Big expense in 3 mo. Money now. Where to hide money?

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VentDoc2842
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Big expense in 3 mo. Money now. Where to hide money?

Post by VentDoc2842 » Mon Jul 09, 2018 9:55 pm

We have a large expense (~$27000) that will come due in around 3 months. Just received the bonus that we will use to pay this expense now.

I would like a place to stow the money to keep from spending in our free checking account. Thoughts on short term parking location?

1. 3 month tbill — may have to withdrawl prior to the set maturity by about a week but earning a bit more than money market

2. Stick in prime money market, which is YTD below treasury yields.

3. Doesn’t matter. Just stick in low interest checking account and avoid the hassle.

Thoughts?

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triceratop
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Re: Big expense in 3 mo. Money now. Where to hide money?

Post by triceratop » Mon Jul 09, 2018 10:00 pm

(1) is untrue; Vanguard Prime Money Market has an SEC yield above 3-month treasuries.

(2) is faulty logic -- the forward looking return on prime money market is not related to the YTD return.
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Nicolas
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Re: Big expense in 3 mo. Money now. Where to hide money?

Post by Nicolas » Mon Jul 09, 2018 10:04 pm

Put it into a high-yield online savings account. Some are yielding 1.8% and are FDIC-insured, Prime MM is not. I’m using Synchrony Bank.

You’ll make roughly a hundred bucks above what you would earn in your checking account, pre-tax. Not a lot of money, I suppose, but every little bit helps.
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jacoavlu
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Re: Big expense in 3 mo. Money now. Where to hide money?

Post by jacoavlu » Mon Jul 09, 2018 10:10 pm

Doesn’t much matter. Don’t hassle with buying a T bill that you can’t hold to maturity. Personally I’d put it in prime MM but that’s what I have easy access to.

What’s the expense? Can you call them up and see if you can get a little discount to pay early? Might beat any return you can get in 3 months time.

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Sandtrap
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Re: Big expense in 3 mo. Money now. Where to hide money?

Post by Sandtrap » Mon Jul 09, 2018 10:12 pm

Vanguard Prime Money Market.
High yield savings acct. (bank rate.com)
For such a short time frame, the most important thing to do is secure your principal and retain liquidity.
Previous poster had a great idea. Call the lender/creditor. Maybe you can get some fees or interest knocked off by paying 3 months early.
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radiowave
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Re: Big expense in 3 mo. Money now. Where to hide money?

Post by radiowave » Mon Jul 09, 2018 10:14 pm

For 3 mo, I would just put it in checking. If it was a year or more, I would recommend a high yield savings or CDs/T-Bills.
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VentDoc2842
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Re: Big expense in 3 mo. Money now. Where to hide money?

Post by VentDoc2842 » Mon Jul 09, 2018 10:26 pm

Thanks everyone. I appreciate the quick replies.

I will look into the paying early plan. Not holding to maturity was my big question, which was answered quickly here. If cannot get discount for early payment,will probably stash in prime money market

Thanks again for the help.

Momus
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Re: Big expense in 3 mo. Money now. Where to hide money?

Post by Momus » Tue Jul 10, 2018 1:34 am

Chase a bank bonus... for example chase you can get $300 for depositing 25k for 3 months. It's likely going to net you more than the interest rate alone.

https://www.doctorofcredit.com/best-ban ... t-bonuses/

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Tamarind
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Re: Big expense in 3 mo. Money now. Where to hide money?

Post by Tamarind » Tue Jul 10, 2018 5:40 am

If you just need a psychological cue to not spend it, how about opening a new HY savings account labeled with the thing you need it for.

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Phineas J. Whoopee
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Re: Big expense in 3 mo. Money now. Where to hide money?

Post by Phineas J. Whoopee » Tue Jul 10, 2018 6:40 pm

Exercise the discipline it took you to make it through med school and residency. That is, don't spend it on something else regardless of where it is.

For three months an, or combination of because of the large amount, FDIC-insured account is the best choice.

PJW

JoeRetire
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Re: Big expense in 3 mo. Money now. Where to hide money?

Post by JoeRetire » Tue Jul 10, 2018 6:45 pm

VentDoc2842 wrote:
Mon Jul 09, 2018 9:55 pm
We have a large expense (~$27000) that will come due in around 3 months. Just received the bonus that we will use to pay this expense now.

I would like a place to stow the money to keep from spending in our free checking account.
Do you actually lack the willpower to avoid spending it when you know you'll need it in 3 months? If so, give it to your mother to hide in her cookie jar.

For me, I'd just put it in an online money market account.

jacoavlu
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Re: Big expense in 3 mo. Money now. Where to hide money?

Post by jacoavlu » Tue Jul 10, 2018 6:57 pm

PJW how do you know OP is a physician? Maybe he’s in HVAC ;)

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Phineas J. Whoopee
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Re: Big expense in 3 mo. Money now. Where to hide money?

Post by Phineas J. Whoopee » Tue Jul 10, 2018 7:24 pm

jacoavlu wrote:
Tue Jul 10, 2018 6:57 pm
PJW how do you know OP is a physician? Maybe he’s in HVAC ;)
I guessed based on the username and the question. As you know, I do not in fact know.

PJW

Thegame14
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Re: Big expense in 3 mo. Money now. Where to hide money?

Post by Thegame14 » Tue Jul 10, 2018 7:50 pm

online savings accounts, Ally is 1.75%

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