Should businesses & citizens

jecornel

Plan for future events that put them in situation where they have to get by for a minimum of three months with no revenue or income?

Is that a good or bad idea?

PurpleThrobber

jecornel said:

Plan for future events that put them in situation where they have to get by for a minimum of three months with no revenue or income?

Is that a good or bad idea?

It's been conventional financial planning wisdom for decades to have six months of emergency funds set aside to cover living expenses.

Instead, newest version of iPhone, every Cable channel under the sun, pinot and pallet painting parties, cigarettes, getaway weekends with the girlfriends, gymnastic lessons,.....whatever the fuck else people spend their money on instead of having a savings account.

Pitchfork51

PurpleThrobber said:

jecornel said:

Plan for future events that put them in situation where they have to get by for a minimum of three months with no revenue or income?

Is that a good or bad idea?

It's been conventional financial planning wisdom for decades to have six months of emergency funds set aside to cover living expenses.

Instead, newest version of iPhone, every Cable channel under the sun, pinot and pallet painting parties, cigarettes, getaway weekends with the girlfriends, gymnastic lessons,.....whatever the fuck else people spend their money on instead of having a savings account.

If Kim Kardashian doesn't have one I don't want one

SFGbob

For many people most of their savings are in their 401Ks. Why not allow for penalty free withdrawals in these kind of emergencies?

dflea

SFGbob said:

For many people most of their savings are in their 401Ks. Why not allow for penalty free withdrawals in these kind of emergencies?

This is a good idea.

PurpleThrobber

SFGbob said:

For many people most of their savings are in their 401Ks. Why not allow for penalty free withdrawals in these kind of emergencies?

I would suggest a penalty free loan instead with a specified payback time. Otherwise, you're just kicking the can down the road. The term could be based on the 401K participants age vs. retirement age. So if I'm 64, I would have been drawing on that 401K in a year or so - I get a year or some multiple thereof to pay it back. If I'm 50 and a dumbfuck who didn't save, I can take a loan from the 401k but I have 15 years to pay it back (so I'm not behind the 8 ball down the road and poor when it comes time to retire - replenishing it systematically so to speak).

YellowSnow

PurpleThrobber said:

jecornel said:

Plan for future events that put them in situation where they have to get by for a minimum of three months with no revenue or income?

Is that a good or bad idea?

It's been conventional financial planning wisdom for decades to have six months of emergency funds set aside to cover living expenses.

Instead, newest version of iPhone, every Cable channel under the sun, pinot and pallet painting parties, cigarettes, getaway weekends with the girlfriends, gymnastic lessons,.....whatever the fuck else people spend their money on instead of having a savings account.

We've always made is a goal to have a minimum of 6 months net combined take home pay in the bank. I get that this isn't realistic for everyone's circumstance but the who thing about the average household having less that $1000 in savings if beyond FS.

RoadTrip

SFGbob said:

For many people most of their savings are in their 401Ks. Why not allow for penalty free withdrawals in these kind of emergencies?

Because privatized retirement savings and investments aren't equal to government pigs.

HHusky

SFGbob said:

For many people most of their savings are in their 401Ks. Why not allow for penalty free withdrawals in these kind of emergencies?

There are some exceptions already, but I agree this should be made explicit and simple in light of circumstances.