I am sure you might have seen those entertaining commercials showing those cool looking beds that customize to the individual’s bodies to get the best sleep at night?
Well I have another sleep number and it’s the number of months you need for your cash reserves in case “things don’t go according to plan.”
Suze Orman, on her television show quite often suggests that you should have an 8 month back up plan. And I can’t really argue with this. But if I may…I would like to perhaps add a thought to this.
My question is…how many months of back up cash will let you sleep a restful night?
If it is 8 months…great! But if it is not…then maybe you might need 10 or 12 months of back up money in order not to wake up in a cold sweat. Maybe your number is 18 (18 months) or maybe it is “24” months?
And if you are married…then that sleep number is not just about you! That number needs to keep both of you sleeping restful at night. It might be a question to ask your significant other. No sense in guessing their number, just ask. For my wife, she feels more comfortable at 24 months. Yes, she wants 2 years of back up to feel “secure”. And that is OK. It is her number. Now…I don’t have this “sleep number” just yet…In fact, I need to really figure out how I am going to reach this number. But there we go. At least I know what my “sleep number” is. It is 24. It might take me a while to reach this number but at least I know what my family’s comfort zone is and what I need to strive for in order to sleep easy at night.
I bring this up because I am sure a lot of you hear this topic quite a bit. Again I agree with Suze that you should at least have 8 months of cash reserves at the very minimum. You just never know if your job will be there the next day or if something else happens in life where that back up cash will be needed. So it’s a good idea.
But if you are like me your sleep number might be slightly different. Maybe you need a larger number to feel secure at night. Whatever the number is I think it is important to figure it out and to set this as a goal so you don’t continue to stay up late at night stressing out.
So what is your sleep number? Love to hear your comments!
Well I have another sleep number and it’s the number of months you need for your cash reserves in case “things don’t go according to plan.”
Suze Orman, on her television show quite often suggests that you should have an 8 month back up plan. And I can’t really argue with this. But if I may…I would like to perhaps add a thought to this.
My question is…how many months of back up cash will let you sleep a restful night?
If it is 8 months…great! But if it is not…then maybe you might need 10 or 12 months of back up money in order not to wake up in a cold sweat. Maybe your number is 18 (18 months) or maybe it is “24” months?
And if you are married…then that sleep number is not just about you! That number needs to keep both of you sleeping restful at night. It might be a question to ask your significant other. No sense in guessing their number, just ask. For my wife, she feels more comfortable at 24 months. Yes, she wants 2 years of back up to feel “secure”. And that is OK. It is her number. Now…I don’t have this “sleep number” just yet…In fact, I need to really figure out how I am going to reach this number. But there we go. At least I know what my “sleep number” is. It is 24. It might take me a while to reach this number but at least I know what my family’s comfort zone is and what I need to strive for in order to sleep easy at night.
I bring this up because I am sure a lot of you hear this topic quite a bit. Again I agree with Suze that you should at least have 8 months of cash reserves at the very minimum. You just never know if your job will be there the next day or if something else happens in life where that back up cash will be needed. So it’s a good idea.
But if you are like me your sleep number might be slightly different. Maybe you need a larger number to feel secure at night. Whatever the number is I think it is important to figure it out and to set this as a goal so you don’t continue to stay up late at night stressing out.
So what is your sleep number? Love to hear your comments!
well number may be important, but i suppose a person will ruin his sleep just to make that number possible : )
ReplyDeleteInteresting point. I would suggest taking on this goal in small steps. Author David Bach has some great savings tips. His book Automatic Millionaire or Start Late, Finish Rich are both wondeful books to read. If we cut back perhaps eating out a few times a week for example, then use those extra dollars could go to the back up account.
ReplyDeleteHi Fawwad,
ReplyDeleteI also did want to add that you are right, at least in my case. I might stay up more nights working on my personal goal. But if that gives my wife a piece of mind and she sleeps better at night...then I am OK with this. I would rather work on my personal goal if it means a little less sleep in the short run.
Maybe you are comfortable with only 2-3 monthts of back up money. And that is fine. I don't think there is necessarily a right or wrong here. Again, I bring this topic up because many of my clients seem to be going through the same experiences. One of which is "if" they lose their job and they don't have any back up money...then they start using the credit cards to pay the bills but this can only last for so long. And then if things do not bounce back so quickly their credit is hit pretty severly. And so I would still strongly urge to have at least a few months of emergency funds. I know its tough to save money, especially during a down economy. But don't give up! We can do this.
Interesting concept.
ReplyDeleteFor me personally it would be 10 months!
I did discuss this with my dad and he thinks he would go for over 20 months because, unlike me,he has a family to support. So I think it all just boils down to responsibility and the number of people dependent on you.
As you put it, as long as I sleep well!
Hajra
http://hajrak.blogspot.com
Also a good book to read to help get your finances back on track is "Start Late, Finish Rich" by David Bach. David Bach has a lot of excellent books on organizing your finances and getting your life back on track.
ReplyDelete