4 ms·
Yeah what's probably best is some number closer to "monthly net after taxes, rent, insurance".
by spoonie 9y ago
Yeah what's probably best is some number closer to "monthly net after taxes, rent, insurance".
- closeparen 9y agoIf I take home $2500/mo and pay $1000/mo rent and $500/mo expenses, it takes 9 months to save a six month emergency fund. If I take home $5000, pay $3500/mo in rent, and spend $500 on everything else, it takes 24 months to save a six month emergency fund. Yet my monthly net is the same. Ratio matters a great deal. Maybe less so after you've established savings.
- dllthomas 9y agoTrue that ratio is more relevant to savings where your target scales with local COL. That's true for some things, not for others. Though I might argue, regarding an emergency fund in particular, that establishing and maintaining such would be something that should be accounted as an expense rather than savings.