How much to keep in savings?

amother

Vermilion

Thu, Jul 04 2019, 1:30 pm

amother [ Powderblue ] wrote:

I don't really agree. If I lost my job we would get health insurance on the marketplace or maybe Medicaid. Get onto food stamps. Stop paying tuition for a bit and buying clothes. And then get another job. My husband and I are both proffesionala with skills and I don't see why it would be difficult getting a new job. My husband gets reached out to by recruiters a few times a month and the field I'm in is also in high demand. I got a job 3 months before I graduated and started working a day after graduation. But I guess everyone has to know their situation. To me it seems a shame to have 60k in liquid cash doing nothing for you.

What professions are you and your husband in?

amother

Saddlebrown

Thu, Jul 04 2019, 1:35 pm

amother [ Powderblue ] wrote:

That would be fine if it's just a matter of starting a new job. Unfortunately, families sometimes unexpectedly find themselves in a situation where one or both parents have to stop working for catastrophic reasons. That's when you see go fund me campaigns etc but it's obviously best to have a cushion so they don't actually need tzedaka to survive.

amother

Magenta

Thu, Jul 04 2019, 1:51 pm

amother [ Saddlebrown ] wrote:

I have read that long term disability insurance is actually much more important for financial security than life insurance and is more likely to be overlooked in terms of financial planning.

I worked with a man in his forties who developed cancer. It was a small department and we all kicked in so that he could remain on the payroll and the head of the department was instrumental in permitting this as well as having him doing some work from home. Of course he wasn’t doing his full share of work but everyone was a mensch. In a regular situation, he would have been terminated and his family would have had no income and he would also have lost his good corporate health plan for both himself and his family.

amother

Salmon

Fri, Jul 05 2019, 12:50 am

Well it depends what country you live in. Some countries in Europe support people for a year with 60% of their income after they lost their job. So I wouldn't need to save more than the 40% which I'm losing.
But in general I put away every single penny we don't need. We can live on one income but I work full time so we basically put my income into savings each month for the kids and for retirement.

amother

Babyblue

Fri, Jul 05 2019, 6:55 am

I always find these topics so eye opening.

It's only recently that we are in a position to try to save a bit each month. We both work full time but with a family of small kids becoming teenagers the expenses are astronomical, even here in Israel.

My goal is to be able to marry off my kids without debt. I don't know if that's a possibility, but that would be my goal. Someone upthread mentioned having $10,000 per child saved up but honestly, I don't think that begins to cover it, and I'm a plain, not keeping up with the neighbors type. I still don't think that's enough. I wish I knew how much I needed so I could have a more concrete goal and perhaps work backward in my savings per child.

baby12x

Fri, Jul 05 2019, 8:06 am

amother [ Powderblue ] wrote:

And what if chas v chalila something happens and you can't work?
Insurance never covers everything I.e therapies, travel, making a home accessible etc.

You have to do the math and then have some money in liquid and then more money in less-liquid investments such as stocks, money-market etc not physical assets that are very hard to access.

amother

Pearl

Fri, Jul 05 2019, 8:47 am

amother [ Slateblue ] wrote:

You save for what would not be covered by your insurance policies.

I paid disability policy for years at work. When I quit due to sudden anxiety that made it impossible to work, my claim was denied. Because I filed too late (because I was too anxious to do anything the first two weeks). they didn’t deny that it was legit. Just that I can’t prove it happened while still working. So bottom line is you can have policies but they may deny your claim. I even paid for the most expensive option for long term for 70% of my salary.

amother

Magenta

Fri, Jul 05 2019, 8:57 am

This thread points up the difference to some degree between the US and most other Western democracies.

In the US, most middle class families, there is no safety network that is designed to help individuals when they lose their ability to to earn an income - either because of what is happening with the job market or because of some personal disability.

amother

Natural

Fri, Jul 05 2019, 9:53 am

I don't want to derail the thread with my own question but is there such a thing as too much in savings? I've been married for a year and between the two of us we have 200k+ in savings just sitting there in a bank account with 2.15% APY. But we're saving for a house in the next few years iyh. Is there something "smarter" we can do with this cash, or is it better to keep it accessible because our goal is to move to the suburbs soon-ish?

amother

Slateblue

Fri, Jul 05 2019, 9:58 am

amother [ Natural ] wrote:

Personally - I would invest some of it in something liquid - take a bit of risk.

baby12x

Fri, Jul 05 2019, 10:50 am

amother [ Natural ] wrote:

Vanguard has some good accounts that you can invest in. It depends on how much risk you want. But I would think you can put a nice sum in a STAR account or the like and be fine.