So, we were thinking about this one
2 years ago
Well, I thought about it then I talked to my husband about it. We’ve agreed that our end goal will be as follows.
In order of decreasing liquidity:
- Checking account – One month rent + 1,000 + monthly normally budgeted money (direct deposit in, groceries/gas/etc out)
- Savings account at same bank – One month expenses for emergencies (also linked for overdraft protection)
- ING Savings account – Two months expenses for continued emergencies / joblessness. This is at a much higher rate of return than the account above, but it takes several days to get from here into our checking account.
- CDs – We don’t have any yet. When we’ve filled the three slots above, we’ll start taking money into CDs for an even higher rate of return.
- 401(k) – We’ll invest in this as soon as possible. At this time, we need to fill at least the first three slots above. A year from now, my husband will be eligible for a 1/2 match from his employer for the first 4% of his salary, so we’ll definitely be investing at least that much at that time. Until then, this is a lower priority. (I know that the earlier you invest, the better. It can wait until we put away our emergency stash though, we’re only in our early 20s after all.)
Now, all that’s left is actually saving the money!
