This month for Taking Stock, we're talking about emergency savings – how much is enough? And how do we save up when life is so expensive?
and the emotions behind “enough,” let’s tackle your question about what you should be doing with your emergency fund money. In short, nothing really.Should you be investing your emergency fund? There are two schools of thought. One says no, and the other says yes, keep it in. I have yet to meet an actual real-life person that has ever belonged to the latter camp.
In case you’re wondering about the second school of thought, those who say you should invest your emergency fund, I only recall seeing this advice given by companies that offer investments as their product or service. This brings a turn of phrase to mind: Don’t ask your barber if you need a haircut. In other words, understanding the incentives behind financial advice is an important aspect of making personal financial decisions.