I decided I needed a new savings goal. I mean cash, cold hard cash.

I already contribute the allowable amount to both my wife and I’s Roth IRA, and we both get the full matching contribution to our employers retirement plans. The problem is, that money is slated to be used in 30 years or more.

Some people call this an emergency fund. I already have one of those too.

I’m looking for a non-committed cash reserve. Something that will make me a solid 4-5% return in an Emigrant Direct account, and that will provide some completely passive “luxury” money, or “Mad Money” as my wife calls it.

So how much do I want? Ideally, I’d like to have an extra couple hundred bucks a month that I can not feel guilty about spending. As such, I’d need about $50,000 in an online savings account making 4.5% or so to return that figure monthly. So that’s the goal.

$50,000 in cash in the Emigrant Direct account that will just sit there. It will generate about $200 per month passively, that I won’t feel guilty about spending.

So there you have it. There it is. In the right hand column is the measure of how close I am to this goal. I figure it might take me another year or so to get there from my current $19,000 mark, but I think it will be worth it.

Anyone else have a “Mad Money” fund?

Banking, Goals, Saving emergency fund, Mad Money, slush fund