# what's a good target for equivalent salary put away for a rainy day? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [April 29, 2009, 8:33pm UTC](https://boards.straightdope.com/t/whats-a-good-target-for-equivalent-salary-put-away-for-a-rainy-day/494766 "2009-04-29T20:33:28Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![miamouse](https://avatars.discourse-cdn.com/v4/letter/m/ad7895/32.png) [@miamouse](https://boards.straightdope.com/u/miamouse)\ **Post date:** [April 30, 2009, 10:57am UTC](https://boards.straightdope.com/t/whats-a-good-target-for-equivalent-salary-put-away-for-a-rainy-day/494766/21 "2009-04-30T10:57:20Z")
> [@Broomstick](#): > > That Orman quote makes _no sense_ - if credit card companies are doing all that then it is EVEN MORE important to get rid of any form of credit card debt. If someone’s thinking of paying all debts before layoff (or with your severence), and the credit card companies decide to cancel or lessen their available credit, then they have considerably less reserves than the might have planned on. i.e. If they wanted to use credit cards as super-emergency funds what happens if they are no longer there? They’ll be SOL. ---
**Author:** ![China\_Guy](https://avatars.discourse-cdn.com/v4/letter/c/779978/32.png) [@China\_Guy](https://boards.straightdope.com/u/China_Guy)\ **Post date:** [April 30, 2009, 11:01am UTC](https://boards.straightdope.com/t/whats-a-good-target-for-equivalent-salary-put-away-for-a-rainy-day/494766/22 "2009-04-30T11:01:44Z")
Mine was $100k when I was single. More now with wife and kids. $100k isn’t fuck you money, but it is fuck you money for a year or two or more if you really need to stretch. Growing up poor, it feels pretty good to have that $100k ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [April 30, 2009, 12:33pm UTC](https://boards.straightdope.com/t/whats-a-good-target-for-equivalent-salary-put-away-for-a-rainy-day/494766/23 "2009-04-30T12:33:57Z")
> [@Broomstick](#): > > That Orman quote makes _no sense_ - if credit card companies are doing all that then it is EVEN MORE important to get rid of any form of credit card debt.. I’m a big fan of no debt…but for the short term in this economy if your job is in jeopordy, cash is more important than debt. You can stop paying your credit cards, it will ruin your credit. But if you are unemployed and you loose access to credit, you can eat off cash. Of course, it would have been far preferable to pay off the debt when the economy was good and your job was secure. But, alas, the good times were never going to end. ---
**Author:** ![Moirai](https://avatars.discourse-cdn.com/v4/letter/m/96bed5/32.png) [@Moirai](https://boards.straightdope.com/u/Moirai)\ **Post date:** [April 30, 2009, 12:36pm UTC](https://boards.straightdope.com/t/whats-a-good-target-for-equivalent-salary-put-away-for-a-rainy-day/494766/24 "2009-04-30T12:36:49Z")
> [@Khadaji](#): > > I have heard 6 months, but I am more comfortable with 12. We have a year. ---
**Author:** ![zweisamkeit](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/zweisamkeit/32/4360_2.png) [@zweisamkeit](https://boards.straightdope.com/u/zweisamkeit)\ **Post date:** [April 30, 2009, 2:37pm UTC](https://boards.straightdope.com/t/whats-a-good-target-for-equivalent-salary-put-away-for-a-rainy-day/494766/25 "2009-04-30T14:37:12Z")
> [@China\_Guy](#): > > Mine was $100k when I was single. More now with wife and kids. $100k isn’t fuck you money, but it is fuck you money for a year or two or more if you really need to stretch. Growing up poor, it feels pretty good to have that $100k You have $100K _in cash_ sitting around? ---
**Author:** ![ZipperJJ](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/zipperjj/32/211_2.png) [@ZipperJJ](https://boards.straightdope.com/u/ZipperJJ)\ **Post date:** [April 30, 2009, 3:22pm UTC](https://boards.straightdope.com/t/whats-a-good-target-for-equivalent-salary-put-away-for-a-rainy-day/494766/26 "2009-04-30T15:22:29Z")
And you live in China…will $100k get you further in China or are things more expensive there? ---
**Author:** ![Kalhoun](https://avatars.discourse-cdn.com/v4/letter/k/3bc359/32.png) [@Kalhoun](https://boards.straightdope.com/u/Kalhoun)\ **Post date:** [April 30, 2009, 3:28pm UTC](https://boards.straightdope.com/t/whats-a-good-target-for-equivalent-salary-put-away-for-a-rainy-day/494766/27 "2009-04-30T15:28:06Z")
> [@zweisamkeit](#): > > You have $100K _in cash_ sitting around? We don’t have it in cash, but we have _some_ cash and CDs that mature at various times throughout the year. I count that as cash. ---
**Author:** ![ParentalAdvisory](https://avatars.discourse-cdn.com/v4/letter/p/53a042/32.png) [@ParentalAdvisory](https://boards.straightdope.com/u/ParentalAdvisory)\ **Post date:** [April 30, 2009, 3:37pm UTC](https://boards.straightdope.com/t/whats-a-good-target-for-equivalent-salary-put-away-for-a-rainy-day/494766/28 "2009-04-30T15:37:31Z")
> [@zweisamkeit](#): > > You have $100K _in cash_ sitting around? You say that as if it’s impossible. ---
**Author:** ![zweisamkeit](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/zweisamkeit/32/4360_2.png) [@zweisamkeit](https://boards.straightdope.com/u/zweisamkeit)\ **Post date:** [April 30, 2009, 3:48pm UTC](https://boards.straightdope.com/t/whats-a-good-target-for-equivalent-salary-put-away-for-a-rainy-day/494766/29 "2009-04-30T15:48:18Z")
> [@ParentalAdvisory](#): > > You say that as if it’s impossible. Uh, no. I’m saying it as if I think it’s not a great idea to have it sitting around gathering no interest instead of even just bonds or mutual funds. ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [April 30, 2009, 4:21pm UTC](https://boards.straightdope.com/t/whats-a-good-target-for-equivalent-salary-put-away-for-a-rainy-day/494766/30 "2009-04-30T16:21:12Z")
> [@zweisamkeit](#): > > Uh, no. I’m saying it as if I think it’s not a great idea to have it sitting around gathering no interest instead of even just bonds or mutual funds. Bonds and mutual funds can see their value decrease. As anyone who had their rainy day fund invested in the market in September, only to see it crash in October and then get laid off in November, sometimes having a lot of money in a very small return fund turns out to be a way better option. Mutual funds and CDs are FDIC insured - that is worth a lot when things are uncertain. ---
**Author:** ![crazyjoe](https://avatars.discourse-cdn.com/v4/letter/c/f14d63/32.png) [@crazyjoe](https://boards.straightdope.com/u/crazyjoe)\ **Post date:** [April 30, 2009, 4:46pm UTC](https://boards.straightdope.com/t/whats-a-good-target-for-equivalent-salary-put-away-for-a-rainy-day/494766/31 "2009-04-30T16:46:13Z")
> [@Dangerosa](#): > > Bonds and mutual funds can see their value decrease. As anyone who had their rainy day fund invested in the market in September, only to see it crash in October and then get laid off in November, sometimes having a lot of money in a very small return fund turns out to be a way better option. > > Mutual funds and CDs are FDIC insured - that is worth a lot when things are uncertain. Mutual Funds are not FDIC insured. ---
**Author:** ![Mama\_Zappa](https://avatars.discourse-cdn.com/v4/letter/m/71e660/32.png) [@Mama\_Zappa](https://boards.straightdope.com/u/Mama_Zappa)\ **Post date:** [April 30, 2009, 4:58pm UTC](https://boards.straightdope.com/t/whats-a-good-target-for-equivalent-salary-put-away-for-a-rainy-day/494766/32 "2009-04-30T16:58:45Z")
> [@Dangerosa](#): > > **Mutual funds** and CDs are FDIC insured - that is worth a lot when things are uncertain. (bolding mine): Mutual funds are not FDIC insured. You may have meant savings accounts? We don’t have much cash saved up, but are working on improving that including making some lifestyle changes (mainly paying a LOT more attention to what we’re spending). I’d like to eventually get to 6 months living expenses saved up, but that’ll take a while; even with refinancing, our mortgage is a little on the high side. We do have non-retirement money in the stock market; even if it drops to half its value (from its current value, which is already down quite a bit), it should do as an emergency fund if all else fails. I figure we have more “wants” built into the current budget than we realize. I can see 300 bucks a month to cut relatively easily and I suspect even more than that. ---
**Author:** ![Moirai](https://avatars.discourse-cdn.com/v4/letter/m/96bed5/32.png) [@Moirai](https://boards.straightdope.com/u/Moirai)\ **Post date:** [April 30, 2009, 5:51pm UTC](https://boards.straightdope.com/t/whats-a-good-target-for-equivalent-salary-put-away-for-a-rainy-day/494766/33 "2009-04-30T17:51:16Z")
> [@zweisamkeit](#): > > You have $100K _in cash_ sitting around? Yes. Earning shite interest but FDIC insured. ---
**Author:** ![glee](https://avatars.discourse-cdn.com/v4/letter/g/b5a626/32.png) [@glee](https://boards.straightdope.com/u/glee)\ **Post date:** [April 30, 2009, 5:56pm UTC](https://boards.straightdope.com/t/whats-a-good-target-for-equivalent-salary-put-away-for-a-rainy-day/494766/34 "2009-04-30T17:56:27Z")
Even though I’m semi-retired and have paid off my mortgage, I keep 2 months salary on instant access. ---
**Author:** ![ParentalAdvisory](https://avatars.discourse-cdn.com/v4/letter/p/53a042/32.png) [@ParentalAdvisory](https://boards.straightdope.com/u/ParentalAdvisory)\ **Post date:** [April 30, 2009, 6:20pm UTC](https://boards.straightdope.com/t/whats-a-good-target-for-equivalent-salary-put-away-for-a-rainy-day/494766/35 "2009-04-30T18:20:29Z")
> [@zweisamkeit](#): > > Uh, no. I’m saying it as if I think it’s not a great idea to have it sitting around gathering no interest instead of even just bonds or mutual funds. You’re right, it’s not a great idea. But then, who said it **wasn’t** earning interest? ---
**Author:** ![Malthus](https://avatars.discourse-cdn.com/v4/letter/m/85f322/32.png) [@Malthus](https://boards.straightdope.com/u/Malthus)\ **Post date:** [April 30, 2009, 6:29pm UTC](https://boards.straightdope.com/t/whats-a-good-target-for-equivalent-salary-put-away-for-a-rainy-day/494766/36 "2009-04-30T18:29:08Z")
It’s a question of savings priorities. I have 6 months of expenses (not salary) in cash; I prefer to put new savings into my RRSP (Registered Retirement Savings Fund), RESP (Registered Educational Savongs Fund) for the kid, and into extra mortgage payments, than having it in the emergency fund. At the current rate, I’ll have the mortgage payed off in less than 3 years. Then, I’ll have a party and symbolically burn the mortgage papers. 😃 [To you Yanks out there - we don’t get that sweet, sweet mortgage interest deduction you have - but we do get a deduction for money put in our RRSPs and there are top-up benefits to RESPs). ---
**Author:** ![China\_Guy](https://avatars.discourse-cdn.com/v4/letter/c/779978/32.png) [@China\_Guy](https://boards.straightdope.com/u/China_Guy)\ **Post date:** [April 30, 2009, 11:36pm UTC](https://boards.straightdope.com/t/whats-a-good-target-for-equivalent-salary-put-away-for-a-rainy-day/494766/37 "2009-04-30T23:36:17Z")
> [@zweisamkeit](#): > > Uh, no. I’m saying it as if I think it’s not a great idea to have it sitting around gathering no interest instead of even just bonds or mutual funds. it’s not under the mattress but yes more than that actually in ‘cash equivalent’ asseets. I had a lot more in the markets but liquidated everythinr 5 moths before the peak. I did not get burned holding funds with AAA rated bonds on to lose a bundle when they turned out to be sub prime. and I missed 5 months of a market rally but not the fall. i’ll get back in proibably 6-12 months from now. or i’ll buy a house I worked ibanking for 7 years. it’s tough to short as an individual that doesn’t have time to proactively watch the markets. I was tought about risk and risk mitigation by the best. here’s a market truth that few people understand- if you make more than treasuries, you’re taking on significant risk. also, if you’re in my situation. it will not be cheap to relocate couuntries, deposit on a place to live, but a car, potentially cover insurance…and maybe do all that without a job and no credit rating. ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [May 1, 2009, 1:07am UTC](https://boards.straightdope.com/t/whats-a-good-target-for-equivalent-salary-put-away-for-a-rainy-day/494766/38 "2009-05-01T01:07:43Z")
> [@Mama\_Zappa](#): > > (bolding mine): Mutual funds are not FDIC insured. You may have meant savings accounts? I do…brain fart. ---
**Author:** ![fruitbat](https://avatars.discourse-cdn.com/v4/letter/f/58f4c7/32.png) [@fruitbat](https://boards.straightdope.com/u/fruitbat)\ **Post date:** [May 1, 2009, 1:24am UTC](https://boards.straightdope.com/t/whats-a-good-target-for-equivalent-salary-put-away-for-a-rainy-day/494766/39 "2009-05-01T01:24:31Z")
It really does depend. First, it depends on the likelihood of losing your job. My wife works for the Federal Government, her job is as secure as a job can be in this day. My job is quite secure, but it is private sector financial services, so for use we need about 6-8 months of expenses, figured conservatively. In this environment it is important to measure your priorities. The low interest rates incent savers to channel relatively more money to stock oriented mutual funds, in their retirement accounts for example, over savings. Citibank has been running an ad campaign to pimp their rate of 2% for a one year CD. If you keep too much in savings you run the risk of earning very little on that money that could be used to buy shares at what may be historically low prices in the equity markets. The problem with having a hard and fast target for what we all should be doing is that we all face multiple and competing priorities for the dollars we do have, so that extra $100 could go to retirement, college savings for the kids or for a rainy day. With the economic disasters we have faced it is likely that all of these priorities are underfunded. ---
**Author:** ![ParentalAdvisory](https://avatars.discourse-cdn.com/v4/letter/p/53a042/32.png) [@ParentalAdvisory](https://boards.straightdope.com/u/ParentalAdvisory)\ **Post date:** [May 1, 2009, 1:32am UTC](https://boards.straightdope.com/t/whats-a-good-target-for-equivalent-salary-put-away-for-a-rainy-day/494766/40 "2009-05-01T01:32:45Z")
> [@Malthus](#): > > [To you Yanks out there - we don’t get that sweet, sweet mortgage interest deduction you have - but we do get a deduction for money put in our RRSPs and there are top-up benefits to RESPs). We get to deduct above the standard deduction limit. For a lot of property owners, it will be barely anything at all to deduct, if anything at all. For those that pay a lot in property taxes and can deduct a huge amount, they’re paying a dollar to save a quarter. It’s something, but they’re still paying somebody, and it’s not themselves. [Previous page](https://boards.straightdope.com/t/whats-a-good-target-for-equivalent-salary-put-away-for-a-rainy-day/494766.md?page=1) [Next page](https://boards.straightdope.com/t/whats-a-good-target-for-equivalent-salary-put-away-for-a-rainy-day/494766.md?page=3)