Hacker News Reader

Comment by nkassis | Hacker News Reader

2,000 bucks is a lot, I know the rule of thumbs is like 3 months net salary to keep for bad days but that's just hard for people like most on HN that are young, trying to either bootstrap a business or have a ton of student debt.

Not sure what I would do but I think I could sell enough non-essentials to make up the money if it was a really bad situation.

View on HN

>I know the rule of thumbs is like 3 months net salary to keep for bad days

I was under the impression that the rule was around 6 months.. then again, I'm talking about monthly expenses,as opposed to salary(which hopefully a person isn't spending 3 month's worth of salary in 3 months under normal circumstances). It probably goes up somewhat proportionally with age, if you factor in a home / dependents. I'm in the process of looking for a home now, so my decision on "how much home" I buy will be influenced by the notion of wanting to keep around a year's worth of monthly expenses should I find myself unemployed suddenly.

My rule of thumb is "as much as you reasonably can". Always be throwing money into your savings. First you're saving for emergencies. Then, you're saving a deposit for a house. And finally, you're saving for retirement. There's never a point at which you should say "Phew, I've got six months' living expenses now, I can stop saving!"

The only point at which it's okay to stop saving is when you say "Phew, I've got more than enough money to last me for the rest of my life regardless of random emergencies, I think I'll retire!"

Well, I wouldn't suggest a person ever stop saving, I agree. However it just depends on the savings mode that you're in at any given time. If I anticipate a huge expense coming up (house / car), I'm going to penny pinch as much as possible. If things are seemingly normal and I have a good amount saved up, I might spend a little bit more of it enjoying life.

This might go beyond the depth of the article, admittedly.

Also for a car. You're going to buy a car eventually, right? Do you want to borrow the money and pay interest while it's wearing out, or save the money and BE paid interest while your current car is wearing out? Notice that either strategy will tend to repeat itself, so the net difference over time is huge. One person said saving and getting paid interest amounts to "getting free cars."

That probably just proves that those "rules of thumb" were some random round number someone picked for TV ;p

Six months salary is what I'd always aimed for. I managed that well until recently. Now it hurts.

I read your other posts and hope you are able to work toward better days sooner than later. I have to wonder though - if you hadn't been prudent before everything happened, how much worse off would you be now? Something of a rhetorical question, of course :)

I probably would have been quite screwed. I didn't think that I would end up needing a bigger safety net than that, but I'm glad I had that around. Saved my butt!

My father used to tell me I should have around 15K€ around in case of emergency. Less at the beginning of my career of course.

I have trouble seeing 2K as a lot: I don't think it could cover real emergencies (losing a job, emergency in my family overseas...)

I was paying rent in NY on a below average salary and still managed to save about 10k over a course of a few months to eventually quit and bootstrap. All it took was not going out excessively and not buying superfluous new things.

But you see that 10K you saved shouldn't be the money you use to invest and Bootstrap. That 10K should be the cash you keep around for emergency.

But frankly I'd probably do exactly what you have done personally so take that advice with a grain of salt.

Reply on news.ycombinator.com