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Just curious, what does pay have to do with how many months of expenses you keep as an emergency fund?
by nlawalker 15y ago
Just curious, what does pay have to do with how many months of expenses you keep as an emergency fund?
- chc 15y agoIt's simple: Savings are the money you have left over after your expenses. It's easier to save money when you're making enough to live comfortably and then some. (And I know people will talk about how you can live below your means with any level of pay, and that's mostly true, but the "Rice and beans again tonight" simplicity you need to save money on a shoestring budget is way harder for most people than the "Resist the urge to buy a yacht" simplicity you need to save money when you're making six figures.)
- jlarocco 15y agoBecause after a certain point it's your own fault for not saving a bit. People who make less money have fewer options because you can only cut back so much on food and rent. A person making $20k a year doesn't have much flexibility. They'll have problems just getting by, much less saving 18 months of expenses. On the other hand, a person making $100k a year can always pretend they only make the $20k and save the rest. Or they can live more comfortably and still save some money. Or they can spend with reckless abandon and save nothing.