I get where you're coming from—having cash just sitting there can feel like missed opportunity. But here's how I see it:
- Padding isn't about maximizing returns, it's about risk management. Property taxes can fluctuate, especially if your local assessments jump unexpectedly (been there, done that... not fun).
- If tying up cash bugs you, maybe consider a more flexible approach? I've had decent luck parking my padding in a high-yield savings account or short-term CDs. Sure, it's not huge returns, but at least it's doing something.
- Another angle: instead of padding heavily upfront, you could set aside smaller amounts monthly. Less anxiety about large sums sitting idle, and you still build a cushion gradually.
- Ultimately, it's about balancing peace of mind with financial efficiency. If the anxiety just shifts rather than disappears, maybe tweak your strategy slightly rather than ditching it altogether.
Just my two cents—hope it helps!
I've been doing something similar, but lately I've wondered if anyone's tried using a HELOC as a backup cushion instead of cash savings... seems flexible, but maybe riskier if rates spike? Curious if anyone's gone that route.
"seems flexible, but maybe riskier if rates spike?"
Yeah, that's exactly what held me back from going the HELOC route. I refinanced a couple years ago when rates were super low, and now I'm kinda wary about messing with anything adjustable. Anyone here actually had to tap into their HELOC during a rate hike? Curious how stressful that got...
Yeah, been there myself. Had a HELOC open during the last rate hike cycle—honestly, wasn't fun watching those payments creep up. It's manageable if you're disciplined, but definitely adds a layer of stress you don't get with fixed-rate options.
I hear you—had a similar experience myself a few years back. Watching those payments inch upward every month definitely tested my patience. But you're right, discipline helps...and remember, these cycles do pass eventually. Hang in there.
