The Money Mustache Community

Learning, Sharing, and Teaching => Investor Alley => Topic started by: albireo13 on November 11, 2015, 05:12:15 AM

Title: cash reserves ... best accounts/funds to use??
Post by: albireo13 on November 11, 2015, 05:12:15 AM

Hi,
  I have virtually no cash reserves at the moment, which makes me very nervous.  I've been focussing on paying off debt at each paycheck the last 2 years.
Now, I'm thinking to swing the other way to avoid any disasters.
  I could just throw part of each paycheck into my Credit Union savings account but the interest rate is miserable .... < 1%.   Might as well stuff it in a mattress!!
However, it is most liquid.  I can get access to the funds same day, almost instantly.

I would like a better way of managing my cash reserves.  What do people use?  Money Market funds?
Suggestions?

Disclaimer:   I am unsophisticated investor ... meaning ... no experience and clueless.

Title: Re: cash reserves ... best accounts/funds to use??
Post by: Le Poisson on November 11, 2015, 05:16:03 AM

Where are you? In Canada we have a few tools - our family has chosen TFSAs, but I don't know where you are to give suggestions.

Title: Re: cash reserves ... best accounts/funds to use??
Post by: albireo13 on November 11, 2015, 05:33:02 AM

I live in New Hampshire, USA.

Title: Re: cash reserves ... best accounts/funds to use??
Post by: Heckler on November 11, 2015, 08:46:19 AM

Figure out your monthly expenses and continue to pay off your debt.  Stuff 3 months of expenses under your mattress, or in a savings account. Continue to pay off debt till its gone.  Then come back and we'll talk.

You dont want to lose precious savings to short term investments.  Your debt payoff is making you whatever your interest rate is!

Title: Re: cash reserves ... best accounts/funds to use??
Post by: Bellatrix on November 11, 2015, 09:36:25 AM

I use an online savings account. The interest rate is <1%, but it's better than nothing. I want my cash to be easily accessible.