I wanted to get some thoughts from the group on emergency fund structure/scheme. I had set things up as a 6 month minimum living expenses fund earning 1% in a high yield online savings account. We are currently spending about 25% of net income with the rest maxing out tax advantaged retirement accounts and biting away at huge student loans.
It feels wasteful to have 6 months of expenses earning below inflation when even refinanced student loans are closer to 2.9%. Does anyone carry muni bonds or something similarly low risk in a taxable account as part of a de-facto emergency fund? How about higher risk/return investments like market ETFs? If so how much cash reserve vs less liquid backup do you keep? Thanks!
It feels wasteful to have 6 months of expenses earning below inflation when even refinanced student loans are closer to 2.9%. Does anyone carry muni bonds or something similarly low risk in a taxable account as part of a de-facto emergency fund? How about higher risk/return investments like market ETFs? If so how much cash reserve vs less liquid backup do you keep? Thanks!
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