Question

If you already have 6 months worth of salary in your emergency fund, do you keep putting money into it indefinitely? Do you stop and start saving for other things? We have two young kids (3 and 2) and one on the way. I’d like to start saving money for their college expenses next, but I’m unsure if I should put everything only into a college fund or split it and keep adding to our emergency fund too.  

Answer 1

Depending on what your plans are for maternity leave, I would either save for that or switch to college funds/retirement.  

Comments

@schubert I’m a SAHM so we aren’t losing any income when the baby is born thankfully. Actually the baby won’t really come with any expenses until he/she is older because I’ve saved everything from my first two, breastfeed, and my 3 year old just potty trained so we are very familiar with the cost of two in diapers. Also my husband has a portion of his check taken for retirement each check. So that all being said, would you throw everything into college?  

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@bercy10 I would add some into a retirement plan for yourself as well as college for the kiddos.  

Answer 2

I would think kid’s college saving/savings fund and throwing more towards retirement. I have a dollar amount I want saved for each child by the time they turn 18. Or maybe if you do have enough you can put away, maybe consider investing.  

Answer 3

If you have more, starts investing.  

Comments

@nauru agree

Answer 4

Start saving for college! Six months worth is a fantastic emergency fund amount, you only need that to cover unexpected expenses or a period of no income so it doesn’t need to be an unlimited amount! I would keep it as it is now, in a high interest account and start setting up your kids’ college fund xx

Answer 5

Next question lol: how much should a general college fund goal be per child? $50k?  

Answer 6

Whatever feels comfortable for you! But as a late starter . i would say start those college savings now. Make sure you have sinking funds for all you can think of!  

Answer 7

Totally what makes you feel comfortable BUT I’ve always agreed with Clark Howard (Atlanta guy) that says put your money after emergency fund into retirement . kids can get college paid for or can pay for it but you can’t fund retirement but for a time and you don’t want to be reliant on grown kids in your later years because of no retirement . so focus on your future beyond kids.