Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Savings account for the emergency fund personally. CD ladders are fine too though, so are I-bonds (inflation-protected gov't bonds). Not sure why a financial advisor would disapprove of CDs for emergency funds.
Others have enough invested in bond and stock index funds that they can just use their investments as emergency funds. That's fine as long as the emergency fund would still be large enough even after a big (let's say ~50%) stock or bond market drop.
She really didn't disapprove of it outright... it was just a very subtle hint in the statement: "I usually recommend 3 months in savings and then move the rest to the Russel (tax management)".
I haven't decided how comfortable I am with that... I might move us to 6 months though.
the truth is if you want to be successful stop wasting your time reading about how many people are failures.
spend the time learning how you can be a success.
i have 50 bucks in my checking account . but i have 6 fgures in my brokerage money market which i write all my checks and pay my bills from . so once again the info is inconclusive and just as useless as all these other people have less than articles.
She really didn't disapprove of it outright... it was just a very subtle hint in the statement: "I usually recommend 3 months in savings and then move the rest to the Russel (tax management)".
I haven't decided how comfortable I am with that... I might move us to 6 months though.
I guess that's the professional recommendation but honestly I don't think it's a huge deal exactly how much is in there. Some are comfortable with 3 months, others with 6 months or a year.
There are three kinds of lies: Lies, Damn Lies, and Statistics
-Mark Twain
This is a perfect example of how you can have statistics say whatever you want, depending on exactly how you phrase things.
Like many others here, I have a very small amount in my checking account, just enough to pay the bills each month. The majority of my money is all off earning, even my emergency fund is earning a little, where my checking account earns nothing.
$0 in my checking account 95% of the time. the only time there's much there is on payday, until i transfer it to various savings, and then pull it back into checking when i make a payment to someone (credit card, mortgage, whatever).
crazy that people with bank accounts would let $3,100 (on average) sit doing essentially nothing for them....
Agree with everyone else, the amount a person has in checking is a somewhat useless number. Most of my money is allocated automatically to different investment accounts or gone within a few days of getting paid either to savings, Roth, or other accounts. Generally I have less than $3100.
$0 in my checking account 95% of the time. the only time there's much there is on payday, until i transfer it to various savings, and then pull it back into checking when i make a payment to someone (credit card, mortgage, whatever).
crazy that people with bank accounts would let $3,100 (on average) sit doing essentially nothing for them....
I would agree with you if the interest on savings accounts weren't so low. The .1% rate on our savings account would net $3.10 on that balance. If you have autopayment set up on your checking account, I don't think it's that crazy to forego < $5 a year to avoid a potential overdraft, not to mention the hassle of moving funds back and forth between savings and checking.
$0 in my checking account 95% of the time. the only time there's much there is on payday, until i transfer it to various savings, and then pull it back into checking when i make a payment to someone (credit card, mortgage, whatever).
crazy that people with bank accounts would let $3,100 (on average) sit doing essentially nothing for them....
Quote:
Originally Posted by Mr. Zero
I would agree with you if the interest on savings accounts weren't so low. The .1% rate on our savings account would net $3.10 on that balance. If you have autopayment set up on your checking account, I don't think it's that crazy to forego < $5 a year to avoid a potential overdraft, not to mention the hassle of moving funds back and forth between savings and checking.
Yeah I don't quite understand the $0 approach. I like having the operating reserve, and as Mr. Zero said, interest rates are so low that it's nowhere near the effort of transferring cash back and forth as needed just for a few bucks.
With constant debits going out at different times of the month (mortgage, utilities x 3, HOA, church, other charity, student loans x 2, credit card bill x 2, etc.), it'd be a full time job making sure the right amount of money was always there at the right times.
Personally, I try to make it so my checking balance never drops below $2000. I don't want to forget about some pending transaction, or have some bad timing of events happen while I'm not paying attention.
Also, some bigger banks have the obnoxious policy of charging you a fee if you don't maintain at least a $1500 balance of similar. I don't like it on principle, but it doesn't end up affecting me.
i maintain a very high balance in my checking/cma account. as said above rates are to low to really matter.
i am now semi-retired as of last week and keep a few years of withdrawals in safe money ready to go .
i worry more about my investments and pay zero time to my cash. cash is used for meeting volatility goals on my total holdings ,safe money for emergencies and spending money for bills. that is the only purpose i have for it.
all my growing is done with my real investments .
in the time it takes to deal with moving money all around for less than 1% more in most cases , putting that time in to developing better investment knowledge or better tax planning by learning more would far out weight your efforts on the cash.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
