how much money to be secure?
i started dancing about 6 months ago. i was totally broke and didn't have a dollar to my name. since then i've saved about $4000. it seems pathetic but i was only working 2 nights a week, and blowing money like mad. anyway, i don't wanna ask you all how much money you have in your savings account, but what amount of money should someone have in order to be financially secure? i was thinking between $5000-10,000. anyway i'm trying to get really serious about my money. i've read financial advice saying that you should have enough money saved to cover your living expenses for 4 months or so. what do you guys think?
Re: how much money to be secure?
^^^ I think that the 4 month's worth of regular budget expenditures figure is a pretty good target.
Re: how much money to be secure?
Some people will say 3 months, some say 4, some say 6. It's really a matter of what you're comfortable with and what you think is appropriate for your situation. If you are young and don't have alot of expenses and no kids, 3-4 months is probably ok for you. If you have a family to take care of then it might be more prudent to keep enough for 6 months expenses.
Once you have that basic savings, then it's time to start the saving/investing for profit ;)
Re: how much money to be secure?
Well, with 6 months of cash or money market you are not financially secure. You just have a good cushion in case of a job interruption. It also depends on what your downside is relative to your fixed payment obligations i.e. House / rent,mortage, auto payments and insurance. The fewer fixed payment obligations you have the better you will fair on a downside event.
The big roll of the dice will be your health event.. sickness or an accident.
To be comfortable, I define as having a good job with a building retirement fund so that at retirement age you won't be dining al fresco with the bums. Probably $500,000.
To be independent .. i.e. "take your F...king job and shove it is about $2,000,000. The house is paid off and the interest will allow you to live comfortably in a high upper middle class lifestyle. A few family vacations and college for the kids.
To be wealthy...with discretionary income to say "Let's go watch Scarlett dance in Vancouver this weekend and TampaFLdancer next weekend". You need about $4,000,000. ... and a lot of $100 bills.
Re: how much money to be secure?
Good points. 3-6 months money is what is known as an emergency fund in the trade. You need one in this line of work.
Financial security is a much bigger number, certainly several hundred thousand. As with everything, it all depends on what you are happy with. Still, it sounds like you are making good progress. Keep up the good work.
Re: how much money to be secure?
I really think a dancer should have the full 6 month emergency fund. For one thing, most dancers are living lifestyles they could not afford without stripping. I don't mean lavish lifestyles but simply car payments and rent/mortgage payments that they could not pay if they had to go from stripping to a normal job. The last thing you want to do after you've had some sort of tragedy is move because you can't afford to pay the rent, or sell your car because you can't afford the payment.
A back injury could easily take 6 months to heal and while you could hobble around the office you really can't be swinging around a pole in heels. If your mother dies you may be able to drag yourself to work after a time but you're not going to have it in you to be your vibrant, hot, hustling self for a while. A full emergency fund can mean the difference between giving youself the time to heal or sitting in the dressing room in tears. Smaller emergency funds are okay for people who have jobs that are in high demand and will still pull in a salary if they can at least functionly do their job. You do not want to be coming up with a way to cover the hole in your resume and job hunting in the face of a traumatic event. Sorry to be alarmist, no one ever thinks major emergencies will ever happen to them, and dancers really do need that extra buffer.
Re: how much money to be secure?
I'm aiming for 6 months worth of living expenses (the basics - rent, elec, phone, internet, etc) to be "well off" in the savings department whilst at the same time having only three months worth of living expenses savings is still pretty good (shouldn't be laughed at as it is something at the very least!).