Question: I'm a retired Police Officer. I have gotten a post retirement job. With my pension I don't need the money to pay bills and I have been putting in a savings account. I would like to know if there is a better place to put my extra money where I can still get it in case of emergencies and other unexpected expenses. Glen, Anita, IA

Answer: You should think about a money market mutual fund. For instance, I put part of my monthly savings automatically into a conservatively run money market mutual fund. You'll make a shade more interest than in a bank savings account. And when the Federal Reserve starts hiking its benchmark interest rate, you'll participate in that higher short-term yield. Typically, you can write several checks a year off the account, so it works for emergencies and large unexpected expenses.

Two cautions: First, invest in a large brand-name financial institution with the reputation and financial resources to support the money market fund if that becomes necessary during the ongoing credit crunch. Second, most firms offer different kinds of money market funds, with the most conservative option paying the lowest yield and the riskier flavors higher interest rates. Stay conservative. This isn't risk-money. You want it to be there when you need it. Don't reach for yield.