How much in the bank?

[Animeniax]

So I found out today the average American (US) has $10k in debt, and $0 savings in the bank, a fact that boggled my mind. Since I started working after college, I always made sure I had at least $3k in the bank, in case I lost my job or another emergency occurred. Now I have considerably more than that in the bank, but I'm wondering what most people think is an appropriate amount of savings for the rainy day.

[Assertn]

Liquid assets in a savings account should be enough to cover 3-6 months of expenses. Deviation is attributed to your level of risk-tolerance.

In other words, if you typically budget $1000/mo for bills, food, utilities, etc, then you should have $3000-6000 in your savings account.

This is what a financial adviser would tell you.

[Animeniax]

Originally this was going to be a bragging contest about how much money each of us actually has in the bank, but then I remembered a lot of people here are still in high school or college and are broke. Of course they can always ask their parents for money, but as for the rest of us working types, I was wondering how much people keep in their bank accounts to feel secure and prepared for unemployment or a disaster.

[Death BOO Z]

i've got around 10k of NIS (about 3.2k$), mostly from my job before the army, and the salary from it.
however, I'm still living in my paraents house, and don't have living expences. so i don't count.

[Assertn]

I prefer to freeze up most of the money that I don't need anytime soon into stocks and such to get better returns.

I do, however, have about $20k in savings so far for a potential down-payment on some property.

[itadakimasu]

The idea of saving enough for 3 months of living expenses is a good idea.

I generally keep around $2000 in savings but right now the banks looking a little bare because i've been spending alot and I have alot of stuff I haven't put on ebay yet. I bought my dad a tv for fathers day and meant to put it on my credit card that has no interest until next year but I accidentally paypal'd it out of my checking and whiped out half my account.

Since october i've been investing alot of money in Dell desktops and servers and have been reselling them for extra money ($12,000 total in the past year, 25-40% profit margin)

[Ryllharu]

I keep around the 3 months of expenses in the bank. Good thing too, because when I needed to quickly buy a new car, it made for one hell of a down payment. And since I was currently living at home, just fresh out of college, I was able to fill it back up within two and a half months of pay.

Now I just keep loading that savings account with whatever overflow I have from my living expenses and various purchases.

I don't invest a whole lot, but when I get a raise, I intend to take exactly the amount I gain directly into my retirement plan. Never saw it? You will never miss it.

[Munsu]

$100 billion

[David75]

Around kUS$ 12 aprox 6 to 8 months expenses.
Plus some other values I would need to convert.

Wife has a lot more, but she's even more the saver type than I am...

[Assertn]

Honestly though, there are many different ways to allocate your money...it all comes down to three different factors:

1) accessibility
2) risk tolerance
3) allocation size

Obviously, the less accessible, higher risk, and higher allocation you're willing to go, the better your returns can be. The highest in this regard are typically company shareholding.

Conversely, the most accessible, lowest risk, and lowest allocation requirement would clearly be cash in your hand, which of course results in 0 returns.

Actually, I lied. When viewed from an economic-level perspective, the latter results in negative returns. If you assume an average inflation rate of 4% per year, then your money needs to earn 4% interest per year just to preserve its buying power.

This also means that a savings account that earns 0.1% interest per year results in your assets depreciating by 3.9% per year.

Money Market is the bare minimum to break even, but money that you plan to keep for retirement should definitely be frozen in equities with larger ROIs. Even more conservative stock investments will allow you to reap much greater gains. After all, the average returns from the market over a 10 year timespan is typically 11%.


Long story short.....
If you have more than a year's worth of expenses sitting in a savings account without any short term plans of spending it, you need to fix that.

[Board of Command]

Nearly $14000 in my savings account.

I plan on moving some of that into retirement savings in the near future.

[Assassin]

do you guys have seperate accounts for daily stuff and savings? Cuz i just have a savings account, and anything i makes goes into that....and i just take out whatever i need, as either cash or debit.

I only have about $600 in there rite now, which technically isn't even my money (yay for osap). Now that im working though, hopefully that will change...but honestly, till im done school and officially enter the working world, i dont see the point in saving up. I barely make enough to cover my costs anyway. Last summer i made like $1500 ish, which over the span of 4 months amounts to jack shit. Not enough to earn any reasonable interest, not enough to invest. I'd much rather use that to increase my quality of life (read: chilling).

[Board of Command]

do you guys have seperate accounts for daily stuff and savings?

Yes. I put all my earnings in the savings and only keep enough in my chequings for stuff like rent and regular expenses.

$13700 in savings
$1300 in chequing

[Animeniax]

Typically savings accounts allow limited transactions per month, so its better to have a checking account for liquid funds. Most of my money is tied up in CDs, stocks, and a savings account, with a money market account for monthly use.

@Munsu: I forgot how much #2 said the legitimate evil empire was worth, but no government ever paid up the $100 billion so he doesn't have that in the bank.

[Board of Command]

Aside from cash, I really don't have any assets aside from my computer parts. It's not a very good investment but it keeps me happy...

[Animeniax]

Yeah but you're young and on a great career track, so there's no need to save much. Plus you have your parents to help out if the need arises.

I think I have more in my 401(k) than most people here have in their total savings. And no, I'm not 42.

[The Heretic Azazel]

I have about 800 dollars saved up, but since I'm about to quit my job that shit will go fast.

[David75]

Yeah but you're young and on a great career track, so there's no need to save much. Plus you have your parents to help out if the need arises.

I think I have more in my 401(k) than most people here have in their total savings. And no, I'm not 42.

We're only talking about bank accounts right?
Because Real estate for example isn't the reliable asset you'd think it is, with massive downfall in the US and crisis starting about almost everywhere on the planet...

[Animeniax]

Right, only liquid assets, unless you don't count CDs as liquid assets, though they are easily converted to liquid minus a penalty. And being an American thinking about buying a house myself, I know real estate is an uncertain market these days, but it's a cycle so it will come around in a few years. Might be good to buy some property now so when the sector recovers, you're in the green.

[Assertn]

Yeah but you're young and on a great career track, so there's no need to save much. Plus you have your parents to help out if the need arises.

http://www.fool.com/personal-finance...challenge.aspx

The sooner you start, the more exponential the realized gains will be.
Don't use youth as an excuse to slack off!