Ep 2: How Much Cash Should You Keep on Hand?
Investing PlanningOn This Episode
Of course, we all want a healthy bank account. Having a good amount of dollars within easy grasp is helpful in the case of emergencies or for medium-sized purchases where you don’t want to have to liquidate assets. But is it counterproductive to have too much cash on hand? We’ll explore that idea and other pressing questions about the role that cash plays in financial and retirement planning.
Takeaways
Cash is king. The saying exists for a reason. We all love having cash on hand and a bank account that gives us security.
But when is having cash a problem for your retirement plan?
Quite simply, there will likely come a day where you’ve saved enough in your account that it’s now time to make that money work a little harder for you. Those interest rates you’re earning online or at your local bank aren’t keeping up with inflation, and that means you’re losing spending power every year.
Now, as a Certified Financial Planner, Mark recommends that his clients keep 3-6 months of expenses in an emergency fund that can cover you should a major life event happen. Beyond that, it’s time to start looking at your investment options, and that’s what we like to do with the people we work with in Tucson.
On this episode of the Saving with Silverman podcast, we’ll bring that conversation to the show and talk about the good and bad that comes with having cash. There are times where you want to keep that cash on hand beyond an emergency fund, but we wan to make sure you aren’t being too conservative in your planning. Even if you don’t want to worry about the volatility of the market, there are other efficient options available and we’ll discuss that as well.
Check out the show and find out if you need to make any adjustments to your cash.
It’s important that you maintain the right amount of cash, and that’s something that we help our clients with on a daily basis, but making sure that if you have extra money in there that the money is growing and staying ahead of inflation. -Mark Silverman, CFP®
The Layout
Let’s get rolling with the first episode and you can use the timestamps below to skip around to specific topics.
1:22 – How much cash do we generally recommend people keep on hand?
3:07 – How do you come up with total for an emergency fund?
4:23 – Why do people typically end up keeping too much money in cash?
5:28 – Here are ways you can invest more efficiently without taking on all the risk of the market.
7:18 – What we talk about with clients during that introductory 20 minute meeting.
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