where should I put my emergency fund and extra money I save?

[FLA]

I became disabled approx 2 yrs ago and had my income drop by 2/3. I have managed to live very cheaply and have accumulated almost 20k in an emergency fund in cash locked up in my home. I have 2 kids going to college and I settled out of court with my ex to pay 20% of DD's room and board (her tuition would be free due to new state law for state schools but ex does not want her to have to work for 4 yrs in NYS to pay them back for the free tuition, so he is paying that). I also pay $350 a month in child support for DD, DS is not 21 but the cost of both of their child support plus college would've put me well below the poverty line. So we have a plan for DD, DS is going part time to community college starting this summer, I do not have to pay for him until he goes to a 4 yr school. That will be the last thing my ex can take me to court for- Adam's education. Then we are totally done with each other.

If DS continues at this pace, DD will be 21 by the time he graduates and her child support will end. I think I can negotiate that I would pay that amt towards DS's 4 yr degree.

Here's the big BUT. If the ex found out what I have in my emergency fund, he would want me to fork it over and he would not hesitate to take me to court to get it. So I am scared to put it in my savings acct or to invest any of it. I am able to put $500 a month into it. Is it reasonable to keep that amt of cash in a fireproof safe in my home? Should I put it in a safety deposit box? Or should I throw caution to the wind and put it somewhere where it would have some potential for growth? I don't need this big of an EF because I have access to the contributions I made to a Roth that can be taken out no questions asked. I plan to use it to buy my next car but my current car (2012) only has 35k miles on it, so that's not in the near future. I just am not used to sitting on this kind of money. WWYD?

if I come off sounding greedy having such a large amt of money in an EF, know that both kids will graduate with no loans, ex-husband makes an excellent salary and I am contributing proportionally the same percentage of my income towards college as he is.

[disneysteve]

Given the situation, I think you're wise to keep this money off the books.

That said, I don't think it is so wise to keep $20,000 in cash in your home where it is subject to theft, fire, flood, even insects potentially.

There is a modest cost to a safe deposit box but I think that would be a far safer option.

Just thinking "out loud" but you might want to look into doing something like buying savings bonds with the cash and keeping those in the box. That way if some catastrophe happens to the bank, the bonds are replaceable. The cash is not. It's kind of the "belt and suspenders" approach if you're really paranoid. There is an interest penalty if you cash bonds out early but you don't lose principal, only a portion of the accrued interest.

[Jluke]

random ideas:

• Use the cash to fund your expenses as much as possible.
• Pre-pay the child support with cash or "refill" your account if you can't use cash.
• Give some of it to a very trusted family member/friend for them to deposit in their account.
• Is there an account of yours that doesn't factor in to the custody agreement.
  

ETA: similar idea... pay a bill(s) out of your checking account; deposit a similar amount of cash...

[disneysteve]

Just thinking "out loud" but you might want to look into doing something like buying savings bonds with the cash

Thinking about this a little more, perhaps that isn't such a good plan. When you ultimately sell the bonds, it will be a taxable transaction, so the sale will show up on your tax return. If your husband has access to that, it would tip him off.

If you convert this cash to anything, it needs to be something that wouldn't show up on your taxes or official records. I was just trying to think of something that has an added level of safety over the cash, but just cash in a safe deposit box is really about as safe as it gets. And if at all possible, pay for the box with cash so that it doesn't show up on your bank statement or other financial statements. Don't even do it at your own bank. Pick a bank where you have no other relationship.

[Gailete]

Go out of town to a Walmart or big box store where you have no chance of running into someone you know - I know, you do anyhow, but get the fire proof safe like Steve mentioned and pay cahs. The point of being out of town as you don't know who you will run into locally or how well the cashiers might remember you. Your creep sounds like one of the creeps I got rid of. As long as you have complied with the letter of the law with each of your custody payments, it isn't his business at all if you have managed to save some money. That is assuming you answered everything to the court thoroughly. You are not responsible at all for discussing with your ex your finances at this point. My ex kept trying to take me to the cleaners yet he was the one that took the boys and his father on a cruise that first year after the divorce. I sure didn't have money for that! He had been hiding money for awhile from me I'm sure. But defintely get the safe, or better yet two of them, one a bit more conspicuous, with birth certificates, divorces decrees, etc. in it wiht some cash. The other, well hidden, with the bulk of it. A thief would think they got the goods with the first one they find and may not look for another one.

And no I didn't use to be this sneaky!

[Mandy63]

Good for you saving up that much in you EF! I agree with the safety deposit box. I would be nervous about keeping that much cash at home where it could be stolen. The safety deposit box seems like the best bet for keeping it safe and secure but off the record and then maybe in a few years when your kids are done with school you can put it in an account to get some interest.

[corn18]

Most banks do not allow you to put cash into a safety deposit box. Says so right in the agreement you sign when you get a safety deposit box.

[creditcardfree]

Most banks do not allow you to put cash into a safety deposit box. Says so right in the agreement you sign when you get a safety deposit box.

If this is true, a safe in the home is probably the best scenario. Make sure it is fire proof, water proof, and heavy (maybe bolted into something). This sounds to be temporary for just a few years. The risk of theft or fire are probably the biggest issues, but likely not a big risk. Maybe you would feel better losing the money this way than to your ex.

[disneysteve]

If this is true, a safe in the home is probably the best scenario. Make sure it is fire proof, water proof, and heavy (maybe bolted into something).

My brother-in-law had one installed in the basement floor so the safe itself can't be stolen without a jackhammer.

[AnnieG]

Yes, a fireproof, waterproof safe. One that can be bolted down. Ideally on a ground floor so it won't fall in a fire. (They say that they will survive a one story fall, but I wouldn't want to test that.) Be creative about placement. Thieves focus efforts in living rooms & master bedrooms. My son's apartment was broken into and his safe was under the sink, chained to pipes. They never even looked there (cabinet was still closed). His neighbors had their passports and other important documents stolen.

[disneysteve]

Yes, a fireproof, waterproof safe. One that can be bolted down. Ideally on a ground floor so it won't fall in a fire. (They say that they will survive a one story fall, but I wouldn't want to test that.) Be creative about placement. Thieves focus efforts in living rooms & master bedrooms.

Good point, the floor safe I mentioned is under the basement carpet so unless you pull up the carpet, you wouldn't know it was there, and that isn't something a thief would be likely to do.

[FLA]

thank you all for your help

[corn18]

Another good idea is to have one safe in a less well concealed area as bait with nothing in it. Then have the tank somewhere else hidden and bolted. The idea is the first safe gets stolen and they don't continue to search harder for the concealed safe.

[james.hendrickson]

If this is true, a safe in the home is probably the best scenario. Make sure it is fire proof, water proof, and heavy (maybe bolted into something). This sounds to be temporary for just a few years. The risk of theft or fire are probably the biggest issues, but likely not a big risk. Maybe you would feel better losing the money this way than to your ex.

The saving advice blog actually did a great review of this.

To summarize, burglars will check the:

1. back of the closet
2. the toilet
3. cereal boxes
4. the refrigerator and the freezer
5. the medicine cabinet
6. the bed/around the bed

Burglars usually look for valuables in the back of the closet, cash in the toilet, for valuable medicine with street resale value in the medicine cabinet. Thieves will check the bed or around the bed because this is often where people keep firearms.


Link to article

[Gailete]

Any time I traveled with extra cash on hand and no real decent place to squirrel it away on the trip, I would tuck it in a box of sanitary napkins as I figure most guy burglers would have a psychological dread of touching THAT STUFF.

I would have numerous hiding places for cash here at our house that it would take someone along time to find where I hid it away. Since I don't have a large amount of cash that needs hidden, I don't need to hide anything. Temporary small amounts can go in our safe if needed. When new it had a 3 year warranty, but that is long over. Apparently if high heat from a fire gets to it, something in the closing melts and protects the contents from the fire itself burning them up.