But that was why I brought this up. Until ACA goes away, the cost of insurance while unemployed needn’t be catastrophic. If the income disappears, so does most of the cost of coverage.
“Costly puzzle” – good term for it. We make this needlessly difficult and expensive for ourselves in this country.
If I could go back in time and change one thing - it would be to prioritize saving. 3-6 months emergency fund is a good start - but a year is even better. Savings = freedom, savings = less worry and stress. I don’t think it can be overstated.
Our S has a WAY bigger emergency fund than we ever did at his age. He’s a very good saver and is making a nice salary. He is able to deal with the quirky federal shutdowns when Congress won’t pass a budget very calmly–more so than his over-extended co-workers.
Perhaps the financial planner types who say “3-6 month emergency fund” may be just trying to market what is superficially an attainable goal to most people. People like the son of @HImom (see #42), who apparently naturally spend much less than their income, will save 3 months, 6 months, 9 months, 1 year, etc. easily and quickly, without really needing to think about it (and can probably get to retirement level savings quite a bit earlier than age 65, in the unlikely event that the individual medical insurance mess is solved by then). On the other hand, there may be a large number of other people for whom spending comes more naturally than saving, so a superficially attainable goal may be more marketable than a larger goal based on likely actual emergency fund needs.
S supplemented his income by having a lucrative hobby as well as his full time job, which helped him live well below his income.
3-6 months emergency fund is a guide, mileage will vary based on your own circumstances.
It’s probably a good starting point - as anything greater would be too overwhelming. I have stressed this so much to my sons.