lauriluillier
New member
How many months of expenses do you have saved and why? Is there any research about what is the optimal number of months? What would be too little and what too much from a objective point of view?
Months of expenses
- Thread starter lauriluillier
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@lauriluillier 6 months here, family with 2 kids. Rest is invested.
@lauriluillier 6 months but in Switzerland if you have a decent job and a frugal lifestyle even if you go unemployed you will survive on unemployment alone. So if one is more at ease with risk, 3 months is good enough. 100k in the bank is a bad idea unless you need the money soon. But that’s just an opinion. 100k in a good year without doing much you can get 10k more on a good ETF. You might say can one might loose it all the following year and yes it’s true, but we don’t blow this planet to pieces, things always come around. It’s all about risk resistance and age.
@m4m You need some savings to bridge period between last day of work and ALK payment kick in. If you had decent / good job and you were fired, you'll probably have full month of 'penalty' aka 'franchise' and then first money comes at the end of next month. So 2 months is definitely recommended to have to bridge the gap without stress killing you. Unemployment is 70% of insured salary so if your expenses were at 100% of insured salary or higher - your full salary, you're in a pickle without savings.
virginiaann
New member
@lauriluillier Four months cash, two more months credit card, rest invested. The cash part seems overkill at times, lowering it further gives me anxiety though.
"Objectively" idk.. Is there an objective number? I think you need to take your situation into account, what's the most likely "emergency" you could face? Unexpected tax bill, car breaking down, house blowing over?
"Objectively" idk.. Is there an objective number? I think you need to take your situation into account, what's the most likely "emergency" you could face? Unexpected tax bill, car breaking down, house blowing over?
@lauriluillier 3 months. All remaining cash is invested
jjmaleyscw
New member
@lauriluillier Zero. I invest 100%. I only have 6 years of expenses covered though.
@jjmaleyscw This is the way.
@jjmaleyscw 6,77033 years here 
@jjmaleyscw I dont get it. Are u saying your investments are worth 6 years expenses? (At current market levels)?
jjmaleyscw
New member
@johng3624 Yes I could stop working for 6.5 years with these savings, assuming zero growth. My retirement goal is to get to 30 so I still have a long way to go.
@jjmaleyscw If they’re investments, you have to assume negative (not zero) growth as the emergency situation
jjmaleyscw
New member
saintslass
New member
@lauriluillier 6 months. I will probably be able to find another job within a week in my sector (IT), but you never know.
2 months + 1 "month" for unexpected expenses would probably also suffice if you have your financials planned.
2 months + 1 "month" for unexpected expenses would probably also suffice if you have your financials planned.
@lauriluillier I know I have way too much cash on hand and yes getting 0%. I was out of work as was the GF now wife for a LONG time and we were drained to almost nothing at one point.
Simply put I am too scared to invest money outside Pilar 2 and 3 and keep all of it the bank 140k by now. I do however own a house so everything else is tied up into that.
Simply put I am too scared to invest money outside Pilar 2 and 3 and keep all of it the bank 140k by now. I do however own a house so everything else is tied up into that.
@lauriluillier 12 months (burnrate in Switzerland) + money for a big trip around the world (in cheap countries) + 20k for big surprise spendings. Maybe a bit overkill? I tend to be on the more anxious side of things tho... 
@lauriluillier Maybe another take regarding emergency fund: I believe it makes more sense to think about the highest financial risk.
Example: Your highest risk might be loosing your car. So you look for alternatives on car trading plattforms and save the money you'd need to get a new car.
In Switzerland we are generally insured quite well which is why loosing a job isn't a "high" risk for example.
Example: Your highest risk might be loosing your car. So you look for alternatives on car trading plattforms and save the money you'd need to get a new car.
In Switzerland we are generally insured quite well which is why loosing a job isn't a "high" risk for example.
wonkydonkey
New member
@lauriluillier Less than 1 month salary but i have a very safe job. No wife/kids and still quite young so i dont see the point of keeping more in a bankaccount.
If you live alone and your job isnt very safe i would say around 3 months of salary is enough, with family 6 months.
If you live alone and your job isnt very safe i would say around 3 months of salary is enough, with family 6 months.
@lauriluillier 12 months forecast expenses including accruing income / wealth tax and insurances.
I’m seeing too many of my friends on extended unemployment currently.
I’m seeing too many of my friends on extended unemployment currently.