I have a savings account that pays like 2% interest and a car loan that's costing me 6% interest. Obviously I'm not coming out ahead. I'm at the point now where I could basically empty my savings account into my car loan and be even all around, but I'm afraid to live life without that "safety cushion" of money in savings. How much should I have in savings in case something awful happens, like I lose my job? Is there a rule of thumb or is it just whatever I'm comfortable with?
metawidget answered Sunday November 2 2003, 6:28 pm: I think the standard, somewhat unrealistic answer is 3-6 months' basic expenses in the bank... if your employment situation's more precarious, I'd try to keep that level up. If it's more stable, whack as much of that car loan as you're comfortable with and build your savings back up. I live one month from insolvency as a working student, and I survive pretty well with a little help from my friends and family.
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