6 CD's - Emergency Fund

Eventually, when debts are eliminated, I would like to create a more secure emergency fund. I hate to say it, but I don't like money sitting in normal savings. Especially, when the rates at my bank are a piddly .24%. Is that even a tangible amount?

Of course, I will leave the $1,000 in that crappy account. It is easy accessible and frankly you just never know when you will need to access cash on the fly. Waiting for an online bank or c.d. could make the days feel like years when there is an emergency. Plus, by leaving this balance above $1k I get no fees and more transactions.

Which is more important, because I have my real estate contract sale make their monthly automated payments to this account. And I then have my own automated payments to move out for my home. So, the money remains dormant there - as a true EMERGENCY FUND.

My goal, after we stop financing our annuals is to create 6 - 6 month Certificates of Deposit. So that one matures every month after the initial set-up. Creating the recommended 6 months of expenses accounts.

Again, these accounts are not for massive returns, instead focusing on emergency access.

This has been an in the future idea, because we are still fumbling with the pay as you go life style. Of course, with every month, we get closer to making this a reality. Just amazing, looking back how far we have come.

Add this to the fact that when extra money comes in, from online income or surveys, it seems to just disappear in the commingling.

Left me with a thought. We can make it without those extra dollars, day to day. Those dollars though, have been a help at achieving our savings balance to cover those huge annual bills. With the goal almost achieved, about $3k to go in 3-4 months, I decided to make some changes.

Every month, for the next 6 months, I am creating a CD at ING Direct with my recieved online (extra) income.

ING has a great option, where you can have your interest paid to another account. I did select this. After all, I want to feel a bit of extra income from these streams. And believe me it is a bit.

I didn't wait until the first of next month to start, because there is no better time then the present. I had just over $100 from these avenues sitting in my accounts and decided to open the first CD at 3.3% with a $100.

Hopefully, I will continue the pattern for the next 5 months, until I have 6 CD's. Then I will add to the maturing CD's any more income that is earned, as the re-up.

Each CD will send it's earnings monthly to my Annual Bills Savings at ING. This way, the extra money is still helping (a bit) to pay these bills as they come in. This first CD will be about a Quarter of interest.

• After all 6 are up (at current rates) - $1.50
• Increasing each CD at Re-up by another $100 - $0.50 a month it should earn.
• After a year - interest transfer would be $3.00 a month.

As I shared on my other blog - I think this is a good way to create residual income from money that wasn't in the budget and extra. Leaving me some lingering feelings of warm and fuzzy, from the extra flows.

Plus, putting me a couple steps closer to a 6 Month Emergency Fund.