Author Topic: Where to put my EF's EF? :)  (Read 1062 times)

LNE2032

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Where to put my EF's EF? :)
« on: June 25, 2018, 11:58:56 AM »
Hi!

A little bit of a different "where to put my emergency fund question".

I'm getting laid off at the end of September and have about $57K coming in severance/retention. I'm trying to figure out what to do with it.

I have a host of side gigs in addition to my 9-5 that are all "extra" money, plus I'll be picking up some freelance work...so my regular paycheck will be replaced upon separation. All living/day-to-day expenses will be covered + retirement savings to meet $18,500 (but could contribute more, if I can, based on business earnings).

My 9-5 salary is/was $108K. But my side income goes away since it becomes my regular income -- boo. It will take some time to scale but hoping to hit my old salary + side gig total $$ over the next few years.

My side income was used as play money - extra investing, a vacation here or there, necessary home repairs, etc. It was obviously also a nice safety net just in just we case we spent a bit extra in one month, so whatever I do with it, I want it to be accessible just in case we need it. We'll obviously work on tightening the budget, as well - I'll admit we've been loose with the budget at times since we had such a cushion.

Our current savings situation:

  • We have our "actual" emergency fund earning a bank bonus as we speak in a Citi account right now - $25K. After this is done, will move to an Ally-type bank
  • 401Ks maxed (I upped my contribution to hit my max before I leave)
  • Roths ineligible due to income
  • HSA not at max so could think about increasing there
  • No debt aside from mortgage

Where should I put my severance/retention? Because we have our regular emergency fund I'm willing to up the risk factor a little.





Car Jack

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Re: Where to put my EF's EF? :)
« Reply #1 on: June 25, 2018, 12:14:17 PM »
I think I'd consider an "Ally-like" place for money you plan to use in the next year.  Currently, CIT Bank is 1.89%, if I remember correctly.

For money over that amount, look for the best rate on a CD.  If you can be without it for 2 years, do that.  Longer with a reasonable early withdrawal penalty, do that.  Rates change constantly, so look around but absolutely make sure you know the penalty.  You don't want to have to get the money out at a year and 8 months to find that all interest since inception gets charged as a penalty.

LNE2032

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Re: Where to put my EF's EF? :)
« Reply #2 on: June 25, 2018, 01:29:48 PM »
Thanks Car Jack - I probably wouldn't want to lock it up in a CD. I know I could pull it out, with penalty, but prefer to keep it more liquid since I'm 95% sure we won't need it...but the 5% uncertainly weighs on me.