Financialopnik: do you have savings goals?

"Dr. Zoidberg - RIP Oppo" (thetomselleck) 09/06/2020 at 14:16 • Filed to: financialopnik

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It’s the first Sunday of the month, so I’m paying bills and looking over balances over a cup of coffee. I’m now over 5 months removed from having been laid off, so this is the first time in a while I don’t feel extreme anxiety looking at my information and monies again.

But it jogged my memory. A nd I remember feeling at the time — when both my wife and I were no longer working — that whatever we had saved up to live off was suddenly not enough . I am relieved that it was not put to the test as we both work again, but it caused me to re-evaluate my finances yet again in short order.

In my mid-20's and hearing all kinds of “go-to” targets: 6 months of your income saved, six months of your average post-tax consumption saved, or even hearing 1-year’s salary saved... But we all come from different walks of life, and have different responsibilities and family situations. A “catch-all” rule won’t work. Not to mention, people with extenuating circumstances that hinder any kind of lofty financial goals.

Speaking for myself, I somehow don’t have a round number in mind. I think I would prefer to have 6-months worth of money that allows me to maintain a similar lifestyle (which in my case means pay bills and buy beer) should I unexpectedly lose my job or something like that — at minimum. More is better, but then it becomes, “oh, you could be making that money work FOR you elsewhere than sitting in the bank.” But I own an old home that needs things, so a little extra money on hand would make sense for us.

In short, adulting kind of sucks sometimes.

My bird IS the word > Dr. Zoidberg - RIP Oppo 09/06/2020 at 14:29

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Hundred thousand dollars in case I get wrapped up in a long lawsuit? Keep in mind too, you can only be so prepared.

VincentMalamute-Kim > My bird IS the word 09/06/2020 at 14:32

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That’s what an umbrella insurance policy is for. Pretty cheap tacked on to homeowner’s coverage.

hillrat > Dr. Zoidberg - RIP Oppo 09/06/2020 at 14:33

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Yeah, I need to save more. It’s easy to say, tough to do. 

Wobbles the Mind > Dr. Zoidberg - RIP Oppo 09/06/2020 at 14:49

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I decided to make a few categories and work through them. P ersonally, I like financial goals that actually have end points so that I can be done and move on to something else.

** Cash Savings
1 Work Week
3 Work Weeks
6 Work Weeks
12 Work Weeks

** Health Savings Deductibles
In-Network DED
In-Network Max
Out-Network DED
Out-Network Max

** Retirement - Roth IRA
1 Work Week
3 Work Weeks
6 Work Weeks
Roth Max

** Retirement - 401k
3%
6%
10%
Max

MM54 > Dr. Zoidberg - RIP Oppo 09/06/2020 at 14:52

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I shoot for 6 months of “hard” expenses in savings (mortgage, insurance, utilities, basic food costs, etc - nothing unnecessary), if by the time I’m running out of that I haven’t found work we’ve got bigger problems (and I have cars I could sell to get by worst case). Having recently added a car payment to my recurring expenses, I’m almost back to “enough”.

I have a similar dilemma where I feel like I should do something with the money instead of having it collecting dust in a savings account at 0.000000000069% interest but anything that makes it harder to access in an emergency detracts from the practicality of having the emergency-savings in the first place. Like you, I also consider it the house-emergency funds in case like the well breaks (again) or something very costly needs done unexpectedly.

Brickman > Dr. Zoidberg - RIP Oppo 09/06/2020 at 14:55

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I have LEGO

other words... I have no more savings after being a home owner :)   

sony1492 > Dr. Zoidberg - RIP Oppo 09/06/2020 at 15:02

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Enough to pay off my debt in one fell swoop, or live comfortably for about 8 months. That being said my housing is free and my only debt is a newer car.

Bas icall y looking at a specific number, then hovering around that goal

E90M3 > Dr. Zoidberg - RIP Oppo 09/06/2020 at 15:07

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After spending 11 months unemployed, I'm hesitant to do anything with the cash I've got in the bank. 

404 - User No Longer Available > Dr. Zoidberg - RIP Oppo 09/06/2020 at 15:09

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Here’s my approach to budgeting:

- I’ve fully embraced the YNAB method, fully buffered that any paycheque coming in this month is destined for next month and beyond. I’ve done math on my baseline expenses like mortgages, telco bills, home and auto costs/insurance, annualized and set money aside per bi-weekly.

- Also have an emergency fund of 4.5 paycheques (forgot how I came up with that number, there was a calculator that factored in my work experience and social nets like employment insurance)   set up for income loss apocalypse , though my last one when I got let go I didn’t have to make use of it since I got a decent severance.

- I use the tax brackets as a rough estimate on how much I should save: baseline salary income is deducted from my budget to dedicate as savings and investments, additional income like credit card cashback and bank interest is deducted at my income bracket’s tax rate. After this money is set aside, I distribute them towards different tax deferred/sheltered investments and savings, though I don’t have a specific goal in mind aside from a retirement egg. I also sometimes make a case for large purchases from here, but this is rather rare.

- I also apply a “luxury” tax of 20% destined towards savings , which is applied to purchases I deem “unnecessary”, e.g. for eating out, buying electronics, airsoft guns, etc . When I first implemented this many years ago when I first started working , it used to be 100%, dropped to 50% and now settled at 20%. Some people called this very aggressive and flat out crazy , but it helped me achieve the buffer.

Dr. Zoidberg - RIP Oppo > MM54 09/06/2020 at 15:30

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And as a homeowner, you have to protect your asset. Protect in this case meaning able to take a swift kick to the balls for future gain

BrianGriffin thinks “reliable” is just a state of mind > Dr. Zoidberg - RIP Oppo 09/06/2020 at 15:34

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Right now I have less cash than I’d like (though it’s working it’s way in the right direction) mostly due to buying a new home two years ago. My property taxes are stupid high, which hurts saving ability.

What I do have, though, is equity in a rental property (used to be my house, but a neighbor was interested in renting it so i just kept it). Thinking about doing a cash out refi while rates are low and then investing some and holding some in savings or bonds. November / December seems like there will be a high likelihood investments will go heavily on sale. 

HammerheadFistpunch > Dr. Zoidberg - RIP Oppo 09/06/2020 at 15:39

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I have tried to have around 40% of my salary sitting and waiting, but I will be wiping that out with school in the next 2 years so there’s that. Most of that reserve came from selling a rental property.  I will have some contingency cash in the form of vacation savings and some less liquid assets should things go pear shaped that would keep me going about 6 months.

415s30 W123TSXWaggoIIIIIIo ( •_•))°) > Dr. Zoidberg - RIP Oppo 09/06/2020 at 15:58

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I have a pension and a IRA mainly. I just do what I can, I’m up to about $2k a month in my union pension after seven years. 

Wrong Wheel Drive (41%) > Dr. Zoidberg - RIP Oppo 09/06/2020 at 16:00

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I went the route of having a job thats near impossible to lose. Sure I could go elsewhere and make some more money but job security is often an underrated benefit. I do keep savings but I definitely dont consider it “for emergencies” or anything like that. It helps that I rent a room rather than own anything and my only other expense is student loans (which im currently paying the crap out of due to the 0% interest). Ive got my maxed out employer matching 401k and a pension so future planning is decent too. I could do better but I find that I prioritize traveling and hobbies rather than extreme saving. The funny thing about COVID though is that its really limited my expenditures on both of those things though so im just putting all of it to savings and loans instead. About $18 k in loans left to go after ~6 years of paying, I can see the light at the end of the tunnel!

jminer > Wrong Wheel Drive (41%) 09/06/2020 at 16:54

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Nice job on the student loans.  We’re taking the 0% time to sock away a bunch of extra cash into our moving budget.

Wrong Wheel Drive (41%) > jminer 09/06/2020 at 17:47

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Yeah started at like $50k, maybe 60k? Idk I tried to ignore that number so that it wouldnt haunt me in my sleep. But loans in my name are all paid down to zero, just have the 18k left in parent plus that I will agressively pay down until the interest and then I will probably go back to monthly paying while I save for other purposes.

CarsofFortLangley - Oppo Forever > Dr. Zoidberg - RIP Oppo 09/06/2020 at 18:35

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Don't go bankrupt is my goal.

MUSASHI66 > Dr. Zoidberg - RIP Oppo 09/06/2020 at 18:48

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We’re working on a year worth of money- enough to pay our standard monthly bills every month for a year if we both lost our jobs. Then, some more money in cash as a just in case. Plus, I like a certain amount as a buffer in the checking account which we consider a zero.

Then, we want to save $40-50k so we can go and buy a car we want in cash.

After that, it’s all about paying down the house - we’re already on a 15 year mortgage and paying extra, but we’ll do more. 

wafflesnfalafel > E90M3 09/06/2020 at 19:18

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right - I am cash/liquid heavy as well. Laid off too many times and just paranoid...

Dr. Zoidberg - RIP Oppo > HammerheadFistpunch 09/06/2020 at 20:11

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Do you feel a sense of relief being freed from said rental property?

Dr. Zoidberg - RIP Oppo > CarsofFortLangley - Oppo Forever 09/06/2020 at 20:12

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Novel if true

HammerheadFistpunch > Dr. Zoidberg - RIP Oppo 09/06/2020 at 21:10

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Very much so

Dr. Zoidberg - RIP Oppo > HammerheadFistpunch 09/06/2020 at 21:13

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That’s basically what my dad told me. Every home he’s ever owned, he would rent out until X years passed and the sell. I.e. he would move and rent out his previous home. He told me that he could count tenants that actually paid and on time on one hand. 

jeepoftheseus > Dr. Zoidberg - RIP Oppo 09/06/2020 at 21:16

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We keep a few months of expenses liquid then the rest goes into investments or something. Mrs. Jeepoftheseus handles all of that. S he loves to save whereas I hate to spend so i t all boils down to her saving our cash and me saving on labor because “sure I’ll give it a shot”.... it mostly works but we also have lots of unfinished projects.

HammerheadFistpunch > Dr. Zoidberg - RIP Oppo 09/06/2020 at 21:23

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Or the times tenets accused me of stealing their deposit for having to clean up their mess

GoodIdeaAtTheTime > CarsofFortLangley - Oppo Forever 09/06/2020 at 21:45

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My lawyer and I am working on this now.... damage done. I can no longer financially recover at this point. 

CarsofFortLangley - Oppo Forever > GoodIdeaAtTheTime 09/06/2020 at 21:59

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That sucks, I'm sorry to hear that

DC3 LS, Fuck Hyundai, now and forever > Dr. Zoidberg - RIP Oppo 09/06/2020 at 22:21

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I just spend whatever I think is reasonable and pocket the rest ¯\_()_/¯

Although I work for a company that has a government contract and according to good sources it’s about to get a lot bigger.

AestheticsInMotion > Dr. Zoidberg - RIP Oppo 09/07/2020 at 00:22

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One year of living expenses (without changing my lifestyle), and maxed out Roth IRA . It took quite a while to recover from losing my job and having my car broken into 18 months ago, and that was a pretty big catalyst towards major financial change. Saving up for property, otherwise I’d be funneling all extra money into investments of some sort

RPM esq. > Dr. Zoidberg - RIP Oppo 09/11/2020 at 02:42

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I shoot for at least 6 months, if not a year, of “hard” expenses (housing, enough food to live on, health insurance) , and strive to stay healthily right side up on anything secured by debt so they are assets if I had to shed them ( i.e. , cars with loans on them).