As of: March 9, 2024, 6:00 p.m
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You should have money in reserve for unforeseen emergencies.
Up to six months' salary in reserve is recommended.
If you submit your notice of termination or are even terminated, you have to take care of a few things.
Do you already have a new job?
If so, will anyone like this one?
How good is the salary?
How far the distance?
In a situation like this, you don't want to have to worry about money.
But if you haven't taken precautions in the event of an unforeseen job loss, you'll have to worry about these things for better or for worse.
To prevent things from getting that far, you should save in advance and have a certain amount on hand.
Emergency fund: what is it and why do you need it?
The emergency fund is defined by
Weltsparen.de
as a financial reserve that can be accessed in an emergency.
It is used when you need money quickly.
For example, because you have lost your job, but also if, for example, the washing machine breaks down, you are required to pay back taxes or other costs arise that you had not factored into your normal monthly budget.
To create an emergency fund, you should put away some of your salary every month.
© Anastasiia Yanishevska/Imago
Because it is intended for emergencies, the emergency fund should be available quickly.
A sum in a savings account that is tied to a term is therefore not suitable as an emergency reserve.
It is better to save the reserve in a current account that you can access at any time.
In most online banking systems you can transfer money back from a current account to the reference account, for example the checking account, at any time with just a few clicks.
You should also have up to 500 euros in cash at home.
Putting money aside: How big should your emergency fund be in case of an emergency?
Experts' advice varies when it comes to the size of the emergency fund.
Weltsparen.de
recommends having three to six monthly salaries on hand.
consumer centre.de
speaks of two to three monthly salaries.
This is especially true for low-income earners, who are often unable to put aside enough money to cover six months' salary or only over a very long period of time.
According to
Finanzfluss.de
, it makes more sense not to think in terms of monthly salaries, but rather in terms of monthly expenses.
You can get an overview of how much money you actually spend each month and then save three to six times that amount.
This way you don't put too much money away that you could have otherwise invested, and in an emergency you have exactly the amount you need to cover your expenses.
In general, the size of the emergency fund will differ for each person.
Individual obligations such as rental costs, ongoing financing, children and other fixed costs must be taken into account.
A single mother or a family needs a larger emergency fund than a single person who still lives with their parents.
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Save up an emergency fund: This is how even low-income earners can create a financial cushion
Creating an emergency fund means nothing other than saving.
However, this is not that easy for everyone.
Low-income earners in particular often have financial worries due to the constantly rising cost of living.
According to
consumer center.de,
people with less income can also build up a cushion by following a savings plan.
First you should get an overview of inclusions and exceptions.
This can be done, for example, with a budget book in which you can compare plus and minus and see the difference better.
You should then set your budget at the beginning of the month and ideally not live beyond it so that you can put a certain amount aside.
You should save early for upcoming expenses, such as vehicle tax, which is due.
If you don't have enough money per month, you can turn to advice centers or reduce expenses, for example by switching to cheaper contracts.
Loan offers are not recommended to avoid additional debt.
Drawing on your nest egg: How long Germans can last on average
If you are actually faced with the situation of having an unforeseen loss of income, you have to bridge it with your savings.
According to the
Federal Financial Supervisory Authority (Bafin),
not all Germans can do this.
In a study on
Bafin.de
, only around half of all respondents said they would be able to continue to pay their living expenses for at least six months if their main source of income were lost.
A quarter of those surveyed would not even make it for three months.
In addition, 15 percent said they had to borrow money for unforeseen expenses - such as car repairs - because their emergency fund was not big enough.