stealth stash, invest, pay off debt, personal finance, early retirement, financial independence

Emergency Funds Aren’t Static

Believe it or not, you may have cash sitting around that you didn’t know about. I call this your “Stealth Stash” and it could be lurking within your emergency funds.

stealth stash, stealth, emergency fund

Stealthy, like this

How is this possible? Don’t people interested in personal finance, early retirement, and financial independence know about all the money that they have?

Technically, yes. Usually. But we all have blind spots.

Why Emergency Funds Aren’t Static

We all know we need to have an emergency fund. Three months of expenses. Six months. A year. More.

We calculate how much x-number of months’ expenses is and sock that emergency fund away, to remain untouched.

Let’s say you have monthly expenses of $5,000 per month right now. This includes everything from rent to any debt you’re still paying off. You’re young and single, and you’ve determined that a six-month emergency fund is ample for your lifestyle. You have $30,000 put away for emergencies.

But what do you do once you pay off a credit card or a loan? What if your monthly expenses are now $4,500 per month?

The Blind Spot

We usually don’t think about this because our primary focus is on paying off that debt. However, your 6-month emergency fund only needs to have $27,000 in it now. Take that “extra” $3,000 and go to Vegas!

I’m kidding,  but what would you do with an extra $3,000?

That’s entirely up to you, of course. The FI approved answer is to use it to pay down more debt or invest it. Or, you can just keep it in your emergency fund and have even more padding.

Whatever you do, don’t waste it. Keep it in your emergency fund if you’re not going to add value to your life in some way with that cash.

Do you have a Stealth Stash? 




  1. Mrs Groovy February 28, 2018
    • Moose February 28, 2018