So after reading
http://www.mrmoneymustache.com/2012/02/22/reader-case-study-getting-blood-from-a-stone/ I began to think about my emergency fund or lack thereof. My wife and I just closed out our credit card debt from a wedding earlier this year and we are now directing our focus towards building an emergency fund. I've got a student loan I'm itching to pay but I think now is the time to build up some liquidity. I'm working a government job so getting let go is highly unlikely but I'm fairly new so it's not impossible.
So as I thought about it, I decided that I needed liquidity rather than an emergency fund exactly. So I took stock of what I had available and thought about what sorts of emergencies might befall me. So here's the gist of our financial situation, maybe some brainstorming could come up with a better plan than mine.
Income:
$5,400 /mo
Wife just got her employment authorization so searching for a job soon
Expenses:
Mortgage/Taxes/Insurance - $2,200 /mo
Other expenses - $1,800 /mo
Savings - $1,400 /mo (bi-monthly move of $700 to ING)
Resources:
Available credit - $6,000
USAA checking - $4,000 (where we pay our bills from)
USAA savings - $1,000
ING savings - $700
457 plan - $4,300 (30% bonds, 70% stock) able to take a loan from it
Unemployment - I'd get $1,800 a month if I became unemployed.
Debts:
$2,100 student loan @ 6.8%
$5,400 student loan @ 2.36%
$1,800 credit card @ 0% for over a year
Talking to the wife, she thinks we could get by on $3K /mo if we absolutely had to. I was thinking of opening a taxable Vanguard account, building up $6,000 in an ETF like VCSH - Corporate Short Term Bonds, then ramping up the 457 until it has $6,000 available for a loan. I'd probably also keep $2K in savings at ING. Then I'd have $20K worth of liquidity, or 6 months worth of expenses available from 3 different sources.
Any thoughts? Am I over complicating this and should I just keep cash in an ING account? Should I put that $6,000 emergency fund in a Roth IRA instead?