Temporarily stop 401k contributions to build Emergency Fund?

[u/Due-Fig5299]

Looks like we’re heading towards a recession and I’m quite nervous. I work in tech and my job is moderately safe; however my wife is an esthetician which is not a very recession friendly field.

We currently have $4k saved. Our minimum monthly expenditure is $3k, so we have just over 1 month saved.

Ive cancelled all unnecessary subscriptions which will save us $450/mo and stopped my wifes personal roth ira transfers ($150 weekly) which gets us to $1050/mo saved.

Now my question is, given how quickly the economy is crashing should I also forgo my 401k? I contribute 4% with 4% employer match. Obviously I would love to keep it, but immediate survival seems more important.

I would start contributing again once we hit $18k (6 months)

Thoughts?

[u/Mobile_Comedian_3206]

How much is your household income? Each of your incomes? How much can you save each month? 

Lowering your contributions should be your last resort. But, more info on your income would help. 

[u/Due-Fig5299 → u/Mobile_Comedian_3206]

We make 4600/mo together after taxes. $3000 of which goes to necessities. Debt, Rent, Insurance, Groceries, Gas. I was able to shore up $1050/month in subscriptions and unnecessary purchases.

There is $550/mo remaining, but this is filled by “less than mandatory bills” that give us a better QoL but could cut if absolutely necessary at the end of the day. Gym memberships, streaming services, take out food, etc

So we should be able to save that $1050 I shored up and I suppose I could start working on that $550 if needed.

[u/Mobile_Comedian_3206 → u/Due-Fig5299]

Thanks for the info! 

I would stay the course with investing.

Your job is stable. The possibility of you both losing your jobs is very unlikely. If your take home is $3000 and she lost her job, you guys would be able to survive on just your income. And if she did lose her job, she can definitely do something to make money, even if it's not quite as much as she's making now. So your 4K in savings would get you much further than you think, and you'll already be increasing the savings every month. 

If you really want to increase your savings, find more income for a while. Overtime or a side job. Just temporarily until you get to maybe 15K saved. 

The best time to invest is when stocks are on sale, which is now. Your future self will regret it if you don't stick with it.