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How much cash in the bank ???

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Crazy Horse
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PostPosted: Wed Jan 03, 2018 6:57 am    Post subject: How much cash in the bank ??? Reply to specific post Reply with quote

The post below and the replies about being laid off and out of work gets a guy to thinking about how much readily available cash (or equivalent to cash) should a person have in the bank (or wherever you might have it)? I remember back when I was working before retirement, there were always some "recommendations" like to have 3 months or 6 months of your basic expenses readily accessible. And of course, the old "emergency fund" for things that you can't do without like big car/truck repairs, appliance purchases, etc. Internet searches show more reading on the subject than a person could get through (see one below) but it would be interesting to see what YT guys think on the topic. We're not asking for the amount you have stashed away but maybe what you think a person/family should have for time (say, in months) to get them through such situations. I would think that 6 months of basic living expenses would be a minimum, preferably more.
Money in the bank ???

 
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dpendzic
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PostPosted: Wed Jan 03, 2018 7:06 am    Post subject: Re: How much cash in the bank ??? Reply to specific post Reply with quote

I agree--6 months at a minimum
 
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Case e
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PostPosted: Wed Jan 03, 2018 7:08 am    Post subject: Re: How much cash in the bank ??? Reply to specific post Reply with quote

You ever check out Dave Ramsey. I kinda like the guy, he is very common sense and he isnt trying to sell you a bunch of stuff. He is a firm budgeter and helps out alot of people if they will listen to him. He is death on debt accept for a home mortgage and not over a 15 year fixed. He is worth a look.
 
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Brent Zappe
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PostPosted: Wed Jan 03, 2018 7:20 am    Post subject: Re: How much cash in the bank ??? Reply to specific post Reply with quote

This is a question that even I try to answer. If my dad was alive he could be yelling at me. Most people who lived threw the great depression would tell you that savings was the best way to have it. it is surprising to understand that the depression was brought up when banks had crashed with investing in to stocks but what we kids found out was that our parents had a lot of bank accounts in banks. Understanding that when Wall street crashes the F.D.I.C can not found the money in those banks. I told my dad that having some thing like houses, land, cars, and some money in bank. that this stuff could be sold and be used if I needed the money. I understand that maybe I might look like a stupid person but if you own some thing than it is worth some thing when some body wants it. I like to keep my options open I say. Let me just ask what would happen if the banks crash again. You had money in them but they did not have your money to pay your checks you wrote. What would you have to sell to pay bills and eat to live. Some thing to think about.
 
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rrlund
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PostPosted: Wed Jan 03, 2018 7:26 am    Post subject: Re: How much cash in the bank ??? Reply to specific post Reply with quote

Who knows. I sell some cattle,my bank account swells. If I have a lot of expenses before I sell anymore,it can get drained down there pretty low. As long as there are cattle standing out there and they're growing and not sick,they're money in the bank that I can look right at every day.
 
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grizz02
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PostPosted: Wed Jan 03, 2018 7:34 am    Post subject: Re: How much cash in the bank ??? Reply to specific post Reply with quote

Had a friend that passed away in 2010 he was 53 he was so tight with money he squeaked when he walked his net worth was around 4 million . does not do him much good now they don.t make luggage racks for hearses
 
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Dave H (MI)
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PostPosted: Wed Jan 03, 2018 7:46 am    Post subject: Re: How much cash in the bank ??? Reply to specific post Reply with quote

Six months is not enough. Not even close. Most everything in our lives is cyclical. So there are always bad times ahead. Very few people in the world today have true security. One major medical, a lawsuit, disability...you better have more than six months. Every few years it seems we have a big downturn somewhere and people start trouping thru my office with tales of despair. Back in 2008 people were losing their jobs and their businesses at a rate I never thought I would see. Homes were being lost. I carried a lot of old friends on my books for years. Mostly because they did not follow advice. That advice was to only buy what you had cash for. Borrow money to buy your home, never borrow against your home for anything else. 15 year mortgage as soon as you can swing it, it is not that much more per month than a 30 and the term savings are crazy high. If you are self employed, have more than one source of income. If you work a job, have a back door in case you lose it. And don't delude yourself that the money in the bank belongs to you if you are carrying around a big credit card debt. The answer to your question if you are sitting across the desk from me? There is no such thing as too much money in the bank or brokerage account AND too little debt.

Dave H (MI CPA)...first free advice of the season! Smile
 
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steve706
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PostPosted: Wed Jan 03, 2018 8:02 am    Post subject: Re: How much cash in the bank ??? Reply to specific post Reply with quote

I used to keep a minimum of one years wages banked plus a separate amount for unforeseen issues like the well going bad. In hindsight I regret it because divorce made it all pointless.....
 
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Steve@Advance
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PostPosted: Wed Jan 03, 2018 8:07 am    Post subject: Re: How much cash in the bank ??? Reply to specific post Reply with quote

I like Dave Ramsey's advise. Used to listen to him on the radio, haven't heard from him in a while.

My biggest problem is trying to reign in spending without creating havoc at home. Wife needs money for our necessities, but her and my ideas of necessities are way apart!

I have managed to not be in debt, not managed to sock away much in savings.

One thing I have done, that Dave and I agree on, tithe regularly!
 
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Welding man
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PostPosted: Wed Jan 03, 2018 8:49 am    Post subject: Re: How much cash in the bank ??? Reply to specific post Reply with quote

My dad grew up during the depression. He did not believe in banks. If he had money, he had it hidden somewhere. He cashed his Social security check the day he got it. When he passed away, I knew where part of it was hidden, my brother knew where more was hidden.We don't know to this day if we found it all. The only money he had in the bank was $500.00 in a checking account. He had never written a check on. He only had the account because the bank required it in order to get his other checks cashed.
 
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VADAVE
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PostPosted: Wed Jan 03, 2018 8:59 am    Post subject: Re: How much cash in the bank ??? Reply to specific post Reply with quote

If your counting on money in the bank to weather a depression like the '30s and the bank crashes it won't get it done. That's why those that lived then almost universally adopted the same attitude--a sock in the mattress for saving and not spending unless you had to.
 
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Eldon (WA)
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PostPosted: Wed Jan 03, 2018 9:06 am    Post subject: Re: How much cash in the bank ??? Reply to specific post Reply with quote


You only need a stash to preserve wealth....if you don't have anything to lose the gubmint will take care of you....
 
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dhermesc
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PostPosted: Wed Jan 03, 2018 9:38 am    Post subject: Re: How much cash in the bank ??? Reply to specific post Reply with quote

Dave Ramsey is OK for people that can't handle money. But his advice on "building wealth" is so out of touch with reality that he ticks me off. He basically claims every investment fund should be making 10% or more. But for some reason he keeps those funds a huge secret and has never let anyone know what he's invested in that makes 10% year in and year out. He's way to much into turning your cash over to the shysters that run the stock market.
 
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used red MN
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PostPosted: Wed Jan 03, 2018 9:54 am    Post subject: Re: How much cash in the bank ??? Reply to specific post Reply with quote

I was feeling poor and horrible until I saw Steve?s last sentence. Praying I never endured that.
 
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davpal
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PostPosted: Wed Jan 03, 2018 10:02 am    Post subject: Re: How much cash in the bank ??? Reply to specific post Reply with quote

I guess my answer is you should have as much money in the bank as possible. Cash is always king. I never hear anybody complaining they have too much money. Most of the complaining is how much money people are lacking. My heat bill is high, my car insurance is high, car payment is high, groceries are expensive, medical bills are high,and so on and so on. All those things are not that big of a deal if you have MONEY to pay them. It always astonishes me how much material crap people buy and put themselves in a situation of having no spendable cash. Paycheck to paycheck is the american way.
 
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