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"3-6 months of expenses." That's the advice. It's vague on purpose -- because the right number depends on your situation.
Three months is the floor. Non-negotiable. But for most sales reps, three months is just the starting point. From there, the number goes up based on your life.
Here's how I think about it.
If you want to skip straight to your number, you can grab 20 minutes on my calendar and we'll work through your specific situation together.
Do you have dependents?
Kids add stakes. A single rep with no dependents losing their job is a problem. A rep with two kids losing their job is a different category of problem. More than two dependents and the exposure goes up again. The more people relying on your income, the more runway you need before you're in a real bind.
Do you own or rent -- and are you the only income?
Renters have flexibility homeowners don't. You can downsize a lease faster than a mortgage. If you own, build in more. And if you're a single-income household -- your income is the only thing standing between your family and zero -- that's another layer of exposure. Dual-income households have a natural cushion built in. Single-income households don't.
Base plus commission, or fully commission?
A base is a floor. If you have one, you have something coming in even in a bad month. If you're fully commission -- 100% variable -- you have no floor. Your emergency fund has to be one. That changes the math significantly.
How volatile is your industry?
Some industries run hot for years, then go through brutal consolidation. If you're in a space known for mass RIFs and hiring freezes that stretch 12-18 months, your runway needs to reflect that. A rep in a stable sector with steady hiring can carry less than one in a space where the floor can drop out in a quarter.
Run through those four and your number becomes a lot more specific than "3-6 months." Most sales reps I work with land somewhere between 4 and 9 months once we account for their actual situation.
The goal isn't to have the most money sitting in savings. It's to know your number -- so everything above it can move somewhere it's actually working.
Reply to this email with "number" and I'll walk you through the calculation for your situation.
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