You have an emergency fund. Now what?

November 2, 2009 at 6:04 am 5 comments


I’ve always been an advocate of having an emergency fund. In my previous blog entries, I recommend that you should have at least eight months’ to one-year worth of emergency fund (see story).

But what if you have already completed your emergency fund? What if you have managed to amass one-year worth of EF? What now?

First of all, congratulations! This is a great way to start your pursuit of financial independence.

Now that you have your emergency fund, make sure you keep this safe and sound. Place it in a time deposit that gives you a pretty good interest rate.

Any money that comes in now can be placed in other investment instruments or earmarked for other goals. If you’re planning to buy a new house, then you can start saving up for the 20% down payment. You can also start investing in mutual funds or bonds. You can also get additional insurance for you if you have dependents. Basically, the coast is clear for any investment you may want to take.

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5 Comments Add your own

  • 1. teeyah  |  November 2, 2009 at 6:43 am

    Great post, as always🙂

  • 2. Millionaire Acts  |  November 10, 2009 at 1:44 am

    Then it’s time for you to invest after you have already secured your emergency fund. Look at other types of investments aside from traditional ones like savings accounts and time deposits. Gauge risk and liquidity needs first before plunging in.

  • 3. Emy  |  December 15, 2009 at 6:19 am

    Hi this is a great post! I’ve always have this perception that Emergency Funds should be in a savings account that is withdrawable, now i’m quite confuse on how can an EF as the word implies “emergency” can be invested on time deposits and the like. Hope to hear from you.

  • 4. pinayandmoney  |  December 15, 2009 at 7:24 am

    hi, emy. you can place your emergency fund in short-term time deposit like monthly or quarterly. the idea is that your money should be kept safe and sound, and can easily be withdrawn in case you need it.

    if you’re not comfortable in putting everything in a time deposit, you can save a portion of it in a savings account. let’s say you have 100K of emergency fund, you can keep 20K in savings account and then keep the 80K in time deposit. =)

  • 5. Patnubay  |  March 2, 2010 at 4:33 am

    are you a Registered Financial Planner? just wanna know…

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