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Didn't the Mayan calendar stop at 2012? Maybe we should re-evaluate our long term goals and max out the credit, eh?
Maybe if you are Mayan?
But I think the calendar ran out a loooonnnggg time ago for most of them.
I do like the part about maxing out credit, especially if you can take down a bunch of the corporate banks by doing so. The enemy of my enemy is my friend.
That's a secret. But, I will say that one should have minimum 2 months gross salary in savings in case that happened.
My husband and I don't use monthly gross salary as our guideline as we live well below our means. The method I used to determine my emergency fund was this:
1. Totaled all fixed and variable monthly expenses.
2. Reviewed expenses and notated which expenses could be cut (i.e. maid and lawn service, dining out, entertainment, etc.)
3. Subtracted cut expenses from total.
4. Added additional expenses to total that we would carry due to job loss, such as COBRA.
5. Added an additional 10% to total to cover unforseen expenses.
6. Multiplied this adjusted total by the number of months to be covered. (General advice is 3-6 months)
I can tell you that we have an equity line of credit worth $100k for an emergency.
then what happens when you have to pay that back? Unless you have a job that is extrememly unlikely to loose IMHO that is not a good idea. We are kind of in the same boat though. we dont have much in liquid savings, but that is because my DH works for the govt. It is very doubtful he would loose his job and if he got really sick or hurt there is coverage for that. We also live way below our "means" so that would just mean that we would be living within our means.
I don't know how long...a long time, years. I've got more than one property that I own, and so I've got those resources on top of what I've got put away (which is almost enough to buy another property at this point). I'm guessing that without selling anything I could get by for maybe 6-8 years without discomfort, as long as I didn't have anything that ate up a huge bunch of cash unexpectedly.
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