Cheddarblog

The Emergency fund has been a constant theme on the Cheddarblog.

Though the Swiss_Mouse took a hit at the end of the year due to Mrs. Swiss_Mouse’s medical issues, his Emergency fund is still at a full 4 months of living expenses.  He will get it back up to 6 months.

But once you are at 6 months, what do you do with the interest off of the Emergency fund?  Well the Swiss_Mouse can tell you EXACTLY what he is going to do and suggests you do something similar.

The Swiss_Mouse will let the interest sit in the Emergency Fund, but once a quarter he will skim off any excess money and apply it to any debt!  Currently he has only two indebted  items:  His House and His Van.  Thank God he pays cash for his cheese!

Right off the bat the money will go against the van.  It has the higher interest rate and quite frankly sucks down money.  ONCE the van is paid off, any payments will be put against the house (OH, the Swiss_Mouse hears you people who say “It’s your best tax deduction.”  Bull.  The Swiss_Mouse wants a 100% sure thing, a paid off house).

The Swiss_Mouse was all set to start making extra payments when Mrs. Swiss_Mouse took ill.  Luckily, he has a “windfall” coming in terms of company stock.  He will use it to replenish the Emergency fund.  Sweet paid off van and house.