reasonable amount of money to keep in the bank...

otc · Sep 7, 2010

Originally Posted by 1969

There are better places to earn a buck and still go liquid in 3-4 days.

+1

There is only so much that you really need to have in straight cash (though if you have a high yield savings account that is doing better than current CD rates, why not?).

No need to keep 6 months of living expenses in cash if you can keep 1 month in cash and the rest somewhere that is accessible in less than a month. Pio's suggestion of laddered CDs works, and even if you need more than what is expiring that month, you are only forgoing interest when you cancel them.

gdl203 · Sep 7, 2010

Have you guys checked interest rates recently? This is a non-issue.

Piobaire · Sep 7, 2010

Sadly, that is very true. Old habits die hard though.

thekunk07 · Sep 7, 2010

this is in line with my thinking, more on the 50% side.

Originally Posted by gdl203

30-50% of your current pre-tax household income, depending on your aversion to risk and how easy it is to find decently paying work in your field

Connemara · Sep 7, 2010

Originally Posted by thekunk07

this is in line with my thinking, more on the 50% side.
But that's only two months' worth of steroids.

thekunk07 · Sep 7, 2010

supplies are good now.

gnatty8 · Sep 7, 2010

I aim for a minimum of 4 months worth of normal cash flow at all times. I would say anywhere from 3 to 6 months of cash expenses is probably the sweet spot, depending on your tolerance for risk, investment alternatives, and access to other, less liquid assets..

svelten · Sep 7, 2010

I only have about 15% of my yearly income. That's around 7k, and I still think that's too much as it's doing just about nothing for me. I threw the rest of my money into a mix of stocks, bonds and etfs and pray to the fairy godmother they do better than they did 2 years ago.

Real estate would be the smartest thing to do, but I just haven't found a place I want to settle yet.

globetrotter · Sep 7, 2010

Originally Posted by Piobaire

Strictly my opinion and keep in mind my PoV was shaped by a very poor childhood:

One year of living expenses. Divide by 12 and use laddered CDs.

People will give you a million reasons why this is wrong and that doesn't bother me. I sleep very soundly though.

I'd like to do this, I can only swing half though, and I sleep very soundly, too.

SField · Sep 7, 2010

My first really big deal went to my bank, haven't touched it since. It could be working for me but I enjoy the peace of mind.

Radagast · Sep 8, 2010

Nil · Sep 8, 2010

I have about 5 months of normal living expenses. I could easily stretch this quite a bit longer if I lived frugally which I imagine I would if faced with a situation where I would actually have to use those funds. Note that I'm single and have no kids, so I could easily go back to my 18-19 year old ways without causing anyone else any inconvenience.

rajesh06 · Sep 8, 2010

Recognize that I am on the aggressive side - but I keep 0.5% to 2% of my annual pre-tax income in the bank. I aggressively auto-debit the rest into various investments. I borrow from a personal credit line if I have a moderate crunch and liquidate in a bigger crunch.

I would argue that this will force you to save more and spend less - but it is not a strategy for everyone.

I have a good job and good job prospects (strong professional network including many that have told me that they'd hire me if I was interested) As such, I am not concerned about being out of work for any extended period of time.

Explosivo · Sep 8, 2010

Originally Posted by Piobaire

Strictly my opinion and keep in mind my PoV was shaped by a very poor childhood:

One year of living expenses. Divide by 12 and use laddered CDs.

People will give you a million reasons why this is wrong and that doesn't bother me. I sleep very soundly though.

This is damn solid advice if you can afford to implement it. Good show.

lastlight · Sep 8, 2010

If your job is an easy one to find again, 3-4 months of full budget including savings deposits, + extra emergency buffer. If you are more specialized save as much as possible. Keep it seperate from any RSP/401K, Savings for other future things, etc

reasonable amount of money to keep in the bank...

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