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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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[–] filister 1 points 1 year ago (2 children)

Having too much savings is plain stupid, as the inflation is eating them every day. I am keeping only 3 months and the rest I invest in an ETF.

[–] [email protected] 2 points 1 year ago (1 children)

Although I agree to some point, keeping too much in ETF increases the risk of it all going down the exact moment you need it since you loose the job at the same time the market crashes in a crisis.

[–] filister 1 points 1 year ago

You forget that I have a buffer of 3 months plus I live in Europe, so the money I will receive for unemployment would help me to further extend my financial cushion. I can create a standing order with a limit and only sell some ETFs if the price is reached, in order to reduce the financial losses.

Plus if I invest my money in ETFs long enough I would most certainly always be on the plus side.