I recently got divorced and sold a house. I’m living in a rental for $1000 a month. I have a two year old son and $600 a month in child support from his father.
My expenses are minimal and truthfully I want to save. I’m not working right now.
What should I do with the 95k? It’s currently in a HYSA but I feel like I should do more. I have no debt.
Posted by AdSuper7845
8 Comments
Do you have an income? If you’re not working, how are you paying your expenses, no matter how minimal they are? If you’re funding your lifestyle from your savings, the advice for what to do with your money is going to be different than if you have new money coming in.
Right now your biggest asset is stability. Keep enough of that 95k liquid so you can cover rent, childcare, and living expenses without stress. A year’s worth of expenses in cash is not too much when you are between jobs. With the rest, you can start a simple investment plan in a broad index fund. The mix between savings and investing can adjust once your work situation is clearer.
A HYSA is probably the best place for it at the moment. Perhaps a relatively short term CD special or short term bonds as an alternative.
Your life has changed significantly, and is likely to take many more turns in the next few years. Asset prices are very high and the talk/data around a recession grow stronger, putting money into the stock market on a short term basis (a few years) is very speculative.
Saving isn’t really an option while you are not working, have $1k a month in rent, and $600 in child support. Expenses will clearly outweigh income until you begin working again.
Until you find a job and have income then you need to keep it in the HYSA. Your very next step should be finding a job. That $95k will go quick.
Until you have a job you need to keep using it to pay bills. Keep it in HYSA
What is the return on the HYSA? You can probably squeeze a little more out of it if you move it to a money market fund like fidelity SPAXX which is at 3.97% and is as liquid as cash. I wouldn’t move any of it into equities or bonds or anything else as you don’t have a job and are using the money. Can reevaluate once you have a stable job.
Task numbers 1, 2 and 3 has to be get a job. You need a stable income going forward, especially with a young child.
I split up excess money so it’s earning more in multiple places. This way I can use some without it effecting the balance.