Investment vs Savings

[jobofferae]

Assume max contributions to 401k, backdoor Roth, HSA, ESPP, etc.

For whatever is left over every month (take home income-expenses) and given that month-to-month expenses are variable, I am wondering if folks invest a set amount each month with the rest going into savings, making the amount going into savings variable. Or if you put a set amount into savings and have the investment amount be variable.

Once your emergency fund is fully funded, how do you balance whatever is left over at the end of the month for savings vs investments?

[Poppy]

Honestly not that formal about it, we just roll in a new lump sum sometime after we do our annual review or if our checking account balance gets high.

It would probably be better to automate, though, because that helps take the emotion and urge to try to market time out of the process.

[ohgillian]

Each month I adjust what’s going into savings based on that month’s expenses. This is a short- to medium- term savings account for large expenses like vacations, summer camp, annual property taxes, some large annual dues.

Twice a year I move $6k of that into our car fund.

Periodically, I take a look out over the next few years of the savings account and if there’s a clear surplus then I will move that to investments. (I have a spreadsheet for the savings with expenses estimated out the next 10ish years)

[winemaker06]

I waffle on this, it’s difficult! Lately have landed on having savings at a level I’m comfortable with for upcoming large expenses, which is mostly big home maintenance projects over next 1-2 years. And once I hit that number, everything else goes to investments. I do have a monthly investment minimum that I try to hit, but don’t really stress if life gets in the way since investing less isn’t as big a deal as pulling from savings.

[steamboat185]

We move the money when we hit 8-10k over what we need. Basically we buy in every 6-8 weeks and if we have an expense if we can we throw it on the credit card with the due date the furtherest out, which gives us time to change our next planned investment and push it out if needed.

[jwright]

I was keeping too much in cash and was hesitant to move to investments because I always thought we were at the top of the market so I started a monthly auto transfer to my investment account a couple of years ago. The plan is to periodically transfer more when the balance in checking/savings is high but I’m bad about that.

[protozoa]

Personally I put a relatively small set amount each month into savings until we get back to a certain level, and the rest into investments.

[orval]

We auto transfer a set amount to investments every month. We usually let savings build up and use it about once a year for a large home expense like new gutters, a/c, landscaping project etc.