For me, $10,000 is the magic number. When I see five digits in my savings account, I’ll have achieved my main financial goal for the year.
Handily enough, I also settled on $10k for my rainy day fund. A nice round amount.
And then today I started wondering just how far that would really go. Yes, we live in a welfare state, but the rules on cash assets are pretty strict. Plus if you have a working partner, that basically seems to rule you out for assistance.
$10,000 would cover about four months at our current expenditures (obviously, without saving anything during that time). That’s not a very long time.
Then again, I would save about $100 a month in transport. We’d trim the grocery budget, maybe our internet package, and we could cut Sky TV. T could step up and shoulder more of our costs – I’m talking everything household, from rent to insurance to car maintenance.
But if he was laid off again – incidentally, his ex-employer that made him redundant after virtually promising him an apprenticeship has gone into voluntary receivership – things would really have to change.
How many months would your EF cover, and how stable is your employment? If you’re in a couple, how does that affect your E-fund?