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Werewolfdad t1_jadsdrx wrote

>I want to save 9-12 months of living expenses. What falls under that?

Whatever you want, frankly.

You can have full expenses (aka 100% of your monthly spending) or 'austerity' expenses (aka 100% of your nondiscretionary spending) if you would cut out an luxuries in an emergency.

I wouldn't include savings line items since they are fully discretionary and not an expense.

My emergency fund is about 6 months of full expenses and 12-15 months of austerity expenses, for reference

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D0lphan72 OP t1_jadsx5s wrote

When you say austerity expenses do you mean entertainment type items and non- necessary purchases? Do you lump investment lines into that as well?

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Werewolfdad t1_jadtco1 wrote

> When you say austerity expenses do you mean entertainment type items and non- necessary purchases?

Yeah, if you're on an austerity budget, you're only spending what you must, not what you may want to.

Nondiscretionary items would be things like insurances, mortgage, property taxes, probably half as much in groceries, student loan payments, car payment, etc.

Discretionary items are things like eating out, booze, travel, vacation, kid's activities, lunch at the office, some of your streaming services, etc

> Do you lump investment lines into that as well?

That's savings, which is not an expense

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