Emergency (and other) Savings?
Find a Conversation
|Sun, 05-04-2003 - 12:39am|
I've been thinking about how quick I could pay off debt if I put ALL my extra money into it. Then again, if I put ALL my money towards debt and have NO savings, what happens when I have an emergency? That's right, back further in debt.
My minimum monthly debt payments are about $135, typical payment is $200 or more. But I'm also putting $50 pretax every 2 weeks into retirement (they match $100), payroll direct deposits $25 per paycheck into my son's 529, and I've started putting $50 per paycheck into ING for emergency savings. Actually, some say 10% should go to savings and that's what I put in this time. I have a large student loan "refund" coming this week and I think I'll put 10% of that to savings too.
My parents didn't have college money set aside for me or my sibs - we are paying our own way through scholarships, grants, loans, work. Now, I personally want to pay for 1/2 of my son's education. He's 3 now, and by the time he gets to college it could be $200k for 4 years of public school! All the more reason to start saving now. And I never thought about retirement funds until I got this job in staff benefits. And I realize by the time I'm of retirement age, I can't plan on a penny from social security, so the sooner I start saving, the more money I'll have to live comfortably in my old age. I only started my retirement account this past November, and DS's 529 this Jan, and I've already built up $2200!
"Experts" have said you should have 3 months worth of living expenses, in some liquid (accesible) emergency fund. Given the current economy, some are now saying 6-9 months worth due to so many people getting laid off. Seriously, do the math and think about those numbers for a minute. Anyone, any comments?