Investing while in school

[cypher1]

LAL's recent "Invested and Lower EF" thread has got me thinking about my larger EF and options with redirecting with while following short term goals. I work full time while part time in school for AS transfer degree (with 4 semesters left). My employer allows tuition reimbursement, so all that money is banked for future tuition (no hurry to leave employer voluntarily or get laid off). My goals are to finish this degree, then look at 4yr BS degree (another 3-4yrs depending on pace).

Right now I have about 12mo of expenses in cash, plus another 8K between tuition and vacation funds. I don't myself putting a chunk of that sum in the stock market, as I may need a portion of it for tuition in the next 1-3 years. Also employer seems relatively stable (knock on wood) for the remaining year, but we all know how things can change quickly.

CDs seem out with the low interest rates. Does it make more sense to keep 6mo EF in cash, and look at stagger the remaining amounts within TIPS or I bonds? I figure those may options may be the next step for more short term saving, but not very knowledgeable on that subject of bonds. If I knew I was serious about going back earlier, I'd have setup an adult 529 savings plan.

Or to summarize: Where should I look at putting more cash if I need for short term goals of 3-5 years instead of tying all into the market? EF is covered, and mid to long term goals as well for current contribution rates.

[Jluke]

Not quite in-line with what you asked but when I felt like I had too much cash I solved that problem by maxing both a Roth and 401k.

you didn’t indicate if you are maxing these out.

[disneysteve]

Or to summarize: Where should I look at putting more cash if I need for short term goals of 3-5 years instead of tying all into the market?

Unfortunately, there are no good options. Money that you need in 3-5 years shouldn't be in the market. It should be safe and secure, which means earning very little interest. But that's okay. That isn't "investing" money so your aim shouldn't be to make a bunch with it but rather to keep it safe so that it's ready when you need it.

[cypher1]

Not quite in-line with what you asked but when I felt like I had too much cash I solved that problem by maxing both a Roth and 401k.

you didn’t indicate if you are maxing these out.

Roth is already maxed. I think to hit 401K max is around 22%, while I'm currently doing 18% with employer match removed for rest of year. I hold off on max while I'm still in school.

[cypher1]

Unfortunately, there are no good options. Money that you need in 3-5 years shouldn't be in the market. It should be safe and secure, which means earning very little interest. But that's okay. That isn't "investing" money so your aim shouldn't be to make a bunch with it but rather to keep it safe so that it's ready when you need it.

That's what I figured for such a shorter window of most likely using. But wanted to make sure I wasn't missing anything.

[LivingAlmostLarge]

That's what I figured for such a shorter window of most likely using. But wanted to make sure I wasn't missing anything.

I don't think it is a bad idea to invest say most of your money. If you aren't set on buying in 3 years then you might as well. Then perhaps it's worth the risk.

[cypher1]

I don't think it is a bad idea to invest say most of your money. If you aren't set on buying in 3 years then you might as well. Then perhaps it's worth the risk.

Normally I'd go that route of putting more in the market. Or at least lowering my EF back to 6 months balance. But to re-iterate what DS brought up: any money planning to be used within 3-5yrs really shouldn't be tied up. So ultimately I think most of the extra cash accrued will be saved towards BS degree in the near future. It's not a horrible problem to have,with trying to be more efficient with cash on hand.