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[EU] How many months savings do you consider enough? (self.personalfinance)

submitted 1 year ago* (last edited 1 year ago) by what_is_a_name to c/[email protected]

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As the title says I am trying to see where people stand on this. Obviously this is all personal preference. But that is what I am after.

After depleting our savings when buying our apartment 2 years ago, we’re about to cross 6 months liquid savings in just plain old savings account with ability to immediately withdraw money.

(To clarify that is 6 month assuming 0 income, which is very unlikely given the social system of our country - so realistically we have even more in savings.)

As you can imagine, the interest in this account is not great, so I want to set a limit as to when we stop dumping every spare penny into the savings account and begin doing other things (likely try to invest).

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[–] [email protected] 11 points 1 year ago (1 children)

Personally, as a rule of thumb, I don’t think you can have enough in savings.

Our society is built upon going into debt… and I’d rather pay up front for things like a replacement vehicle or heater/pump or what have you, which means having enough to survive on—as you are inferring—and enough to survive Murphy making an unannounced and unwelcome visit.

[–] severien 10 points 1 year ago (1 children)

The point of the question is how much money does one need in a liquid form as opposed to less liquid investments.

[–] [email protected] 2 points 1 year ago

A fair point.

Personally, I use ‘savings’ as a catch-all for any form of money you have no intention of spending frivolously. Be that in savings, stocks, or other forms of investment.

I’ve got a relative who saw anything beyond the 6 month mark as spending money. I don’t know what form his investments manifested in, but it clearly didn’t work as he’s in financial do-do, and it’s an unpleasant topic amongst the family.