5 Questions: Emergency Funds, Debt vs Invest, and Frugality? - a podcast by ListenMoneyMatters.com | Andrew Fiebert and Matt Giovanisci

 

We answer your questions about emergency funds, whether should you prioritize debt or investing, and is being frugal the latest hipster trend?  Find out!

I have $30,000 in a savings account and am moving it into Betterment as LMM recommends.  How much should I move over monthly until it’s all relocated?

The answer will be different for everyone.  Andrew followed up with Dillon and found he was saving $1100 a month.  Andrew advised 2.5 times that amount be put into Betterment.  Once Dillon has $20-30,000 in Betterment, he should stop contributing and consider that his emergency fund.  Then start diversifying into something like Van Guard.

I have a Capital One Quicksilver card with 0% APR until January 1, 2015.  Will I be charged interest if I don’t use this card after December 30 if the bill is due on January 12th?

Even with a 0% APR card, you have to pay at least the minimum every month, otherwise you get an interest charge on the entire balance. Automate the monthly payment so it won’t slip your mind.

I disagree with your stance of paying off debt over investing.  Even if the market has a down year, the money should be invested with a time horizon of at least five years. 

This isn’t really a question but a statement.  We’ll allow it anyway.  When we make our argument, we are referring to high interest debt like credit card debt.  For something like  student loans or a mortgage with a low interest rate, you can invest your money before throwing huge amounts at those debts.

In Australia banks allow you to open a trading account linked to your checking account.  I can buy and sell shares through my account.  Should I use Vanguard or stick with my bank?

You can invest that way through Fidelity too here in the States.  If it’s like a 401K and you only have access to a limited amount of funds, the fees will likely be high. Vanguard has very low fees and as Betterment isn’t available in Oz yet, Vanguard is the best option – these are our favorite Vanguard funds.

Do you think frugality is a trend right now?

Absolutely, having really picked up steam after the 2008 crash.  There are even shows about couponing!  It seems to trend during crashes and then fade away a bit when things are better.

We love doing 5 questions shows.  Keep sending your questions in.  If you want to know you can bet others are wondering too.

Show Notes

Betterment: The place to stash your emergency fund.

Vanguard: For the more sophisticated investor.

“All My Money” Personal Finance Rap Video: If you’re new to the show, you might not be aware that in February of 2014, we self-produced a rap video about personal finance. I’ll include the video below, but you can click the link to see a behind-the-scenes videos, lyrics, and more.



Ommegang Hennepin Farmhouse Saison: This is the beer that Andrew enjoys on the show in a big-ass bomber bottle. See photo below.


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