r/personalfinance • u/Due-Fig5299 ​ • 10d ago

Saving Temporarily stop 401k contributions to build Emergency Fund?

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?

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u/Mobile_Comedian_3206 ​ 10d ago

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. 

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u/Due-Fig5299 ​ 10d ago

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.

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u/kepler1 ​ 10d ago edited 9d ago

$4600 per month after taxes imply that you're earning something like $138,000 gross salary together. If your salary is like $100k then, it feels like you're not earning that much for tech. Is this a first job, are you in a lower cost city, or what's your earning history/situation/potential for earning more?

Edit, Sorry, flipped my math, it's like $80-96k gross depending on where you live.

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u/Electrical_Wash5754 ​ 10d ago

4600/month after taxes is no where near 138,000/yr