I struggled with a too big EF in very liquid cash - like in my checking account (no interest) and a savings account (little interest). I determined how much I needed as cash (turns out having one month's take home pay is plenty to hold in cash) and then moved the rest to a HYSA account until I could figure out what to do with it. (All of the EF money in my HYSA went to investments - it let me max a Roth and HSA and 401K the first year when I became eligible for "catch up" contributions because I could do it from my paycheck and some went to my after tax account. )So, what do you think of my non-problem? How quick should I start moving the savings into my portfolio? What would you do in my situation?
Here's my suggestion:
1.) Do you have any big expenses coming up that you anticipate having to borrow money to pay for in the next year or two? Can you use your excess EF money to avoid borrowing or on the other hand selling investments? Can you find someplace to conservative and low cost to stash the cash so it doesn't loose value while you wait for the Big Expense? Is it worth it to hold cash a little longer to avoid interest costs or tax costs of selling investments?
2.) If you really don't need to keep so much money not working hard for you - just start DCA'ing into investments according to your plan. Set a period of time 3 months, 6 months, 1 year... and then just do it. Yeah, I know lump sum investing is better over the long run - but sometimes emotions get in the way. DCA'ing the money means buying high won't hurt as much and buying low will be a "well, atleast I got some on sale". This works well especially if this money will be invested a long time - get that money working hard for you!
Statistics: Posted by LittleMaggieMae — Sun Feb 08, 2026 2:19 pm — Replies 2 — Views 200