911, what’s your emergency? You’re in a panic over hearing Christmas songs on the radio already? 😵💫🎄 We’ll send out a WHAM-bulance right away. Look for the vehicle with George Michael as the driver. 🚑
We flap our lips quite a bit over the importance of an emergency fund…but where’s the best place to keep your money? 🤔
Here’s Five Fast Facts on where to park your emergency fund:
- 🕵️ High Quality Qualities - When you’re scoping out a place for your emergency fund, look for somewhere low-risk that lets you access your money with ease. Unlike other piles of money, you set aside your emergency fund…in case of an emergency. You don’t want to bet it all on black in a risky investment. You also want liquidity, meaning you can pull that money out as soon as you need it. Penalty-free withdrawals are also a must-have.
- 📈 Can You Take Me Higher? - Wanna let your emergency fund grow while you’re waiting for that catastrophe? Park it in a high-yield savings account. Chances are your bank has an option or two. Sure, you can keep it in a regular savings account, but a high-yield version could earn you up to 5% a year in interest. That’s money for nothin’ baby.
- 👛 In the Market for Money - Another great place to stash your cash is a money market account. These bad boys are like if a checking account and savings account had a baby. You’ll earn interest on your savings and you may also get a debit card and/or checks for easy withdrawals. FYI - some money market accounts do charge fees, so double check.
- 😎 C-Deez Funds - A short-term certificate of deposit (CD) is another choice. You’ll have to keep your money locked in for a short period of time (a few months to a year), but it’ll grow while it’s in there. If you need your money before that, you might get hit with a penalty. Penalty-free options exist, but they don’t earn as much interest.
- 👎 Taking Stock - Where shouldn’t you put your emergency fund? Stay away from the stock market. You’ll be able to ride out any downturns and grow your money over the long term, but a blip in the market in the short term could drain your savings and leave you high and dry.
🔥Bottom line: Bonus tip: don’t rely on your retirement savings as an emergency fund! Yes, you can tap it in an absolute emergency, but you’ll pay Uncle Sam some hefty tax penalties if you’re not of retirement age. Hey, are manufacturing jobs really coming back? We’ve got the scoop right here.
How’s your emergency fund looking these days?
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