In Wacky Credit Gyrations Yield Some Easy Money, recently posted to WSJ.com, the author Brett Arends reports the spread between the rate you can earn on tax-exempt money market funds (which aren’t Federally taxable) and regular taxable money market fund (which is taxable) has shrunk.
Although this is caused by weird and extremely complicated market phenomena, you don’t need to understand the “Why” to benefit. In fact, Arends tells us in a refreshing moment of simplicity:
Bottom line: If you’re paying federal taxes at all, a regular taxable money-market account makes no sense at all at the moment.”
Want to live Beyond Paycheck to Paycheck?
Simply finish reading this post, call or visit the web site of your custodian and make the switch. Tell them to invest your available cash in their tax exempt money fund instead of the default taxable money market fund.
While I was able to confirm the relative rate advantage at my broker’s web site, I could only make the change over the phone . As a result, it took me a whopping 10 minutes to increase my effective rate by 0.5%! (And several more to tell you about it.)
Please note: don’t make this switch in your IRA or other retirement account. The income in those accounts isn’t taxable to begin with, so making it tax exempt won’t help you!
How long did it take you to make the switch?
“personal finance” 
“financial education”
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