8 ms·

I don't care how poor you are, or how little you make, 12 months of savings is a MUST. I simply can't imagine living paycheck-to-paycheck like that.

potatolicious 17y ago
To add to your point: don't just save, have a pre-sorted plan to reduce your burn rate drastically. Always know the barest minimum burn rate you can have, and keep plans to take it down that low if necessary. A lesson I learned from my student days, when money was highly variable month-to-month. I don't do so right now, but I can take my food budget down to about $200 a month in a pinch, and shed a lot of other expenses (Netflix, VPS, etc) with little to no penalty. Keep your head in reality and know what in your life is a luxury and what is a need.
abalashov 17y ago
That's easy to say...
timwiseman 17y ago
I agree with the concept, but it is hard to do when you are on the low end (and can take time to build up), and if you are on the very low end 12 months of savings for normal expenses can get wiped out with just a few minor emergencies.
- abalashov 17y ago
  Yep; that's the thing that people who didn't grow up poor miss. The 'cost' of being poor (as a percentage of income, not as an absolute figure!) is higher for poor people than the 'cost' of being well-off is for well-off people. Late fees, overdraft fees, frequent maintenance expenses stemming from owning and/or driving crap, higher interest rates, other types of pricing premiums for things stemming from their being inferior status as a buyer or a borrower of various goods and services, health, etc. Add to that the pervasive psychological and physiological pathologies unavoidably common among poor people - whatever you think of how that reflects on their "responsibility" - and the external costs of those, and, well, you get the idea.

8 ms·

I don't care how poor you are, or how little you make, 12 months of savings is a MUST. I simply can't imagine living paycheck-to-paycheck like that.

by maukdaddy 17y ago

potatolicious 17y ago
To add to your point: don't just save, have a pre-sorted plan to reduce your burn rate drastically. Always know the barest minimum burn rate you can have, and keep plans to take it down that low if necessary. A lesson I learned from my student days, when money was highly variable month-to-month. I don't do so right now, but I can take my food budget down to about $200 a month in a pinch, and shed a lot of other expenses (Netflix, VPS, etc) with little to no penalty. Keep your head in reality and know what in your life is a luxury and what is a need.
abalashov 17y ago
That's easy to say...
timwiseman 17y ago
I agree with the concept, but it is hard to do when you are on the low end (and can take time to build up), and if you are on the very low end 12 months of savings for normal expenses can get wiped out with just a few minor emergencies.
- abalashov 17y ago
  Yep; that's the thing that people who didn't grow up poor miss. The 'cost' of being poor (as a percentage of income, not as an absolute figure!) is higher for poor people than the 'cost' of being well-off is for well-off people. Late fees, overdraft fees, frequent maintenance expenses stemming from owning and/or driving crap, higher interest rates, other types of pricing premiums for things stemming from their being inferior status as a buyer or a borrower of various goods and services, health, etc. Add to that the pervasive psychological and physiological pathologies unavoidably common among poor people - whatever you think of how that reflects on their "responsibility" - and the external costs of those, and, well, you get the idea.