Author Topic: Where to store emergency fund  (Read 1323 times)

StashingAway

  • Pencil Stache
  • ****
  • Posts: 546
Where to store emergency fund
« on: March 06, 2019, 03:29:39 PM »
I'm sure this topic has been covered, but I could not find relevant results easilty. I'm also sure it has many different answers, but I'm a bit curious as to what you folks like to do.

We are in a position where we want a larger emergency fund and have more income. Before I was living like college; just 5-10K in a savings account. But if we want 3-6 months expenses we're looking a larger sum of money, and I feel like a savings account isn't a great location for something like $20-30K to just sit for emergencies.

Where do y'all put your emergency fund? High yield savings? Money Market? Bonds?

Or do you just dump it in the market and get a HELOC like MMM?

seemsright

  • Bristles
  • ***
  • Posts: 363
Re: Where to store emergency fund
« Reply #1 on: March 06, 2019, 03:46:30 PM »
Your logic hits my funny bone

Your income is higher and you need a larger emergency fund...huh?

I am not saying not to have any money set aside for emergencies. But 20-30k is a lot to set aside for emergencies.  Keep 5-8K in a easy to get to account with higher interest and invest the rest...if shit really hits the fan you can sell index funds.

But for the small stuff you should be able to cash flow it...esp with you saying your income is higher.

COEE

  • Pencil Stache
  • ****
  • Posts: 611
Re: Where to store emergency fund
« Reply #2 on: March 06, 2019, 07:53:42 PM »
We keep the following:
1mo-2mo in checking.
2mo in high yield money market account with check writing ability.
3mo in 13-week treasuries (rolling 3 mo ladder)
6mo in I-bonds (indexed to inflation)

This provides us a lot of flexibility.  Half is being indexed with inflation - so we don't have concerns about losing buying power.  9 mo is available at nearly a moment's notice and I can sell the other 3 mo on the open market if I really need to.

We sleep well at night.


GizmoTX

  • Handlebar Stache
  • *****
  • Posts: 1450
Re: Where to store emergency fund
« Reply #3 on: March 06, 2019, 08:34:56 PM »
Online savings account earning at least 2%, linked to your checking account.

Saving in Austin

  • Stubble
  • **
  • Posts: 184
Re: Where to store emergency fund
« Reply #4 on: March 06, 2019, 08:56:53 PM »
Most of my emergency money is with Vanguard Money Market Fund VMMXX at 2.46%.

It links to my checking account and takes a couple of days to transfer.

StashingAway

  • Pencil Stache
  • ****
  • Posts: 546
Re: Where to store emergency fund
« Reply #5 on: March 08, 2019, 01:43:28 PM »
Your logic hits my funny bone

Your income is higher and you need a larger emergency fund...huh?

Lol, there's a lot of backstory but it certainly came out as an anti mustachian sentiment. The two are related to significant lifestyle events, but not directly correlated.

We just bought a house, so the stakes are higher if we fail to make ends meet should we both lose our jobs.

Before we were traveling the country for a couple of years in a campervan like vegabonds. Quite an adventure, but definitely not living in a way that is financially secure or productive toward financial independence. Nothing put in tax sheltered accounts, nothing compounding, no growing assets, etc. previously. Cheap lifestyle, but risky for the long term. We're now re-setting and going to be much more proactive for this chapter in our lives... and I just don't know what do do larger chunks of $ aside from a savings account and index funds. I figured there's a good in-between that doesn't fluctuate with the market as much.

Most of my emergency money is with Vanguard Money Market Fund VMMXX at 2.46%.

It links to my checking account and takes a couple of days to transfer.

Excellent! This seems like what I was looking for.
We keep the following:
1mo-2mo in checking.
2mo in high yield money market account with check writing ability.
3mo in 13-week treasuries (rolling 3 mo ladder)
6mo in I-bonds (indexed to inflation)

This provides us a lot of flexibility.  Half is being indexed with inflation - so we don't have concerns about losing buying power.  9 mo is available at nearly a moment's notice and I can sell the other 3 mo on the open market if I really need to.

We sleep well at night.



Intimidating at first, but very straightforward. Thanks!

better late

  • Bristles
  • ***
  • Posts: 473
Re: Where to store emergency fund
« Reply #6 on: March 08, 2019, 04:17:42 PM »
Most of my emergency money is with Vanguard Money Market Fund VMMXX at 2.46%.

It links to my checking account and takes a couple of days to transfer.

Why didnít I think of that?!  Thatís a great solution.  Thank you!

Holyoak

  • Bristles
  • ***
  • Posts: 447
  • Age: 54
Re: Where to store emergency fund
« Reply #7 on: March 08, 2019, 04:39:30 PM »
Most of my emergency money is with Vanguard Money Market Fund VMMXX at 2.46%.

It links to my checking account and takes a couple of days to transfer.

Why didnít I think of that?!  Thatís a great solution.  Thank you!

I do exactly the same, except it's VUSUX...  Also spread the love to my GS Marcus savings account paying 2.25%.  Both are easy to transfer between, or to one of my checking accounts.  Just checked, and Vanguard's long-term treasury fund Admiral shares (VUSUX), is paying 2.92-2.97%.  Rock solid safe backed by the U.S. Govt, but has a high minimum investment - $50,000.  No worries here.