No. of Recommendations: 4

I'm a bit over 9 months right now, I think. I'm pretty close to my target.

I just moved to a more expensive location, bought a house and dumped a bunch of my excess cash into it. At one point I think I only had about 6 months, which was making me nervous - then some of my fixed income investments got called and that fixed that. Since experiencing a bout of unemployment in 2008, I've tended to keep 12 months or more in cash on hand.

My 12+ months would have lasted a good deal longer, assuming reduced expenses from staying at home and unemployment insurance. When I was unemployed, my unemployment covered most of my expenses - all but the outrageous health insurance premiums I had to pay, which were substantial.

Which brings me to another point. People assume that when unemployed, expenses will go down. In my experience, most did by quite a bit. In fact I think they went down by about $600 to $800/month when I was unemployed; but that was completely offset by extra insurance and medical expenses I was not paying when I was employed. My employer folded, so there was no COBRA so my insurance payments went way up and what it covered was essentially nothing as it was a High Deductible Healthcare Plan and I never met the deductible.

So in general, I assume that what I'm spending today, I'll probably spend that much or more if I lose my job. Also while unemployment insurance payments are likely, they're not a given. And most importantly those can run out surprisingly fast - especially at times when you lose your job as a result of general economic distress when it's harder than normal to find a replacement.

So as they say, Better safe than sorry...

- Joel
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