<p>Most of the people I know who don’t have an emergency cushion don’t have the credit to be able to have a line of credit. Ofttimes their credit cards are their emergency line of credit and that just starts the whole downhill slide…</p>
<p>I guess the line of credit makes sense… At this stage of life we are trying to pay as much as humanly possible with cash to avoid any extra monthly payments… I would rather have liquid cash to pay for most types of emergencies because losing a chunk of that would be much less painful than taking on any kind of extra monthly payment, even if it does mean we’re losing out on interest-- if we had more wiggle room in our monthly budget that might be different I suppose. With how unstable things are lately, I’d be afraid to pay for a big mishap with credit for fear that someone would lose their job or something… </p>
<p>I guess in a perfect world you’d have some sort of balance between the two possibilities. I can see the argument for not wanting a large sum of money to just sit in an account where it’s not building, but I wouldn’t want to be relying on credit for everything that goes wrong, either. We’re young now but our current attitude is that my student loans and BF’s future mortgage are all the debt we can afford right now, we’d best have money set aside for anything else we might need. Anything else is not an option, we don’t even use credit cards except to pay in full each month. I don’t really see that attitude changing much… but I could see us investing as long as we had a good chunk of liquid cash set aside, too. Barring the most catastrophic of occurrences, I wouldn’t want to rely on credit.</p>
<p>
</p>
<p>Sounds great, but not sure how true it is. Sure if you become a doctor your salary will be much higher than if you weren’t a doctor BUT of course the whole loan things throws that for a loop 
But just because you have a Masters or even a Doctorate doesn’t mean you’re going to make a lot of money…</p>
<p>My d just told me the other day that she was going to the bank to try to invest some money. She said she has $35,000 -2 years out ofcollege, and after giving several thousand to less fortunate friends and contributing to her employer’s 401k. She still has her first car - thenew one we gave her as a college soph, due to hercollege costing us very little. She’s also had her own apt since graduatin. She makes good money and isn’t very interested in spending much. Maybe she wll support us and her brother in our old age.</p>
<p>We didn’t aggressive about long-term saving until we were finished paying for day care, had DH’s loans paid off and had a down payment for a house. (NO parental help, for college or any other expense since we graduated from HS). By that point, we were 37 and the kids were in elem school. Since then, it’s been 401(k) and college expenses. </p>
<p>It is a lot easier to save when one isn’t living in a McMansion and drives vanilla cars until they die.</p>
<p>Many people don’t save while living in teeny weeny homes also, and many people who live in so- called McMansions save plenty…stop with the sterotypes. ;)</p>
<p>
</p>
<p>The investment company in the bank branch is not necessarily the best or lowest cost option for investing. She may want to visit the library or internet and read about personal finance and investing before shopping for any investment.</p>
<br>
<br>
<p>My sister makes $120K+ as a nurse. Her husband makes about $40K (no degree but he enjoys what he does). Perhaps nurses get a lot more on the coasts. An accountant with ten years should be making more than $40K, at least in my area.</p>
<p>That’s a very nice combination: accountant + nurse. The accountant can handle the investing and manage the finances and they both have jobs that are needed by society.</p>
<p>who knows where they live or what their cost of living is.</p>
<p>I will say by the time I was 25 I had about 35k in cash saved up, and a small amount in my retirement fund. I put my 35k down on a house. I’m 29 now and probably have about 35k in between my retirement and my bank account. If I were to sell my house i’d get that 35k back that I put down on it… I’m pretty good with money… never pay interest on a credit card and try to stick to a budget.</p>
<p>Could I be better? Sure - I love vacationing and this is the time to do so while I have no children.</p>
<p>That being said, not everybody is very good with money. student loans get in the way, car/house problems, etc.</p>
<p>I try to keep about 5k in an ‘emergency’ fund for any issues that may arrive. I once had to install a new sewer in my house. That took 1500 of my fund. I then paid myself back.</p>
<p>and ema, if your boyfriend is making “only” 60k… it sounds like he’s doing quite well. That’s a great salary where I’m from - even for people with a degree working for 10 years.</p>
<p>
</p>
<p>It is here, too. I didn’t really think about how I was wording that… I didn’t mean to make it sound like I think he doesn’t make good money, he has a wonderful job with a very generous company. We wouldn’t be where we are without them.</p>
<p>I think I was thinking more along the lines of the fact that my parents and most other adult people I know make 100k+ and have a lot less in savings than he does. I didn’t mean that comment the way it apparently came across!</p>
<br>
<br>
<p>That’s scary.</p>
<p>Even if we’re not talking about 401k, inaccessible sort of funds? I know my parents have a lot more than that in retirement, but their regular savings accounts are comparable to mine.</p>
<p>I really had no idea that most adults just sat on that kind of liquid cash. I know I certainly aspire to but I didn’t think it was normal to do so.</p>
<p>Americans don’t save money.</p>
<p>This should not be shocking to anyone.</p>
<p>
</p>
<p>You should ALWAYS have at least an 8 month emergency fund. If your expenses are $2k a month, you should have $16k saved in either a savings or checking account you can easily access.</p>
<p>
</p>
<p>This is a very stupid thing to do.</p>
<p>
</p>
<p>I wish I made the kind of money you make… I’d love to have more in savings and I’m trying but life happens. I’m just happy I’m going to be able to pay for my Masters out of pocket and not have to take out any more loans…</p>
<p>
</p>
<p>Bingo. This is the problem with a lot of people. They feel entitled and feel if they make $60 a year they can spend $60k a year.</p>
<p>It is so much better saving money and knowing you have enough money for a rainy day and for the future. You don’t want to have to work until your 80. </p>
<p>It is also so much better to save for things. It feels good to reach your goals and it is good knowing that the trip is paid for and you don’t have to worry about paying about it later.</p>
<p>
</p>
<p>So to enjoy live you have to spend all your money? Would you rather spend all your money in you’re 20’s and 30’s and then have no money for retirement?</p>
<p>I have about $40k saved right now and only 24. Could I spend $25k of that and still live pretty comfortably right now? Probably. But why not spread out your spending? You should enjoy life whether you’re 25 or 65. But to enjoy life when you’re 65 you have to save. There is just no way around that.</p>
<p>
</p>
<p>I never mentioned how much I make, only how much I saved. I had very little going into college and saved a lot during college and the two years since college. I make around $20k a year and have saved around $40k so far (that includes the savings I made during college).</p>
<p>Insomniatic - now imagine putting that 40k down on a house and starting fresh!! :)</p>
<p>
</p>
<p>I don’t think that having a line of credit in lieu of an emergency fund is necessarily a bad idea, as long as you actually have a line of credit. Most banks tend to loan money to those that don’t need it. </p>
<p>I have a line of credit, and have used it in various emergencies. By emergency, I’m referring to when my wife got into a car accident (other guys fault) and we had to buy a car to replace the one that was wrecked. While insurance paid for some of the cost, it didn’t pay for all since we got a newer car than the one that was wrecked. I repaid the line of credit in a couple of months. No big deal.</p>
<p>I wouldn’t say that a person can go out and spend more because you have a line of credit. Bad idea. But, you can invest your money in longer term (i.e., less liquid) investments if you have a line of credit than if you don’t. For example, you can invest more heavily in stocks knowning that you won’t have to sell in a panic to buy a new vehicle after yours is wrecked. Or you can purchase a home and drain most of your savings for the down payment, as long as you can expect to rebuilt the safety net in the future. Or many other reasons.</p>
<p>The big kicker is you need a line of credit. It’s unsecured, and they are much more difficult to get. Credit cards are not a sufficient line of credit.</p>
<p>
</p>
<p>I didn’t say that now did I? I just said you could enjoy things that yes, cost quite a bit of money (not all) rather than pushing most of your excess income into savings when you’re young.</p>
<p>
</p>
<p>Why does it have to be one or the other? You could live semi-lavishly as a young person and then pinch pennies for the next 30 some odd years and save for retirement. </p>
<p>And yes. I’d rather spend more money during my young years than older. When I’m older, I’ll be content to retire somewhere rather quiet. While I’m young, I want to travel and do pricey things. That is MY preference.</p>
<p>Oh and by the way, I already do have a retirement account (401k). I put away half of my income into savings and retirement accounts.</p>