My husband likes to play it safe. He was adamant about an emergency fund that equals five months of living expenses. I think that’s just too much. Yesterday he had a look at his savings account and he was shocked to see the amount of interest he receives on his hard-earned euros. Is interest THAT low??? (It’s at 1.8% right now). Yes, honey, it is. And we’re paying 3.6% interest on the interest-only part of our mortgage…and inflation is roughly 2%…so yes….your savings are worth less and less every day. Wanna throw a bunch of it into that interest-only mortgage, sweetie??
Don’t think I’ll get my husband to do just that. It’s a good thing we are opposites, ying and yang that’s us.
All I’m thinking is: if we would throw half of that emergency fund into the mortgage we would own 27.37% of our home…instead of the 24.51% score right now.
Besides that, index investing has become a much better option than saving.