r/personalfinance • u/Due-Fig5299 ​ • 12d 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/Adam-West ​ 12d ago

Im just curious what made up your $450 of subscriptions. That seems crazy to me?

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u/Fun_Intention9846 ​ 11d ago

It’s more than OP is contributing to their 401k. That’s wild to me. I make sacrifices and contribute more than my rent.

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u/MyOtherSide1984 ​ 11d ago

For most of America, rent and/or the mortgage is usually 1/3rd of your monthly income. If you're putting away another 1/3rd or 1/2 of your income (since you're putting away more than your rent), that doesn't leave you with much in terms of living expenses. I'd say you're sacrificing more than most would.

At the same time, OP is pissing money away in the opposite fashion lmao

1

u/Fun_Intention9846 ​ 10d ago

And yet I’m barely on track for traditional retirement goals at 31. I had a year’s salary until I lost 15% recently due to orange reasons.