PLEASE GOD, Just Give Me One More Oil Boom. I Promise Not to Blow It Next Time.
Remember these bumper stickers from the 1980's? When I entered the oil industry a relative of mine told me to save three months salary then save three more and then think about saving some more. What is your approach to emergency savings for a downturn in our industry?
Have a spouse with a good job in another field. Limit total expenses to 50-60% of joint income. It’s easy to save and not so bad if one of you is out of work for a few months.
I was told about this when I joined XOM in the 2000s. All set for retirement because I listened to my mentors.
Be nice to the older employees. They will tell you how to avoid their pitfalls.
I have about 12-14 months of monthly expenses saved up in liquid accounts. I'm 32 and was PIP'd, however, I was fortunate and did not have to tap into any savings before securing a job within a month of my last day at XOM. The experience was a real eye opener and it made my wife and I appreciate storing up extra cash over the years. You just never know when you'll need it. We took a very active approach to saving and budgeting during the 2015-2016 downturn and haven't wavered since. The biggest fear we had was going without insurance while she was pregnant, but fortunately we did not have to go through that. I'll always throw the Dave Ramsey plan out there for folks who don't know where to begin.
6 months in a good economy, 1 year in a bad economic situation.
Don’t forget to count for health care, if you want Cobra it’s going to be like $500+...
6 month's expenses in checkings and high yield savings account. All the rest goes into investing and retirement. Don't have a whole year's worth sitting in the bank unless you just want to depreciate your money (inflation is a thing) or unless you're close to retirement.
Honestly, I just don't spend that much money to begin with so the money starts piling up especially when I'm making $100k+
I’m three years with the company and have 6+ years of expenses in savings. I’m frugal.
One year’s salary was the goal....but I definitely couldn’t get there in the first 5 years of my career.
The new goal is to have enough in non-retirement investment to have a ‘survivable’ family income on annual divided / investment earnings and a very basic/common job. Almost there, but had to halt the ‘lifestyle creep’ around year 5.
I know meager spending is the right decision, but I still get a little secretly jealous of peers with large designer houses and extravagant vacations.....or bashful when peers seem to think I’m some sort of urban hippie. Whatever. And heck, my kids are still growing up with a very comfortable life.
Have enough to retire
Good luck with that.
You need to have at least 1 years salary in your checking/savings account to survive a downturn.