I previously asked about putting my $15k emergency fund into a HYSA. That seems like a no brainer, as right now it is simply sitting in my BoA savings account (0.03%).
However, I'm wondering if taking it a step further and splitting it up 3 ways might not be a bad idea:
-$5k HYSA
-$5k VTSAX
-$5k VBTLX
This would give me $5k of quick liquid cash plus the $6.5k credit I have on my credit card.
Maybe I am overthinking this, but I wanted to get some more feedback on this idea. The topic of "investing" the emergency fund seems to be a fairly polarizing topic - some people recommend it while others highly oppose the idea of investing something that shouldn't be thought of as an "investment" to begin with.
Emergency Fund - HYSA, VTSAX, VBTLX
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anon_investor
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Re: Emergency Fund - HYSA, VTSAX, VBTLX
How many months of expenses is your $15k emergency fund equivalent to?
I would recommend just putting it 100% into a high yield savings account, you want the money there when you need it. Stocks and bonds are too volatile, they may be down (and down for months or years before they recover) when you need to draw from that money.
I would recommend just putting it 100% into a high yield savings account, you want the money there when you need it. Stocks and bonds are too volatile, they may be down (and down for months or years before they recover) when you need to draw from that money.
Re: Emergency Fund - HYSA, VTSAX, VBTLX
How is a credit card a emergency fund?
If you dont have the cash you dont have a emergency fund.
If you dont have the cash you dont have a emergency fund.
Re: Emergency Fund - HYSA, VTSAX, VBTLX
If you are young and starting out, I would not use any stock fund as part of my emergency fund.
If you are older and established, you may not even need an emergency fund although $5k in the bank is nice.
If your credit card has such a low limit, you are probably just starting out. It is frustrating, but an emergency fund can keep you out of trouble (downward spiral of debt) if/when something unexpected comes up. Don't try to shortcut this. Just do it right. Chances are the money will never get used but that's better than needing it and not having it.
As you build up your little hoard, you will not need to have money sitting on the side any more.
If you are older and established, you may not even need an emergency fund although $5k in the bank is nice.
If your credit card has such a low limit, you are probably just starting out. It is frustrating, but an emergency fund can keep you out of trouble (downward spiral of debt) if/when something unexpected comes up. Don't try to shortcut this. Just do it right. Chances are the money will never get used but that's better than needing it and not having it.
As you build up your little hoard, you will not need to have money sitting on the side any more.
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Re: Emergency Fund - HYSA, VTSAX, VBTLX
Yes you are overthinking. This entire money should be available tomorrow if needed hence called emergency fund. I would just keep it in HYSA or money market fund.CC268 wrote: ↑Thu Nov 14, 2019 1:22 pmI previously asked about putting my $15k emergency fund into a HYSA. That seems like a no brainer, as right now it is simply sitting in my BoA savings account (0.03%).
However, I'm wondering if taking it a step further and splitting it up 3 ways might not be a bad idea:
-$5k HYSA
-$5k VTSAX
-$5k VBTLX
This would give me $5k of quick liquid cash plus the $6.5k credit I have on my credit card.
Maybe I am overthinking this, but I wanted to get some more feedback on this idea. The topic of "investing" the emergency fund seems to be a fairly polarizing topic - some people recommend it while others highly oppose the idea of investing something that shouldn't be thought of as an "investment" to begin with.
"My conscience wants vegetarianism to win over the world. And my subconscious is yearning for a piece of juicy meat. But what do i want?" (Andrei Tarkovsky)
Re: Emergency Fund - HYSA, VTSAX, VBTLX
Sorry for the late reply guys. Thanks. I am moving the 15K into a HYSA.