What’s your comfort threshold for your savings account when digital nomading as a freelancer?vWhat number do you begin to really stress when it’s below?
That’s a great question. For me personally, it’s when I have less than 4 months living expenses in my savings. That’s just a safe threshold I like to stick to. That way, I know I have a little bit of breathing room should work slow down.
good god, some of these back up numbers are insane! ranging from 3 months - to 1 year, to $70k!
I dont freelance, but i do have a steady predictable income coming in every month…so I guess my number is, as long as that monthly forecast and 2 month buffer remains the same, then im staying abroad.
10k euros
$30k cushion in high yield savings account
Solid. That should get you by for 2 years in a pinch. Very nice.
I measure by number of months I can keep doing whatever I’m doing with zero income. That is, if all of my clients cancelled on the same day and refused to pay me anything they owe.
Six months is what I like to have. Two months makes me uncomfortable.
I do the same.
I’m riding at four months right now.
25/m here with $320k in savings and a six figure contract income from long term clients. It definitly affords me a lot of peace of mind, even if I lost work, it would probably be a while until I really get nervous. Although I do really value saving and keeping a positive cash flow at all times.
I’m curious, is all of that $320k in a savings account or are you including money you have in investment accounts?
I consider both, as all are easy access and I could take it out at any time if I needed to. But I’d reach for my standard savings accounts first.
When I was freelancing, every two weeks id swap from losing sleep because I thought I’d go broke and then losing sleep because I had too much work
I am currently luxuriating in the brief shadow between the files I sent in last night, and the feedback I’ll have to work on tomorrow morning. lol
I can relate. I’m living this right now.
Lol as you should be. It’s either or. So you’d always live this, wouldn’t you?
Yep. Been a freelancer for 3 years and that’s the freelancer way: “feast or famine.” When it’s going well, I’ve made five figures in one month. When it’s not? I’ve sat on the toilet and cried while envisioning panhandling in Central Park.
But I try and keep $20k in a high yield savings account for big emergencies and $10k in another savings account that’s easily accessible
I also have two IRAs I can cash out if shit starts to look REALLY bad. But by that point I’ll just go home.
True. This is because trading your time for money sucks and is difficult.
What’s the solution ?
Charge more
Double entendre, brilliant.
With the way inflation is going, I am stressing right now even after 200k in 1Yr treasury account yielding me 5.7%
That’s a mindset thing friend.
I wouldn’t do it if I was net negative.
I’d say that one should start stressing out as soon as you stop putting money into your savings. I think that being a digital nomad should be a sustainable life, not a holiday.
My savings account goes up not down. Build a business or something that will set you up financially.
But when I was beginning, I had like $20K in savings and I would have probably been worried if it dropped below $10K
I have a comfortable enough social safety net that I’m okay running it a bit lower depending on context (like going over the threshold to visit family for holidays or meet investment goals). Obviously, need to pay that back, but I haven’t really needed it yet either.
If I actually went negative, I have access to other money.
Right now I’m a bit low due to some delayed invoice payments from clients, a recent surgery, and flights and other costs related to the Holidays.
I wouldn’t do like a year, that seems way too much, unless your work is very unstable and you have no social safety net.
3 months is comfortable.
6 months of living with my current expenses
I have regular clients so I am lucky. I would freak out if I had nothing lined up.
I currently have 2 years worth of living in savings because it’s the requirement for my current European visa.
I think it all depends on your own personal circumstances.
I try to keep 6 figures in various ETFs