[E90Newbie]

What's the right amount of money to keep in savings? You know.. that "In case shit happens" fund.

Not a dollar amount since we all are at different places in life, and different regions have different costs of living... but in relative terms (i.e. 2x monthly home mortgage, or 1x monthly salary, or 2x all monthly expenses, etc..)

I'm in the process of selling my in-city condo, and moving to the suburbs. I'm trying to weigh the options of putting $X down on the house down-payment, or keeping $X in liquidable cash (i.e. savings in the bank).

[Josh49]

What career field are you in?

I guess what I'm looking for is how stable your current job is, and how fast you'd be able to get another job if "it happens"

[Josh49]

Another way of asking would be, how long would it take you to get another job if your current job ended today..

[BMW F22]

Although I dont remember exact the length of time, your savings should last you 3-6 months. In other words it should support you and your needs for 3-6 months.

[Poderes1]

Originally Posted by E90Newbie

What's the right amount of money to keep in savings? You know.. that "In case shit happens" fund.

Not a dollar amount since we all are at different places in life, and different regions have different costs of living... but in relative terms (i.e. 2x monthly home mortgage, or 1x monthly salary, or 2x all monthly expenses, etc..)

I'm in the process of selling my in-city condo, and moving to the suburbs. I'm trying to weigh the options of putting $X down on the house down-payment, or keeping $X in liquidable cash (i.e. savings in the bank).

You should keep 3 to 6 months of income in an emergency fund. When you sell a property, usually you have to pay capital gains tax on the profit that you may have made from the sale. If you put the money from the sale of the condo into a 1031 exchange, you will have saved yourself from paying the capital gains tax. When you get into your new suburban property, you usually have to put anywhere from 10 to 20 percent down to avoid PMI (Private Mortgage Insuarance). Make sure you Mortgage is a Fixed Interest Rate Traditional Mortgage either 15 or 30 year whatever you decide you think you can pay off your mortgage. Hope that helps. If you need some more secrets let me know.

[Nikki]

6 months income, to be on the safe side.

[E90Newbie]

Originally Posted by Josh49

Another way of asking would be, how long would it take you to get another job if your current job ended today..

I'm a software engineer in Seattle. It's tough to say for sure because tech-interviews are hit-n-miss. Even the most experienced engineers can walk into an interview and totally bomb it because the questions they ask are so random. That said, there are enough tech companies in the area that I'm confident I'd land a job in 1-3 months <cross my fingers>.

Originally Posted by Poderes1

You should keep 3 to 6 months of income in an emergency fund. When you sell a property, usually you have to pay capital gains tax on the profit that you may have made from the sale. If you put the money from the sale of the condo into a 1031 exchange, you will have saved yourself from paying the capital gains tax. When you get into your new suburban property, you usually have to put anywhere from 10 to 20 percent down to avoid PMI (Private Mortgage Insuarance). Make sure you Mortgage is a Fixed Interest Rate Traditional Mortgage either 15 or 30 year whatever you decide you think you can pay off your mortgage. Hope that helps. If you need some more secrets let me know.

Thanks for the advice on the 1031. I might be able to get away with doing that since the "house" that I'm moving to in the burbs is technically classified as a "condo". I'll definitely look into it, although I don't understand the whole thing about using a Qualified Intermediary. As for the PMI, I'll be getting a 80/20 loan to get around that (that's what I had to do with my first place too). As for the type of mortgage, my GF works in the HR staff for Bank of America and has connections in the company that will get us the best loan possible (unfortunately, since we're doing a 100% loan, it probably won't be a fixed rate).

Another question.. even if I can make the 1031 work. Would it be better to take the hit on taxes and keep the capital gains as liquidable savings?

[Josh49]

Yeah, I'd say total living expenses for 4-5 months should do it for you then.. And plan for how you are living now..

[Josh49]

Even though if "it" did happen you probably wouldn't spend as much as you did until you got another job..

I think that should work..

[Poderes1]

Originally Posted by E90Newbie

I'm a software engineer in Seattle. It's tough to say for sure because tech-interviews are hit-n-miss. Even the most experienced engineers can walk into an interview and totally bomb it because the questions they ask are so random. That said, there are enough tech companies in the area that I'm confident I'd land a job in 1-3 months <cross my fingers>.





Thanks for the advice on the 1031. I might be able to get away with doing that since the "house" that I'm moving to in the burbs is technically classified as a "condo". I'll definitely look into it, although I don't understand the whole thing about using a Qualified Intermediary. As for the PMI, I'll be getting a 80/20 loan to get around that (that's what I had to do with my first place too). As for the type of mortgage, my GF works in the HR staff for Bank of America and has connections in the company that will get us the best loan possible (unfortunately, since we're doing a 100% loan, it probably won't be a fixed rate).

Another question.. even if I can make the 1031 work. Would it be better to take the hit on taxes and keep the capital gains as liquidable savings?

I don't know about you Newbie but i just hate paying taxes. Its better to do the 1031. The only way I would take the hit on taxes and use the gains as liquidable savings is if I had plenty of tax deductions that would reduce the hit on taxes gradually. For example, If you had a contributory IRA or SEP IRA in which the contributions are both tax deductible (SEP IRA is when you are self-employed), Individual Health Insurance plan (also tax deductible) and so on etc...

[E90Newbie]

Thanks to everyone who responded. It was interesting that three people from all different areas (Bay area, Florida, Boston) all came up with the same "3-6 months" conclusion. I was personally thinking 2-3 months, but 3-6 months makes more sense.

[UncleWede]

Isn't the lighter side normally for jokes???

The above responders have obviously listened well to banking industry ads. I too would say what they have, although I'm not sure I practice it . . .

[ejheverest]

i keep 3 months in my emergency fund plus, most of my investments are from stocks so in an emergency i could cash out. (engineer on 900' ships is a volatile job)