Latest / The Emergency Fund Podcast with Fexingo: Cash Reserves, Saving, and Financial Cushion
How Your Emergency Fund Could Be Costing You a Vacation
Lucas and Luna explore the hidden opportunity cost of keeping too much cash in a low-yield emergency fund. They walk through the math of a specific listener scenario: a 30-year-old earning $65,000 a year who keeps $30,000 in a checking account earning 0.01 percent. By comparing that to a high-yield savings account at 4.5 percent and a conservative bond ETF yielding 3.2 percent, they show how that cash cushion is quietly costing over $1,300 a year in missed interest — enough for a modest vacation or a solid start on a Roth IRA. They discuss the 'cash drag' problem, how to calculate…
The skinny
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