4 ms·

Sorry for the intrusive question but if you make software engineer level salary how is it that you don't have multiple months/years saved to mitigate for those

Sorry for the intrusive question but if you make software engineer level salary how is it that you don't have multiple months/years saved to mitigate for those possible layoffs? Or did we all fall for the lifestyle inflation trap that comes with high salaries? I'm probably a pessimist/realist but I have always lived way below my income and saved as much as possible because it really feels like the cash cow that software engineering is is eventually going to end. Layoffs are always looming. When that day comes, I want to relax as much as possible and not have a deadline to find a job,

thenewwazoo 3y ago
The difference between multiple months/years of emergency savings and retirement savings is intent (and timeline). I could afford to take months or years off, but I’d rather let that money grow in an interest-bearing account for decades and spend it later.
- goalonetwo 3y ago
  Sure, but in any case having savings (even retirement savings) allows you to not "frantically" look for a job and be slightly more selective.
  - johnnyanmac 3y ago
    It's relative, but having to dig into your 401k isn't an attractive alternative, one I'd only consider in truly dire straits. You are capped in how much you can put in a year so it's not like a savings account you can aggressively make up for after getting hired. I'd much rather resort to temp work than dig deeply into my future if I had a choice. If I could help it I'd rather invest in
  - blackoil 3y ago
    It is primarily psychological difference. I have 10 years of expense as savings. But that is tied in my retirement/emergency/child education plans. If I stop earning for 1 year, I'll be dipping in them which will create a pressure.
bcrosby95 3y ago
I have 3 kids. My grocery bill alone is 2.5k/month.
- goosejuice 3y ago
  2.5k! That's definitely high for a family of five (assuming). Not that you should, I have expensive taste, but certainly you could bring that down?
- goalonetwo 3y ago
  How are the people making 65k as a household (median income per household in my state) managing this? I don't even understand how 2.5k$ grocery per month is possible. We are 3 in our households (young kid) and probably spending closer to 1k$ per month groceries and eating super healthy/organic.
  - bcrosby95 3y ago
    Keep in mind we have 5 in our household to your 3. They probably eat cheaper food? We do a lot of fruits and veggies. But not organic. Eating out is too expensive, we don't do that. Also, I live in Southern California, it might be cheaper where you are.
    - goalonetwo 3y ago
      yeah, being 5 is a big difference. We usually end up going to Costco once a week for ~250$/trip
- worthless-trash 3y ago
  Tell me you have teenage boys without telling me you have teenage boys ;)
ocdtrekkie 3y ago
1. I'm not a software engineer, and don't live in or near the valley. 2. I'm married and I have two kids. It's amazing how fast multiple years of saving disappear when you have daycare. Just to give you an idea of what childcare looks like: It's a very reasonable question whether we should pay for childcare, or hire a full-time staff member for the household to watch the kids: The price is about the same.
- goalonetwo 3y ago
  Yeah I get it. It's not easy. As a rule of thumb we are still aiming to live with 70% of our household income even with a kid so to mitigate for one of us being laid-off unexpectedly. I guess it is a trade-off. We could live slightly better in a bigger house but I don't want to stress and be in a tough spot if one of us lose their job. That mental sanity is worth 30% of our income to me.
Spivak 3y ago
Same, my rule is my gross yearly salary or 24 months all recurring expenses whatever is larger. I try to set my lifestyle to where the 2 years expenses are 70% of gross salary which is honestly not terribly difficult as a dink. Peace of mind for the cost of "only" making 4.65% interest is well worth it to me.
Hamuko 3y ago
I'd rather not tip into my savings if possible. All of my savings are also not liquid.

thenewwazoo 3y ago

The difference between multiple months/years of emergency savings and retirement savings is intent (and timeline). I could afford to take months or years off, but I’d rather let that money grow in an interest-bearing account for decades and spend it later.

goalonetwo 3y ago
Sure, but in any case having savings (even retirement savings) allows you to not "frantically" look for a job and be slightly more selective.
- johnnyanmac 3y ago
  It's relative, but having to dig into your 401k isn't an attractive alternative, one I'd only consider in truly dire straits. You are capped in how much you can put in a year so it's not like a savings account you can aggressively make up for after getting hired. I'd much rather resort to temp work than dig deeply into my future if I had a choice. If I could help it I'd rather invest in
- blackoil 3y ago
  It is primarily psychological difference. I have 10 years of expense as savings. But that is tied in my retirement/emergency/child education plans. If I stop earning for 1 year, I'll be dipping in them which will create a pressure.

bcrosby95 3y ago

I have 3 kids. My grocery bill alone is 2.5k/month.

goosejuice 3y ago
2.5k! That's definitely high for a family of five (assuming). Not that you should, I have expensive taste, but certainly you could bring that down?
goalonetwo 3y ago
How are the people making 65k as a household (median income per household in my state) managing this? I don't even understand how 2.5k$ grocery per month is possible. We are 3 in our households (young kid) and probably spending closer to 1k$ per month groceries and eating super healthy/organic.
- bcrosby95 3y ago
  Keep in mind we have 5 in our household to your 3. They probably eat cheaper food? We do a lot of fruits and veggies. But not organic. Eating out is too expensive, we don't do that. Also, I live in Southern California, it might be cheaper where you are.
  - goalonetwo 3y ago
    yeah, being 5 is a big difference. We usually end up going to Costco once a week for ~250$/trip
worthless-trash 3y ago
Tell me you have teenage boys without telling me you have teenage boys ;)

ocdtrekkie 3y ago

1. I'm not a software engineer, and don't live in or near the valley. 2. I'm married and I have two kids. It's amazing how fast multiple years of saving disappear when you have daycare. Just to give you an idea of what childcare looks like: It's a very reasonable question whether we should pay for childcare, or hire a full-time staff member for the household to watch the kids: The price is about the same.

goalonetwo 3y ago
Yeah I get it. It's not easy. As a rule of thumb we are still aiming to live with 70% of our household income even with a kid so to mitigate for one of us being laid-off unexpectedly. I guess it is a trade-off. We could live slightly better in a bigger house but I don't want to stress and be in a tough spot if one of us lose their job. That mental sanity is worth 30% of our income to me.

Spivak 3y ago

Same, my rule is my gross yearly salary or 24 months all recurring expenses whatever is larger. I try to set my lifestyle to where the 2 years expenses are 70% of gross salary which is honestly not terribly difficult as a dink. Peace of mind for the cost of "only" making 4.65% interest is well worth it to me.

Hamuko 3y ago

I'd rather not tip into my savings if possible. All of my savings are also not liquid.