EF cash

[LivingAlmostLarge]

How do you guys stagger your emergency fund and cash? I'm still sitting on a lot of cash and I'm debating finally on running a bit lean like before. I've gotten used to having a large cash cushion. But we're sort of in the place now with a set mortgage, expenses, etc that we should run leaner and we know what our monthly expenses are and maybe I should just downsize to 3 months?

How do you guys budget your slush funds and EF? I was thinking like 1 month slush in checking and 3 months in capitol one savings account? Then investing the rest. I keep thinking maybe i-bonds? Would 1 month slush and 3 months I-bonds be good?

[corn18]

Do you have a taxable account? I just use that as my EF these days. Kindof. It's big enough now that it covers the job loss EF stuff.

I have a tiered approach:

1. 1 month in checking. Just the natural result of cash flow.

2. Cash flow. I push my monthly pension into taxable each month but that could go towards cash flowing an emergency

3. Taxable: I started buying a tax free bond index fund in my taxable account. Serves 2 purposes: it's part of my overall 60/40 AA and it survived the 1500 point dow drop with much aplomb. It's big enough now to cover a job loss for 6 months. The overall taxable account is big enough to cover a couple years of no work, but the stock side is carrying significant taxable gains.

4. Roth accounts: Last resort but there is a large chunk of after tax Roth money that I could get to if I needed to. Would like to keep it there forever and give it to my kids as inheritance.

Then there's my "I'm dead and I don't want my wife to worry about cashing in mutual funds and I bonds while trying to get me in the ground" fund. That's 6 months of expenses. Sits in a savings account right next to my main checking account. It's also an EF, but if I weren't concerned about my wife figuring things out right after I died, I would invest this. I don't need an EF anymore. But I talked it over with my wife and she would prefer to have things run on autopilot for a while if I die.

BTW, there really isn't a wrong answer for an EF, but there is the right answer: put it in an easily accessable place with very low risk (e.g. cash).

[Like2Plan]

How do you guys stagger your emergency fund and cash? I'm still sitting on a lot of cash and I'm debating finally on running a bit lean like before. I've gotten used to having a large cash cushion. But we're sort of in the place now with a set mortgage, expenses, etc that we should run leaner and we know what our monthly expenses are and maybe I should just downsize to 3 months?

How do you guys budget your slush funds and EF? I was thinking like 1 month slush in checking and 3 months in capitol one savings account? Then investing the rest. I keep thinking maybe i-bonds? Would 1 month slush and 3 months I-bonds be good?

Do you already have some I-bonds? The thing I don't like about I-bonds is you have to hold them for a year before you can cash them in--so, initially anyway they are not as liquid as I would like for an EF. There is another limitation--Maximum purchase (per person) Electronic: $10,000, total, each calendar year and Paper: $5,000, total, each calendar year (some folks over-contribute their tax withholding and get the refund in paper I-bonds). So, it might take a couple of years to get that going.

[tripods68]

How do you guys stagger your emergency fund and cash? I'm still sitting on a lot of cash and I'm debating finally on running a bit lean like before. I've gotten used to having a large cash cushion. But we're sort of in the place now with a set mortgage, expenses, etc that we should run leaner and we know what our monthly expenses are and maybe I should just downsize to 3 months?

How do you guys budget your slush funds and EF? I was thinking like 1 month slush in checking and 3 months in capitol one savings account? Then investing the rest. I keep thinking maybe i-bonds? Would 1 month slush and 3 months I-bonds be good?

We are very lean--we keep about $3K minimum in our checking acct. The rest are invested in Vanguard taxable account. I maybe switching back to a Vanguard Wellington Fund (Admiral) later this year.

We mainly use our credit cards now for any short fall but we pay it off at the end of the month.

[disneysteve]

We have money spread in a variety of places.

There's always about 4-5K buffer in our checking account.
We have an online savings account with Capital One with about 6K.
Our taxable brokerage account has about 5K in cash.
We have 25K in I bonds that are all past the 5-year window to redeem without penalty.
We also keep some physical cash on hand for catastrophic stuff like natural disasters and such.

And there's always the 250K in Roths and another 400K or so in taxable investment accounts that should cover pretty much anything.

So really only about 15K or so in cash instruments. I bonds aren't really cash in my mind. Everything else is invested though a lot of it is pretty easily liquidated.

[skives]

This is my dilemma right now. As I have posted before on these forums. We have 6 months to a year or EF cash in our online savings account. I now it is enough but I am so use to having $30k plus and I want to pay our mortgage off faster but at the same time I want to get our savings to $50k. I don't know what it is about that number I just feel it's a good amount saved.

[bjl584]

Most of the cash that I have is in a Fidelity account.
I can wire transfer it and have it within 24 hours if needed.

[kork13]

I keep about $2k as a checking buffer, plus $1500 in an adjoining savings account (primarily as overdraft protection, but available for whatever). That's not even 1 month's expenses though. I keep 1 month in an online savings account, and 5-6 months in mature I-Bonds. Those two make up my primary EF. Of course, I have cash & investments elsewhere that are accessible in a true emergency, but I don't really tag them as such.

Really, corn18 if totally right.... The only way you can get it wrong with an EF is not having one. The structure of how you do it, or how much you keep in there, are totally flexible & up to your good judgement. Do what keeps you & your family comfortable. That's something I've often heard an EF called: a "Sleep Soundly at Night Fund". Your EF shouldn't make you worry -- it should reduce financial stress & concerns. If it's not doing that for you, you need to reevaluate your EF.