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Emergency fund question
Posted by SwayzeBalla on 9/3/18 at 8:26 am30
What is the best type of account to put my personal emergency fund into? Right now it is sitting in a traditional savings account.
re: Emergency fund questionPosted by OleWarSkuleAlum on 9/3/18 at 8:30 am to SwayzeBalla
A true emergency fund needs to be liquid. I keep Atleast 6 months in a traditional savings account and the rest in a normal brokerage account in an extremely tax efficient mutual fund.
re: Emergency fund questionPosted by SwayzeBalla on 9/3/18 at 8:38 am to OleWarSkuleAlum
I was interested to see what people had to say about mutual funds. Didn’t know how much sense it would make to keep 6 months in a mutual fund... I’m extremely new to this
re: Emergency fund questionPosted by weagle99 on 9/3/18 at 8:53 am to SwayzeBalla
You need it where you can get to it quickly and where it won’t lose value rapidly.
I see no problem with a traditional saving account.
Just think about inflation a bit. Silent killer.
I see no problem with a traditional saving account.
Just think about inflation a bit. Silent killer.
re: Emergency fund questionPosted by SurfOrYak on 9/3/18 at 9:13 am to SwayzeBalla
Many will keep emergency funds in money market funds, which technically are mutual funds. But you have check writing access to those accounts, so very liquid. And are not invested in stock market, so not affected by those fluctuations.
There might be situations (e.g. low-mileage autos, strong employment outlook, adequate health insurance, etc) where you might feel comfortable in a bond/equity balanced fund as a place for emergency funds. But your emergency fund should really be considered separate from your wealth growth accounts, so more conservative and liquid savings accounts and money markets are more appropriate.
There might be situations (e.g. low-mileage autos, strong employment outlook, adequate health insurance, etc) where you might feel comfortable in a bond/equity balanced fund as a place for emergency funds. But your emergency fund should really be considered separate from your wealth growth accounts, so more conservative and liquid savings accounts and money markets are more appropriate.
re: Emergency fund questionPosted by SwayzeBalla on 9/3/18 at 9:42 am to SurfOrYak
I've received things in the mail from Capital One about their 360 Money Market. Looks like I can link my checking account to that which would make it pretty accessible in the event of an emergency.
The higher interest rate with the Money Market is what I had in mind. Just trying to figure out how to get more for my money. Obviously my savings account isn't yielding 1.85-2% interest like some of the Money Market accounts I've seen, so I'll probably look further into that.
The higher interest rate with the Money Market is what I had in mind. Just trying to figure out how to get more for my money. Obviously my savings account isn't yielding 1.85-2% interest like some of the Money Market accounts I've seen, so I'll probably look further into that.
re: Emergency fund questionPosted by Jag_Warrior on 9/3/18 at 10:15 am to SwayzeBalla
Yep, Cap One, Amex, Discover, Ally or Marcus (Goldman) are all good options, among many others. As long as you can roughly match inflation and you're in an FDIC insured account, you'll be fine. I think of the emergency fund account(s) more like insurance. I'm not really going to make money. I'm just trying not to lose too much by keeping it in place.
I know Ally and Capital One have decent apps - I think Discover does too. Amex I'm not sure about. I don't think that Goldman has an app for the Marcus accounts yet though. That might be another consideration.
I know Ally and Capital One have decent apps - I think Discover does too. Amex I'm not sure about. I don't think that Goldman has an app for the Marcus accounts yet though. That might be another consideration.
re: Emergency fund questionPosted by TigerintheNO on 9/3/18 at 10:32 am to Jag_Warrior
Discover online saving is paying 1.75%
re: Emergency fund questionPosted by SwayzeBalla on 9/3/18 at 10:43 am to Jag_Warrior
I’m looking to dump my savings account into a money market I think. What’s the general idea for contributing to make up with inflation?
I admit I know next to nothing about these things.
re: Emergency fund questionPosted by bovine1 on 9/3/18 at 11:48 am to SwayzeBalla
VMMXX. You can link it to your checking account and move money back and forth at will. It is currently yielding 2.08%.
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re: Emergency fund questionPosted by Ragnar Danneskjold on 9/3/18 at 1:12 pm to bovine1
Cash, in various denominations, hidden in places I can get to quickly.
re: Emergency fund questionPosted by Teddy Ruxpin on 9/3/18 at 2:08 pm to Ragnar Danneskjold
quote:
Cash, in various denominations, hidden in places I can get to quickly.
I think you're talking about an entirely different type of "emergency."
re: Emergency fund questionPosted by yellowfin on 9/3/18 at 2:10 pm to SwayzeBalla
I don’t believe in keeping an emergency fund.
re: Emergency fund questionPosted by LSUsuperfresh on 9/3/18 at 3:15 pm to OleWarSkuleAlum
quote:
I keep Atleast 6 months in a traditional savings accou
What's the rule of thumb here? 6 months' worth of expenses? 6 months' after-tax income? 6 months' disposable income?
re: Emergency fund questionPosted by Ric Flair on 9/3/18 at 3:40 pm to SwayzeBalla
Best would be the best yielding money market type account that you could write an $8000 check out of to cover a new Air conditioner unit.
re: Emergency fund questionPosted by CajunTiger92 on 9/3/18 at 4:49 pm to jimbeam
For years I kept an emergency fund but when interest rates went to zero, I put the money in the market and haven’t looked back. Maybe I’ve managed around it using credit cards (which are all paid off every month) and closely watching balances.
Parking tens of thousands of dollars carries a large opportunity cost in a bull market. That said, I understand why people do it and know some people like the peace of mind (which is an important factor).
Parking tens of thousands of dollars carries a large opportunity cost in a bull market. That said, I understand why people do it and know some people like the peace of mind (which is an important factor).
re: Emergency fund questionPosted by Teddy Ruxpin on 9/3/18 at 5:33 pm to CajunTiger92
I'd say if you have saved enough money that a 50% loss in the market would still cover the 6 month expenses or whatnot, then that's fine if you aren't a fan of cash drag. That's pretty much what I did.
If not, then you probably shouldn't put in the market, bull or not, because a bull is only a bull until it isn't.
You can even have no emergency fund and run it up on 0% cards if you know what you are doing.
All comes down to financial acumen, comfort, responsibility, etc.
If not, then you probably shouldn't put in the market, bull or not, because a bull is only a bull until it isn't.
You can even have no emergency fund and run it up on 0% cards if you know what you are doing.
All comes down to financial acumen, comfort, responsibility, etc.
This post was edited on 9/3 at 5:38 pm
re: Emergency fund questionPosted by bushwacker on 9/3/18 at 5:46 pm to yellowfin
quote:
don’t believe in keeping an emergency fund.
This. I can get a heloc pretty quickly if needed.
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