True Expenses and Investments?
The way I've been budgeting is that each month I put most of my income towards next month's expenses (so last month's paychecks are funding this month's regular expenses) and then anything extra is put towards savings.
I've completed a 6-month emergency fund, and now I've been working towards filling up the rest of my True Expenses categories (trying to have ~$1000-$2000 for each category).
However, I want to start investing outside of my IRA/401k since having my money sitting in a savings account earning very minimal interest seems to be a bad idea. I saw something online (famous last words, I know) recommending once you complete your emergency fund, everything extra should just go towards low-risk investments like ETFs or Index Funds.
I was prepared to transfer all of my True Expenses money to a brokerage account, but then I saw that YNAB doesn't include money in the Tracking Accounts in the budget. So, if I decided to invest that money, I wouldn't be able to allocate it towards my True Expense categories.
I guess my question to the rest of y'all is, how do you guys handle your True Expenses and investments?
I'd appreciate any advice. Thanks!
We're not able to give you specific advice on investing. One thing you'll want to consider, however, is how liquid you need the money funding your True Expenses to be and how much risk you want to take on.
Personally, I have a low appetite for risk and want liquidity. So, I invest TE money that won't be used for 24 months or more in I-bonds and keep the money for TEs that will come due within 12-24 months in a high-yield checking account or in my checking account.