I realize that this decision is highly personal, there is no right or wrong answer, and there is boatloads of information out there on the web about this. I’ve done a substantial amount of reading on it, but I am still interested in other people’s opinions. Here are my details:
My husband and I make about $140K a year We have roughly $4513 in fixed costs per month (mortgage, property tax, water bill, electric etc) We spend roughly $1188 a month in gas, groceries, and random household supplies We set aside roughly $142 a month for gifts, christmas, birthday parties etc. We set aside roughly $215 a month to replace big items when they fail (roof, heating etc.)
All of this I would like to consider as essential for this excercise (in reality if I had to choose between feeding my children and setting aside money for my roof that is only 5 years old – I would feed my children; but I’d like to not have to stop setting aside funds for a roof in the case of temporary job loss, so I am planning for it now)
My husband (who makes about $20k less than me) is almost 1 year through a 2 year contract; but they have promised him a permanent slot once someone retires. My position in incredibly stable, union protected and it take an act of god to fire someone. I’m more likely to rage quit than to be fired.
My current target is to save 6 months worth of the above named costs; meaning that both of us could lose our jobs at the same time and we could still meet all fixed costs, eat, and have $ to still buy gifts for folks – that would be $36,360. Currently I have $28,800 set aside.
I should note that we also max out my allowable retirement contributions, contribute enough to pull in all available employer match for my husband, and we both have pensions.
Would you continue savings towards the $36K goal?