Can you handle a $2,000 USD emergency?

[TheNinja]

If you are not in school and you don't have $2000 cash in the bank somewhere you are officially pathetic.

 

[olds]

I only keep 1k in the house but could easily cover 2k by going to the bank.

 

[BlahBlahYouToo]

All of you saying that having $10-20k in reserves is extra cautious are wrong. IMO that's just plain where you want to be. I think having six months of maintain-your-lifestyle expenses in reserve is a minimum. Then if the crap hits the fan you start living poor and stretch that money out.

Like Dullard was saying, you want to have at least $2k in your checking at any time for emergencies. For many this is probably too low though (at least it is for me). This is your highly liquid account where you can pull the cash out at the drop of a hat.

After that, you want to have $12k+ available in semi-liquid accounts. These are accounts where your money is available within 3 or 4 business days, but it's also working harder for you than in a crappy savings account. These accounts include things like CD's, other higher-interest savings accounts or maybe even stocks. I've got about $14k sitting in an ING high interest regular savings account and in the average of the past 5 years have made something like $20/month (it was way more when I was in a 4.5% CD that has since expired.) It's not a lot but the money is instantly available cause I can transfer it to my ING checking account and use my debit card instantly. When interest goes up I'll put it in another CD. It's also zero maintenance so I don't have to think about it.

So what happens if I have a $5000 emergency? I'll just put it on my credit card and have 30 days to pay it off. That will give me time to pull the money out of one of my semi-liquid accounts to pay off the card in full at the due date.

I personally maintain a minimum of $20k in my liquid accounts and max out IRA's then invest whatever I have left over into diversified stock accounts (like vanguard). These are semi-liquid because I could sell and transfer the money to my bank account within a week or two max. There is nothing my credit limit couldn't cover before getting the money to pay off the balance in full (I don't pay interest).

are intra-bank transfers instant during business hours?

e.g.,
initiate transfer at 9:00am on monday from chase savings to chase checking. go to ATM to withdraw at 9:01am.

 

[KeithTalent]

Not straight dolla' bills in my house under my mattress or anything, but in the bank I keep a few thousand ready to go in case I get fired or something else crazy happens. You just never know.

I have my other stuff in other accounts which can be liquidated, but straight cash only a few grand in my bank.

KT

 

[djnsmith7]

I remember catching a few minutes of Suze Orman's show a few years ago & her suggestion to her audience was to have 3x your actual monthly spend, including all food, gas & bills, in a savings account.

 

[nickbits]

I remember catching a few minutes of Suze Orman's show a few years ago & her suggestion to her audience was to have 3x your actual monthly spend, including all food, gas & bills, in a savings account.

She now suggests an 8 month emergency fund.

 

[Sheep]

If you are not in school and you don't have $2000 cash in the bank somewhere you are officially pathetic.

I agree with you in principle, except for those people who have run head on into "rainy days" which I suspect is not the case for most in this boat, which is indeed pathetic.

I'm completely horrible at saving (due to eating out a lot and a gadget addiction) but can stow away that much in a month or two if I had to. Yay for being a nerd in my elementary and high school days.

 

[timosyy]

Yes, and I graduated college a year ago.

 

[coloumb]

Nope - and probably never will unless my current income is magically doubled.

Everytime I find myself with an excess amount of money, rain day comes along and takes it away. If I find myself needing money - things just happen to ensure I have the money to cover expenses.

[1] Excess amount of money - federal refund this year, clutch needs replacement, clutch is paid for using refund.
[2] Needing money - A LONG time ago - Floppy drive died on my Amiga 500. I decided to go the local dog track for fun [never been before, and never betted before]. I randomly picked 3 dogs and won just enough to pay for a replacement floppy drive.

I suspect this is why I'll never win the lottery - I'm cursed to not have too much money yet I'm blessed that money tends to show up when I need it.

 

[MetalMat]

People just need to learn how to save up a little. I am doing just fine, but that is because my mom taught me to save my money and invest. I have alot of friends that are broke as hell which sucks. If you cant afford something (except a house) just save up till you can get it.

Sure being rich is a nice thing (which I was), but being at financial peace is fantastic.

Oh yeah, and I listen to Dave Ramsey sometimes

 

[VinylxScratches]

I have 30k saved and I feel that isn't enough....

 

[crab]

Easily. I blame Bush.

 

[spidey07]

That little tale about the squirrel saving his nuts wasn't some fairy tale. It was meant to be a life lesson. Sadly this age old wisdom is ignored as many/most will live paycheck to paycheck no matter how much or how little they earn. That's a fact.

Agree that personal finance should be taught in school.

 

[pcgeek11]

Yes. I rarely let my savings acct go below 50K of purely liquid assets.

 

[highland145]

LOL, $2000.

I spent over $2000 on lunch today.

Dude, you from Tanzania?

Dollar menu, FTW

 

[moshquerade]

easily.

too many people overspend and string their credit out having to have the biggest and the best, and then don't have a pot to piss in.

 

[Mr. Lennon]

50% of Americans would struggle to come up with $2,000 in a pinch...But I'm sure at least half of them own a macbook+ipod.

 

[brianmanahan]

i have about 15 years of my monthly spending in savings acct. i dont sped vary much.

 

[Squisher]

I'm trying to think back to how old I was when I wouldn't have had to run to Mommy and Daddy for $2000 if I needed it. Between credit cards and savings I'm going to say early 20s.

 

[amdhunter]

I could, but I wouldn't be happy about it at all.

 

[Vic Vega]

wouldnt someone who rents, has good health insurance and a reliable car not really have to worry about that?

Sure, I guess, if you're content to stay poor your entire life and never build any wealth.

 

[Vic Vega]

I have 30k saved and I feel that isn't enough....

How old are you? It's definitely a start but you're right, it isn't enough. You're way ahead of the average drone these days though who has zero money and lots of debt. :thumbsup:

 

[Vic Vega]

If you are not in school and you don't have $2000 cash in the bank somewhere you are officially pathetic.

Agreed. Even when I was fresh out of school making $10/hour living alone and paying my own way I always had a couple grand in the bank. People would rather have an iPad and a flat screen than actually have money.

 

[Scarpozzi]

I keep telling people on this forum that $2000 is the place to be in the emergency savings. Yet, many can't get even to that low, low bar. Even this week I made a post about it.

Yes, I can get $2000 in cash today. If it were up to me, I'd keep the savings at that value. But, my wife is terrified of problems, so she keeps 2 years expenses in a savings account of her own. It is sad to see that money not earn much interest (especially with the stock market going up 30% in the last year). But, she is happy and we'll never have money issues.

That's awesome that she's got it set aside. It'd be nice if she could earn something on it...invest a year's worth in high-yeild bonds or something. You can withdraw from a lot of those accounts in a day's notice by wire transfer. Check Sharebuilder(ING) or Scottrade...

 

[Leros]

I could come up with $5k, possibly a bit more, if I had to and I'm on a meager grad school student salary. Saving isn't hard as long as you love within your means.