Quote:
Originally Posted by wutamess
Well... I've come to the realization that other than a layoff, having to take an emergency trip or pay for a funeral (Which I just paid for my fathers), I just don't need much more than $2000 in savings.
I keep $2-3K in savings/emergency account, then max out ROTH IRA contributions as it's a secondary savings and then the rest goes to an out of pocket/regular investment account. The 6+ months emergency fund is in the Roth IRA since withdrawals aren't taxed or penalized (which I've never had to draw on).
Is any of this a bad idea?
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No, nothing wrong with this idea and it's exactly what I was talking about.
Although I definitely like to keep more on hand for emergencies than $2k. Car repair, pool repair, AC repair, home maintenance projects, buying furniture, those can easily run close to or over $2k at a given time. I'd treat the Roth emergency more like a $5-10k+ type of emergency myself but plenty of people do just what you're saying and really have a low amount of money in savings accounts.