' worth of living expenses at a minimum, optimal is a year, especially in a tougher job market. No, you're not fear mongering. You're being careful.
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#5 of 19 Old 08-14-2010, 08:52 AM
 
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more than we ever have,that is for sure!!
I would guess 6 months worth would make me feel secure

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#6 of 19 Old 08-14-2010, 11:56 AM
 
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It's all a matter of perspective. We are really struggling right now (savings gone, dh looking for a better paying job but unemployed for awhile so he took a job that paid much less) - we are thrilled at the prospect of having $1000 in a baby EF and $1000 in a sinking fund. That's the best we can do right now. But after this experience, you better believe that as soon as we are in a better place, we'll be shooting for 6 months living expenses!!
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#7 of 19 Old 08-14-2010, 02:31 PM
 
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In the past, probably 6 mo ala DR. However - in this scary economy, I would say a year. It is taking longer than that for many people to find work, and when they do it is for FAR less pay. Having a year's salary in the bank is probably unattainable for most, though.

If your hubby would be WAY happier at another job, and if he already has a new job BEFORE he quits the old job, then I think you should support him.

Also - he should make absolutely sure he does not burn bridges at this company. Give them plenty of notice, and perhaps someday he could return. Another option would be looking at internal transfers, which would keep your perceived security but maybe help with his boredom.

I say "perceived" because your hubby could still be laid off, even though you have relatives in high places. You wouldn't want that to happen, and then have him blame you for not moving someplace else to advance his career.

Good luck mama!
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#8 of 19 Old 08-14-2010, 03:21 PM
 
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6 mos. sounds good to me, especially in your situation.

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#9 of 19 Old 08-14-2010, 07:42 PM
 
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I think that's a reasonable amount. And I'd insist that he finds a new job before quitting the old one.

We used to have 6 months EF but right now it's only 3 months. It's OK because DH's job is guaranteed for the next few years, and we're paying off the mortgage like crazy. Once the house is paid off we'll build it up to 6 months again.

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#10 of 19 Old 08-15-2010, 11:54 AM
 
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We are self-employed. We've been married 10 years, and we built up an EF of one year's expenses. Good thing, because in 2008 our income dropped significantly. We nearly wiped out the fund over the next couple of years. We are determined to get it back up to at least 6 months over the next year or two. It means we have to cut back on everything, and refinance our mortgage to get a lower monthly payment, but having that EF is well worth it! We did not lose our house during that time.
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#11 of 19 Old 08-15-2010, 11:20 PM
 
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I'd say at least two months in an EF. DH has had several pay cuts, as much as 50% and we went three weeks without him getting paid (he did eventually).
We paid off the credit cards two years ago and we had three months of expenses put away. A few years ago, even a week without a pay check would brought us to our knees. I'm still nervous about DH's job, but I'm not in a total panic.
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#12 of 19 Old 08-16-2010, 12:13 PM
 
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I would say at least 6 months, but a year is better, BUT remember that these are basic living expenses - needful bills, not "3 activities per kid and dinners out" level of living expenses....so it is not the same as 6 months to a years' salary, unless you are living paycheck to paycheck and scraping by.
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#13 of 19 Old 08-16-2010, 12:16 PM
 
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a year's worth of expenses if he was going to quit without finding a job first.

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#14 of 19 Old 08-16-2010, 02:26 PM
 
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The answer to that depends on so many factors.

The first one is - will he get unemployment?

The second - what are your housing costs? do you have an equity in your house?

Third - what is the unemployment rate in your area/field?

It can take a long time to save 6 months of expenses. If your expenses are 3000 a month - that is 18,000 dollars! That would take many people years to save. If I was miserable in my job - but could access unemployment or house equity I might quit anyways. Being miserable sucks.

I do think the smarter plan, if he can, is to look for work while still employed. It can be hard to find time to look for work while working full time - but this may be where you can come in (if you have more time that him). Most jobs are posted, and applied for, online. This can be done by significant others or in off hours (it is how my DH got his current job, lol)
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#15 of 19 Old 08-24-2010, 02:22 PM - Thread Starter
 
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Quote:
Originally Posted by kathymuggle View Post
The answer to that depends on so many factors.

The first one is - will he get unemployment?

The second - what are your housing costs? do you have an equity in your house?

Third - what is the unemployment rate in your area/field?

It can take a long time to save 6 months of expenses. If your expenses are 3000 a month - that is 18,000 dollars! That would take many people years to save. If I was miserable in my job - but could access unemployment or house equity I might quit anyways. Being miserable sucks.

I do think the smarter plan, if he can, is to look for work while still employed. It can be hard to find time to look for work while working full time - but this may be where you can come in (if you have more time that him). Most jobs are posted, and applied for, online. This can be done by significant others or in off hours (it is how my DH got his current job, lol)

he is sooooo miserable. I tend to think he has it great and should just suck it up.... but he really hates his job.

Im not sure if he can get unemployment, I dont know how it works. He has a job "on the table" if thats what you mean. do you have to be working somewhere for a certain amount of time before being fired or laid off in order to collect?

Our housing costs are a big expense percentage-wise. about 40% of our monthly take home. Not sure about equity. We just bought our house a year ago and have paid less than $1200 on the principal. Almost all of our payment goes to interest, escrows etc. however, we got it at a super low price being that it was a foreclosure....its assessed at 80k more than we paid and 5 yrs ago (during the boom) it had sold for almost 3x what we paid. I dont know how accurate zillow is but it estimates our house now at 106k more than we paid.

We only have about 3 months worth of expenses in the bank. BUT, aside from the house, we have zero debt. no credit card payments, no car payments, nada.

Because he is in a skilled trade, and winter is always tough, my fear is... he gets another job and leave this one, winter will come, and the new job will get rid of him first because he's "new". no company in his trade hires in the winter, that's when they're all starving for work. that 3 mos of expenses in the bank would go fast!

But he's so miserable. He comes home crabby and mean almost everyday,, and by Friday he's unbearable. It takes all day sat to get him out of his funk, then Sundays are usually good, but as the day goes on he has anxiety about going back.

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#16 of 19 Old 08-24-2010, 02:24 PM
 
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how much do you need in the bank at any given moment to feel secure?
More than we have now.

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#17 of 19 Old 08-24-2010, 02:52 PM
 
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I like us to have at least 3 months living expenses at any time just in case of emergency's, though DH is military and his job is secure. If he wasn't military I wouldn't feel secure without at least 6 month's expenses saved up.

My dh recently made the decision to stay in the military and retire, but when he was considering getting out (he would be happier in a civilian job but decided our financial security is more important) we did the math and figured out how much we would need to survive for 1 year of him being unemployed. We added in a cushion for emergency's, took out things that aren't necessities (cable, netflix, xm radio, reduced the grocery bill, etc) and we included the amount he would get from unemployment. It was still a pretty big number. Oh, and that was with a good job offer on the table, also.

We decided on needing one year of expenses because we know several people who have been unemployed for approx a year.

I have to say, that my stance on the matter would depend hugely on what field dh is in. For instance, being in the health care industry vs construction. If it's a job where winter layoffs are highly possible and they're more likely to lay the new guy off first I'd have to HEAVILY consider that.

Good luck!

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#18 of 19 Old 08-24-2010, 06:34 PM
 
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Quote:
Originally Posted by sg784 View Post
Im not sure if he can get unemployment, I dont know how it works. He has a job "on the table" if thats what you mean. do you have to be working somewhere for a certain amount of time before being fired or laid off in order to collect?
He would be penatilized for quiting a job and later being laid off anytime he claimed benefits in the following 1.25 years.

At least I was. I quit a job, moved across country and a year later found myself unemployed. I did get a check, but it was less than what it could have been.
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#19 of 19 Old 08-24-2010, 10:08 PM
 
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for security.....2 yrs of living expenses in the bank. But then I think it really doesnt matter how much you have, health insurance will wipe you out.
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