If you were to lose your job today, how long could you afford to live at your current standard of living? If it’s 3 months, then you are ‘3 months wealthy’ Your income becomes largely irrelevant.
It’s easy to live to your income, most people do. But despite the economy doing well, redundancies are just as prevalent as before.
So, it pays to work out the minimum you can live on each month, paying all bills, with no luxuries. Let’s assume that it will take three months to get a similar paying job to the one you have right now. Start putting away a little each payday to build up to three months of all living costs. Then to be on the safe side, add another month.
Not only is this an extremely sensible thing to do, but you will sleep better knowing it is there if a disaster on the job front does happen – you are covered!
(Credit – Asteron Life – Life Chart)