I got retrenched recently, have 10k savings and was dollar cost averaging investing a few hundred monthly. Should I stop now that I'm retrenched? Or tap into my savings and continue?

I will stop investing.

finding a job is my priority and i shouldn't spend extra money till i get a new job

Hi anon,

I'm sorry to hear about your retrenchment. Hope you find a new job soon.

In the meantime, that $10K savings would be used to tide you over this period. If you minimize expenses, $10K should last you for quite a while, but this certainly depends on your lifestyle and profile (e.g. are you single? staying with parents for now? Or married with children?). At any rate, your emergency funds are meant for just that: an emergency, and although it feels like there is an opportunity cost not to invest the monies, it is one that we have to accept. If you had to force liquidate your investments at a loss to pay for your daily expenses, that is even worse.

Unless you are sitting on a tremendous pile of cash, your investments should always come out of your war chest and active income. These sources should be kept separate and treated separately from your savings/emergency fund.

Hi anon, I'm sorry to hear about your retrenchment. I hope you find something you like real soon.

Firstly, is the S$10k savings able to tide you through at least x months of daily expenses + investments? The general consensus for x is 6 as it's the average period one takes to find a job. If you think 6 months is too short a period, you can use a longer time frame. It's better to err on the side of caution here.

So, let's say you use a conservative 9 months figure. $10k/9 = S$1.1k. S$1100-S$400 (max amount you mentioned for investing) = S$700. Is $700 enough for your daily expenses monthly? If so, you can consider continuing your investments. If it's not enough, it might be better to pause your investments for now.

Having said that, even if you have enough to invest, the most conservative approach might be to stop your investments now and wait out till you find a job again to re-start your investments, as the rest have already mentioned. I think it all depends on your comfort level (whether you want to still invest if you can afford to or you would rather pause your investments for now no matter what).

Hope what I mentioned makes sense. Do ping me again if you need any clarification. All the best!

Your 10k savings had now become your emergency funds to tide you through your essential + non-discretionary expenses until you are able to find another job.

Best not to invest out of the 10k savings, investment should be made out of your active monthly income.