What is your rich life?
Champagne moments | Having one year of emergency fund cash
Think about: Having one year of emergency fund cash
This, you could make it six months or a year, whatever. Where you feel comfortable with.
The thought behind this is that you have the freedom to quite your job or when they 'let you go', take a break when something happens.
Or smaller things: when your washing machine breaks down, a bill comes that you didn't expect.
I calculated it the following way for me:
Monthly expenses (minimal set):
| Name | Price |
|---|---|
| House | 580 |
| Internet | 48 |
| Mobile phone | 28 |
| Online banking | 5 |
| Gas, electricity | 80 |
| Insurance | 164 |
| Water | 9 |
| 914 |
| Name | Price |
|---|---|
| Groceries | 240 |
| Clothing and shopping | 100 |
| Eating out, family, lunches | 200 |
| So we have a round number | 60 |
| 600 |
Yearly taxes, bills: 1.000,-
Monthly expenses: 914 * 12 (months a year) = 10.968,-
Living: 600 * 12 (months a year) = 7.200,-
So having on a account somewhere have 19.168,- to have the freedom that I can cover my monthly expenses for a year without incoming money.
Think about: What is your rich life
Things in you live you don't want to think about when spending money on them.
I never question spending money on clothing, eating out, health, or presents for my friends and family. Now, each of those is very meaningful to me.
Sources I used for these thoughts:
Unshakeable - Anthony Robbins (2017)
Tim Ferris interview with Ramit Sethi (https://tim.blog/2021/07/26/ramit-sethi-2/)
Mr. Money Mustach Blog