Loading…
19
Thought I was crushing it with a $4,200 emergency fund until my car died in Phoenix
For two years I felt so smart stashing cash in a savings account that paid 0.4%. Then my transmission went out in Phoenix last month and the shop wanted $3,100 up front. I had the money, but pulling it out meant draining almost everything I had set aside. That was the moment it hit me. I was patting myself on the back for saving while inflation ate the value and one bad week could wipe me out. Now I keep $1,000 in checking for stuff like this and the rest sits in a high yield account. How do you all split up your emergency money between quick access and actually earning something?
1 comments
Log in to join the discussion
Log In1 Comment
parker_lewis27d ago
Learned that same lesson the hard way a few years back when my water heater blew and I had to drain my whole savings in one phone call. What worked for me is keeping a small buffer in checking plus a little cash at home, then the bulk of it in an online savings account that actually pays something. The trick is the transfer time, most of those accounts take a day or two to move money to checking, so I keep enough liquid to cover the "right now" stuff and let the rest sit and grow. Splitting it like that means one bad week doesn't wipe you out AND you're not losing to inflation on the whole pile. Your $1,000 in checking sounds about right, maybe even bump it to $1,500 if your bills run high.
2