Dr. Courtney said:
It depends on what your likely needs for unexpected cash might come from. If you are able to commute to work without owning a car, and you don't have any children, you're in pretty good shape.
If a car is essential to your employment, an accident or breakdown could erase that pretty quickly, depending on the details.
It also depends on what your educational outlook is. That's not much if you are saving for college or hope to emerge from college debt free.
Your real assets are not your money in the bank, it is the money in the bank minus your existing debt. If your existing debt (educational, unpaid bills, credit cards, car loan, etc.) exceeds your savings, you are really in negative territory.
When I was 21, I had about $2k to my name, but I had a new car, no debt, and was about to graduate from college with a degree that opened a lot of doors. That was about 25 years ago. I happened to get a good internship that year, so when it came time to get married at 22, I was able to do that too without going into debt. But to stay debt free, we couldn't afford to bring the car to grad school and it sat in a parking lot in Louisiana while we attended grad school in MA. After a year of living in a cheap apartment, we got better and more affordable on campus housing and figured out a lifestyle and budget that allowed us to afford the car insurance and gas. It was nice not having to walk 2 miles back and forth to school, because I wanted to save on even the bus fare that first year of marriage.
