makes this point about emergencies: " When you’re budgeting each month for inevitable car repairs, the bill from the mechanic six months from now won’t be an emergency at all."  So... have multiple smaller funds, each for a large, but foreseeable, expense (auto repair, home repair, job loss, etc that money can be shifted in and out of if required) or One Big Fund for everything?  (I'm in the multiple smaller funds camp.)
121005
Say we break down non-monthly costs into the following three categories.   High level of predictability: This would include oil changes that may be needed every 2 to 4 months depending on usage, car insurance (if paid every 6 month), car registration, etc. Medium level of predictability: There are some expense which one can reasonable assume will occur on an infrequent basis.  For example, car repairs, house repairs, or even doctor visits during flu season. Low level of predictability: For example, losing a job, significant medical expense, etc.   Which of these categories are emergency funds meant to cover?  I think it is pretty clear that a high level of predictability costs should not use emergency funds while a low level of predictability should.  But medium level of predictability costs seem different, and it left me wondering what is generally defined as an "emergency".  While you do not know when these costs will occur or how much they will be, you could devise some pretty good rules of thumb on frequency and cost. Say you know your 2007 Volvo should have a repair cost averaging out to $100 per month.  Conceptually you could save $100 each month and when your car breaks, not have to spend any emergency funds on the repair.  Is doing this "double-saving" and not suggested if you already have the 6 month emergency fund saved up?  Note: this is a question on how to save money for expenses.  It is not a question about if you should spend emergency fund money to fix a car when you have no other money set aside.
52639
Can you explain the time value of money concept, including present value and future value?  How does compound interest work?  Why is compound interest a powerful concept when it comes to borrowing, saving, or investing?
107977
I have $10,000 extra cash that I can either use to pay down my 5% mortgage, or contribute to my IRA.  I'm 30 years old.  I hope to pay off the mortgage in about 5 years.  I'm stymied, because:   Paying $10,000 into my mortgage earns me $500 a year (in interest savings) for the life of the mortgage -- hopefully 5 years. Paying $10,000 into my IRA earns me roughly a $3000 lowering of my tax bill now (plus CD ROI of about 1% at retirement time.)   So I can get $2500 ($500 a year over 5 years), after which I will have paid my mortgage off with other money; or I could get $3000 in cash right now plus a bit of extra money when I retire.  Even ignoring the future benefits of the IRA contribution, it feels like I should put the money into my IRA: it's an immediate 30% return on investment, as opposed to a 5% return for 5 years.  But if I always make that decision, I won't be paying off my mortgage early, and that $500 will stretch out over 30 years, costing me $15,000!  Which actually leaves me with more money in the end?  What basic principle of math am I missing?  Update:  The principle of math I was missing is that, assuming I'm taxed at the same rate when I retire as I am taxed now, I end up with exactly as much money as if I had invested the $10k and not received a $3k tax reduction.  (Of course, my income level and tax laws will have changed by then, but let's ignore that.)  So the question simplifies to, "Should I put $10k toward eliminating a 5% debt or toward a 1% investment?" in which case I should clearly put it toward the mortgage.  I was confused by the government incentive into thinking that retirement investment was a sweeter deal than it actually is.  This is probably their goal, and probably a noble one :)
107491
My wife and I were planning to buy a house this year, but the plan fell through, so right now we are sitting on the money that we saved towards down payment and renovations (prior to now money was in the Money markets, Savings &amp; CDs). We decided to stop looking for a house for about a year, and resume next February, though if a nice deal shows up we want money easily available. So in our situation what is the best way to make sure we don't lose any principal, but to see that our money doesn't sit idle. CDs are pretty much out of the question: for a 6-9 months period interest is lower than savings. The best I was able to come up with (according to ) were:   - 1.2% + 10% on the interest earned.   - 1.15%   - 1.15%   According to their websites all of them are FDIC members. Are there any other options? I don't really know anything about bonds. Are they a viable option? Final Solution: My boss recommended I check out  ( they are a Texas bank with locations in CA, IL &amp; TX, obviously the website.) They are offering 2.02 % on a 60 months CD - but here is the kicker, if I need to pull the money before it matures, they only take the last 2 months of interest as a penalty. So I think that's a good solution for me. The website says they are FDIC insured and there are a brick and mortar branches not far from me. Update: This bank I mentioned, doesn't seem to exist anymore, through a series of purchases. So scratch that suggestion. Thank you everyone for your recommendations.
78633
I'm looking for other proverbs similar to "We're not rich enough to buy cheap things". This is because I want to use it for a similar but a little bit different purpose. I want it to be meant that to get something valuable you must pay more than the price that is common place.
23652
I was reading this article about S&amp;P 500 short ETFs:     and I was confused when it said: "investors should note that such products are suitable only for short-term traders as these are rebalanced on a daily basis". What is ETF rebalancing exactly? and why does it make these ETFs unsuitable for long-term short trading?
116270
Generally speaking, if you've come into a little bit of money (for example, the profit from the sale of real estate), is it better to use that money to pad your savings account or pay down your debt leaving behind very little in your savings account? What factors should be considered?
51488
I have a 2004 Honda Accord EX.  It has close to 200k miles but is paid off.  KBB says its worth is between 2500 for trade in or 3500 for private party sale).  I don't know much about cars but it seems to still be in good condition.  I've brought it in every 10k for servicing and have it up to date on any recall repairs required.  At the last servicing, the dealership said that my brakes needed replacing (~$800 at the dealership, probably cheaper elsewhere).  Also, the tires were old but they still had some wear left (7 yrs old but measured at 6/32).  Estimating about $600 for tires from Costco.  I was advised to look into getting new tires due to the rubber starting to break off and having a possible blow out on the freeway.  So right there is around $1400 in repairs, about 1/2 the value of the car.  Someone told me if the repairs are cheaper than a car payment, then do it.  In this case, if I keep the car about 4 months, then it's close to break even.    However, due to the car's high mileage, it's possible that something might come up within this 4 months and to break even on whatever the new repairs are, I will need to keep it longer and thus a possible endless cycle of repairing/keeping an old car to break even.  So, does it make sense to put in ~$1400 to fix now and drive for at least another 4 months or start looking for a new car and not worry about repairing a possible money pit?  UPDATE: This is a 2004 Honda Accord EX in "good" condition (good after answering the questions from KBB)  UPDATE #2: Seems like the price can change too.  I just checked on KBB again for the price and it says my vehicle is a low volume vehicle and can't give me a trade in price but gave me a private party sale price.  I guess the price can change from week to week (or in my case about 3 wks ago) depending on the market.    EDIT: I just realized I should clarify my thought process in this situation.  There were a couple times in the past where my family kept putting money into an old car b/c "they don't make them like they used to" or "it's still a good car.  Don't get rid of it", or like everyone is saying here in the answers and comments.  One car we had, an old Volvo, needed repairs and we put about 9k over 18 months into the car and it still wasn't working right.  We sold it but only got 1k from the buyer after pouring so much money into it.  Another time, we had another car that needed a 2k repair.  We calculated that to get our money's worth, we needed to drive it for about 7 months to get our money's worth and break even.  We drove it 2 months before it broke again and needed a 1k repair.  We estimated needing to drive an additional 3 months to break even.  After another 2-3 months, something else broke but we kept throwing good money after a bad problem.  I don't remember the total amt we wasted in the 2nd case but the issue was the same, we put a lot of money in but didn't get our return and didn't know when to cut our losses.  So, this is why I'm asking this question now with my current car.  The lucky thing is, I've looked up the KBB price before anything happened (we didn't look up before with the two previous cars since there was no internet or iphones at the time) and I'm more knowledgeable due to personal experience.  Hopefully this explains my thought process in this situation.  I don't want to get caught throwing good money after bad or feeling like I need to keep driving to get my money's worth from the repair.  Thank you for everyone's answers and comments thus far.  They've all been helpful.
14157
I spend about $20-30 a week on my debit card, with periodic $200-300 purchases every few months. I've thought about getting a credit card the moment I turn 18 and using it to buy everything, then immediately paying it off. Assuming I only use it to buy things I can afford (which I trust myself to do), essentially treating it as a debit card, is this a good idea? Or should I wait until I'm a bit older?   Assume that I will only spend money I have in my bank account at the time I spend it and that I will keep track of how much I spent and never spend more than I have.  Joe Taxpayer recommended I post an update: I ended up getting a card, and from my perspective the only thing that's changed is that it takes things ~24 hours to show up on my statement and I don't have to enter a PIN when I checkout. Should I add this to the question? I know on other SE sites people generally don't like updates in the questions
105900
This is the only place where I knew to turn for a question like this. I am a student (if that will make me look better to the loan officers), but I'm fairly certain I have no credit. I took out a secured credit card and have been playing with that for that sole purpose but I am unsure if it's come to fruition yet.  I can close $800/mo confirmed income as I work part time, however I have no expenses as I live at home. I have no co-signer as I am on my own with this one.   I really need a vehicle that is attractive and comfortable (sedan) to transport people in. I want to enter a career and that is pretty much a requirement unfortunately. I'm looking at a specific make and model at $10-11k which I am sure can be brought down to $9-10k with some haggling.  My question is, will I be able to get financing whether through a dealer's connections or through a bank? I was told by someone that I should get approved without a co-signer simply because I have no actual expenses to speak of so that's pure cash (after taxes of course) rolling my way to put towards the loan.  So is there anyway to get this done? And is it likely to get approved? I don't want to go to the dealership and then be told no, that would be as disheartening as it can get for me.  Again, I'm not sure where else I could ask a question like this. If it is inappropriate, please direct me to a site or multiple sites to post this at as it's something I have been researching for a very long time but cannot find existing answers from people in a similar situation.
3669
I'm a US resident and I've saved &gt; $100k cash for a home deposit. I expect to finance a home in the next 12 months. Currently the cash is split between Bank savings account and a couple of money market accounts (like FMOXX). Are there higher yield, short term alternatives for this type of saving? Note I'm not after specific product recommendations, but general investment strategies for this type of situation.
9810
One specific (popular online) bank is offering a 9 month 1.25% CD, while it's savings account is 1.90%.  There's no way I see interest rates tumbling in the next nine months, so why should I -- why should anyone -- get a 1.25% CD when savings accounts are paying 52% more interest?  (This question is not specific to this particular bank at this particular time.  It's about the general practice of buying low-rate CDs when savings accounts have a higher rate.)
1934
I currently have a large pile of cash savings ($240,000) which I really should have been investing all this time, but the past is past and no point dwelling on it.  I am currently 38 years old (2 kids. Wife who is also a high earner - $100,000), with a high salary ($150,000). I have read "The Intelligent Investor" and am really sold on dollar cost averaging as a strategy, using the index funds offered by Vanguard.  My current dilemma is what to do with the cash I already have. My current plan is to still follow the dollar cost averaging and slowly move it into vanguard over a period of 4 years (~$5000 per month). While leaving the remaining parts of the cash in term deposits. So $50,000 in a 3 year term deposit at 3%, $50,000 in a 2 year term deposit at 2.8% etc.  But in someways it feels overly conservative. Should I just move all the money now? Or perhaps in a shorter time frame (3 years? 2 years? 1 year?).  There are a few other questions on the site similar to mine, but they are from 2013/2014 etc. Given that currently the stock market is at a high and there is a lot of economic uncertainty on the horizon, putting everything in the stock/bond market at once now seems like a risky move. And it seems to violate the principle of dollar cost averaging. Or am I violating dollar cost averaging by trying to "time the market" by looking at it's current value?  Reading this section  seems to indicate that I should just invest everything now. But the first paragraph also seems to suggest giving more weight to that advice if the market was trending upwards (Which I am not certain the current market is/will be for long).  PS: My current investment horizon is long. Basically retirement, about 20 years from now.
56998
If I sell my car off at a loss, can I write that loss off against my income to save on tax? Does it matter if the car was used just for personal leisure use, or if I used the car to generate business income? (e.g. travel to work, to attend education seminars, etc.)
58716
I heard that it's good to have a balance because then the bureaus report that balance -- if you pay it off before they report it, they report zero.  Since you want the bureaus to know that you use credit because that's how your credit score increases, should I pay the balance as soon as possible or wait as long as I can before  I have searched far and wide and I am confused in what I should do here.  I want my score to increase the best and fastest way possible, but the concerns I have are not with utilization -- they are with when I should pay and how that will affect my score based on if the bureaus see any credit use or not if I may be paying too soon.  To make this very clear, I want to know if the credit utilization will still be reported if I pay my bill as soon as possible, because I want my credit use to be known -- I don't want the reported credit use to be zero if I am using credit and paying it off if before it is sent to the bureaus.  If this doesn't make sense, I'm sorry -- I can't think of any other way to word it. I want my credit use to be known to the bureaus basically, and I am worried that if I pay too soon they won't know I used any (when I did). Is there any definite, clear answer to my concerns?
91667
Savings accounts don't seem to generate much interest. What other options do I have for my emergency fund?
106864
I can pay $1200 extra once a year or $100 every month - which is better?  The first one does sound better, but for a 30 year mortgage, is it that significant?  Say the mortgage is for $200,000.  Thanks.