how many months worth of living expenses?

[GQgeek]

The standard number is 3 months. In a recession, is 3 still enough? I'm thinking about how much cash i need to keep aside for when i get back and relocate to toronto to look for work early next year.

 

[MetroStyles]

Originally Posted by GQgeek

The standard number is 3 months. In a recession, is 3 still enough? I'm thinking about how much cash i need to keep aside for when i get back and relocate to toronto to look for work early next year.

At least 3 months. That's cutting it super-close if you do not have a family you can crash with in case things go terribly. I would think something like 6 months would be safer.

 

[SField]

Originally Posted by GQgeek

The standard number is 3 months. In a recession, is 3 still enough? I'm thinking about how much cash i need to keep aside for when i get back and relocate to toronto to look for work early next year.

I could probably do a year, and much more if I stop eating at Trotter's at Alinea all the time.

 

[Piobaire]

We have a two pronged safety net. We keep a year of entire income replacement in liquid reserves. If neither one of us could work for a year, we could live just fine. Then we also keep our fixed costs under what the take home pay of our smallest salary is.

 

[blackjack]

Personal finance guru Ric Edelman http://www.ricedelman.com used to recommend 6 months of living expenses for his clients. However, after 9/11, he now recommends his clients have 12 months of living expenses. One of the reasons cited is the increased average time required to get a new job (4 - 7 months).

 

[GQgeek]

4 to 7 months? That sucks. I hate the idea of burning through savings because I'm really sick of renting.

 

[DNW]

If you go into survival mode, your 6 months of regular living expenses could easily be stretched to 8-9 months. But yeah, think that's the minimum now. 3 months just seem a little too short.

 

[grimslade]

I would love to have three months. I just don't know where I could get it.

 

[kwilkinson]

Originally Posted by grimslade

I would love to have three months. I just don't know where I could get it.

Hustling chess in Central Park?

 

[GQgeek]

Originally Posted by DarkNWorn

If you go into survival mode, your 6 months of regular living expenses could easily be stretched to 8-9 months. But yeah, think that's the minimum now. 3 months just seem a little too short.

Ya the only thing I'm not really prepared to concede on is rent. I couldn't live in a hovel. Aside from that I'm putting aside for regular food (not veal 3x a week and expensive cheeses like now), internet, phone, and utilities. I really really hope I won't be unemployed for that long though.

 

[GQgeek]

Originally Posted by grimslade

I would love to have three months. I just don't know where I could get it.

Ya but you at least have a job. I'm going in there with no job.

 

[SkinnyGoomba]

6 months is a good number for me, but i have rent not a mortgage, and my car loan. I think if you keep the amount of real debt you have to a minimum you can live with a smaller barrier (length wise, monetarily it will depend on each situation), if you like to leverage yourself, then the smart thing to do would be to put away at least a years worth in my opinion.

And that would be in savings thats liquid, and stay away from stocks for safety money. Overall stocks are depressed when you need to cash in on your 'safety money'.

The irony is that the majority of people who collect alot of debt have little or no savings, and they're the ones effected very heavily when they can no longer pay their bills.

 

[Nomad_K]

While not a financial expert, my friends who have been through one or two downtimes recomend 6 months or more.

Having a little extra liquidity isn't going to be the end of your financial portfolio, especially right now.

 

[MilanoStyle]

I would say 1 year to be on the safer side. I don't know which profession that you're into, but the job market isn't so good in Toronto right now and it isn't going to get any better, IMO.

 

[GQgeek]

Originally Posted by MilanoStyle

I would say 1 year to be on the safer side. I don't know which profession that you're into, but the job market isn't so good in Toronto right now and it isn't going to get any better, IMO.

IT. I actually just saw a program on the news last night that said that IT is the 3rd most in-demand job right now. It was a bit surprising. Medical care was second (and there's a strong IT niche in there). I missed what was first. Accounting was #5.

I *think* I am going to want to look for IT jobs in hospitals and stuff. They tend to be higher stress gigs but i thrive in that sort of environment and it's an ever-expanding field where smart people should do very well. I know a couple of doctors in TO so maybe they will be able to help me get interviews. Don't know at this point...