Just realized my 'emergency fund' was way too small after talking to my neighbor

He's a freelance graphic designer and told me his rule is to keep a full year's worth of living costs in cash, not the six months everyone talks about. He said he got a major client who just stopped paying last winter, and it took nine months to sort it out legally. That hit different because I only have about four months saved and my biggest contract is up for renewal next quarter. How much do you all actually keep on hand?

3 comments

3 Comments

joseph_green139h ago

That sounds like overkill for most people though.

ruby_bell474h agoMost Upvoted

Have you ever had a client check bounce, @joseph_green13? My "overkill" fund is what kept the lights on when that happened to me. It felt like a silly amount to save up until I actually needed it. Now I see it as the cost of doing business on my own terms. That safety net means I don't have to panic and take any work that comes along.

henryr458h ago

Your neighbor is right. I got burned the same way when a client went under and owed me five figures. Four months of savings disappeared in six weeks. Now I keep a full year's expenses in a high yield savings account. It's not overkill, it's peace of mind when your income isn't steady. That cash buffer lets you walk away from bad clients too.