Need advice on 5-month EF

**mikandmari** · 12-12-2007, 02:08 PM

I'm looking for advice/opinions on this: We have our emergency funds as follows:

$1000 -- ING savings (2 days to access)
$5000 -- ING CD (matures every 6 months, can be accessed in less than 7 days with loss of accumulated interest)
$6500 -- Invested in Mutual Funds (could be cashed in, and funds received in about 7 days)

The total here is $12,500, which, if push came to shove, could last us 5 months. I'm not worried about the time it takes to access the money, I always have some $$$ in my checking account to last a couple of weeks.

But I'm a little concerned about the $6500 in mutual funds. I know that no one has a crystal ball to see the future, but I'm wondering if I can consider it an "emergency fund" if it's invested in something that could possibly lose value. I'm thinking I should cash them in (there are 2) and put them into another CD. They've had good returns, but the reason for the EF is if my dh ever gets laid off from work... and if the economy tanks, it is more likely to happen.

We also have 401Ks and IRAs that we won't access for many years, so they have time to ride out any fluctuations in the market. I don't think of them as 'money in the bank'!

Sorry so long... thanks for any opinions!

**Denvergirlie** · 12-12-2007, 07:01 PM

I don't have a great idea for you. Do you know what Dave Ramsey recommends? You might also want to consider keeping some of that in cash at home, at least a few hundred. A major weather event with no power and all the money you have in not accessible, nor is your money in the normal bank because ATM"s don't work, etc.

Look at Katrina, those ATM's were out of cash fast.

Good luck and congrats with the nice EF.

**monkeymia** · 12-12-2007, 08:30 PM

I also think that a little cash is needed as a few years back we had massive bushfires here and nobody could access ATMs so we all couldn't access our money. Luckily we had some cash in our wallets to tide us over.

**mikandmari** · 12-12-2007, 09:04 PM

Good point. I think I'll "hide" a little bit, just in case.

Yes, my EF is pretty good, but now I have to tackle the debt.

I read Dave Ramsey's book, but one thing I won't do is spend the EF to pay off debt, then begin building the EF back up... I won't do it this way, because sometimes my husband faces layoffs from work. My finances go from feast to famine pretty easily!

**kiveve** · 12-12-2007, 09:41 PM

Would having a credit card help this be emergency fund money? You could access all of your EF money within the credit card's billing period and pay it off immediately.

**Dave'sGirl** · 12-15-2007, 06:57 AM

Just a suggestion on keeping cash at home. Keep it in the freezer! Sounds stupid, but really, noone would ever think to look there and let me tell you, I had my house fire and lost everythin (my dear Jake included) but I kept cash and my credit cards in the freezer as a habit and they were safe and sound. We had to pry the freezer open cuz it was melted shut, but I didn't have to go thru reporting all those cards, etc. Also GET A FIRE BOX!!! You could keep the cash in there too I suppose.

**Dave'sGirl** · 12-15-2007, 07:00 AM

Just a suggestion on keeping cash at home. Keep it in the freezer! Sounds stupid, but really, noone would ever think to look there and let me tell you, I had my house fire and lost everything (my dear Jake included) but I kept cash and my credit cards in the freezer as a habit and they were safe and sound. We had to pry the freezer open cuz it was melted shut, but I didn't have to go thru reporting all those cards, etc. Also GET A FIRE BOX!!! You could keep the cash in there too I suppose.