When it comes to the emergency fund, i know 6 months is always the best. But is there ever a reason to go for a 3 month?
im single, and live by myself. My job is an IT union job, but it technically is TLT (fully employed w/ full benefits but has an end date) and I can "reapply" to extend it and when a permanent opening is available I would slide into that.
Would it make sense to just a 3 month since im by myself and my job is protected by the union, or with how shit the IT job market is, best to just do 6 months?
Posted by Wah_Day
6 Comments
Are you good elsewhere? Like 401k etc?
Depends on your risk tolerance and future job security/stability. I 100% know I’m not losing my job and my wife is 80% never losing hers. We’re comfortable with 3.
It’s very much a personal decision.
The 6 month number also is just a good benchmark for other unexpected expenses in life (not just job losses).
E.g., car purchase or repair, unexpected travel, medical situations, etc.
I think because your job has an end date, that’s reason to have 6 months just in case. You never know if your employer decides not to extend your contract and the job market sucks right now. You won’t regret being too prepared.
Usually 3 months is only recommended for married couples where both spouses have stable jobs. That way, if one gets fired, the other is still bringing in income.
with a TLT position 6 months is worth it if you can manage it. the end date adds real uncertainty – you could be job hunting without income coming in. if the 6 months feels too constraining, at minimum get 4 months before you start investing aggressively. the extra cushion costs you almost nothing in opportunity cost but buys significant peace of mind