My savings account is with Bank of America. On the main page of the website BoA has a calculator that predicts how much you will have waiting for retirement (after answering a couple quick questions). I pretty much love financial calculators. They help me set up a game plan to reach a goal.
I wrote about my decision to beef up my savings account, even though I have more than six months of expenses in it? Why? Six months isn’t enough to make me feel all warm and fuzzy inside. I’ve been fortunate enough to never have to use my savings account for anything….ever. I’m not ignorant, however. I know one day my car will break down, or I’ll lose my job, or maybe get struck by lightning (that would be kind of sweet).
Something unexpected is going to happen to just about each one of. The larger the savings account, the less impact the unanticipated expense will have. There are a couple traditional recommendations for savings accounts.
1) If you have non-mortgage debt you only keep $1,000 in savings until you pay it all off. This is the Dave Ramsey plan. I totally understand the logic behind this, but it’s just not my style. A grand in the bank would make me break out in a cold sweat. I need more on hand to feel secure.
2) Three to six months in the bank. This was the method I subscribed to. I worked hard, spent little, and saved diligently. About four months ago, I accumulated enough to reach six months of expenses in the bank. It was quite an amazing feeling.
3) Do whatever the F you want plan. Maybe you’re allergic to saving money. If that’s the case, then you probably wont have any money in the bank, but you will surely have plenty of credit card debt. The “do-whatever-the-F-you-want” plan works both ways though. There are some people that are addicted to saving money. Every now and again, I’ll watch a little Suze Orman. Sometimes people call in and have like $250,000 in the bank. That’s a boatload of moolah.
So now, as always, I leave with a question to my
wonderful bootylicious readers. What’s your number? How much green do you have to have in the bank to feel “secure.” I’ve put in my head that $30K would be a great number (don’t ask me why, ’cause I have no logic). Let’s make it a two part question, what do you have in your savings and what would you ideally have it be at this point in your life. Don’t be a douche bag and say you want a bagillion dollars. Drop a line and let us all know what “your number” is 🙂