In my blogs I’ve talked about charge accounts, checking accounts and savings accounts but one of the things I haven’t talked about is actual cash. Cash is good and it’s wise to know just home much you should have quickly accessible to you.
The answer to the question, ‘’How much cash should I keep on hand? ‘’ is ‘It depends on such things as personal circumstances, income, and goals.’
One recommendation is to have an emergency fund covering three to six months of living expenses. Some sources suggest retirees having enough cash to cover one to two years of living expense.
General Guidelines …
Emergency Fund: A good starting point is to save at least $1,000 for emergencies and then work toward a fund that can cover three to six months of expenses.
Long-Term Financial Goals: For individuals saving for retirement, it's recommended to have a cash reserve of one to two years of living expenses.
Individual Circumstances: Single-income families may need to save more, as a job loss could significantly impact household income.
Age and Income …
By age 30, it's recommended to have saved the equivalent of your annual salary.
By age 40, aim for three times your income.
By age 50, 6 times your income.
Things to Consider …
Income Stability: If you have a stable income stream, you may need less cash on hand.
Dependents: The more dependents you have, the more cash you'll likely need for an emergency fund.
Debt: If you have high-interest debt, it's crucial to prioritize paying it off, which may require a larger cash reserve.
Investment Goals: Consider how much cash you need to cover expenses while your investments grow.
Cold Hard Cash …
Another question to consider is how much actual cold hard cash should you have in your wallet or purse?
Again, it depends. It depends on what you are carrying cash for. If you ordered something and it is coming COD, then you will need to have more cash to pay for that package. If you just want to have cash for emergencies probably $100 or $200 would be enough.
An emergency stash is another spot to have several hundred dollars, up to $1,000. If there is a shut down—and electronics and technology are out of whack … it happens … you need moneys available for groceries, gas, you name it. Keep it in tens and twenties—bills that can be easily cashed. Where do you keep it? Good question … it’s your private stash. Where will you remember it … and where will others in your home most likely not think of it as a hiding place for money?
No matter what your age is … you want to start building a cash fund along with your other financial goals.
You need money. At times, lots of it. And others, just the bare funds to cover the necessities of food, utilities, rent, or a mortgage payment.
You need money to pay for the essentials of living. What are they for you?
To get money, the great majority of people do it by working. If you are self-employed or own a business, it comes from what is “left over” after you pay your expenses for your work. If you work for someone, you get a paycheck.
No matter how you get money, you need a portal to keep it in: a bank, a credit union, savings account—something that has insurance behind each account. Commercial banks are covered by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per account. A credit union account is covered by the National Credit Union Share Insurance Fund (NCUSIF) with $250,000 for each account.
Banks and credit unions have a number of services, including:
• Checking accounts
• Saving accounts
• Certificate of Deposit accounts
• Credit and Debit cards
• Auto loans
• A way to deposit money and pay bills by check or online
• Auto loans, personal loans, home loans, mortgage refinance, and HELOCs
• Loans for business, school, and other consumer needs
• Online bill payment
• CDs, money orders, and safe deposit boxes
• Financial coaching
• Investment services
• Insurance
• ATMs
There is a difference between banks and credit unions. Many large banks have a nationwide system where most credit unions are within the region.
Credit unions are financial institutions owned by their members. They are designed to make money; rather to help the community they reside in. Credit unions often offer competitive or higher interest rates on checking and savings accounts.
Banks are profit centers. Some are private and more community oriented; others are publicly owned via stock. Many pay dividends to the shareholders, usually based on the profitability of the bank’s holding company. They can be a challenge to getting to a decision maker.
In making a decision to where you place your money—convenience, location, hours, and services offered should be on your decision list. And of course, what your personal needs are. It’s always a good idea to ask those you trust who they would recommend.
Patricia Lane Williams, CPA has worked with thousands of men and women sounding the warnings. She is the author of the Amazon bestseller, Money: Get It. Save It. Grow It … Before Debt Steals It.
Her website is www.PatWilliamsAuthor.com.
You need money. At times, lots of it. And others, just the bare funds to cover the necessities of food, utilities, rent, or a mortgage payment.
You need money to pay for the essentials of living. What are they for you?
To get money, the great majority of people do it by working. If you are self-employed or own a business, it comes from what is “left over” after you pay your expenses for your work. If you work for someone, you get a paycheck.
No matter how you get money, you need a portal to keep it in: a bank, a credit union, savings account—something that has insurance behind each account. Commercial banks are covered by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per account. A credit union account is covered by the National Credit Union Share Insurance Fund (NCUSIF) with $250,000 for each account.
Banks and credit unions have a number of services, including:
• Checking accounts
• Saving accounts
• Certificate of Deposit accounts
• Credit and Debit cards
• Auto loans
• A way to deposit money and pay bills by check or online
• Auto loans, personal loans, home loans, mortgage refinance, and HELOCs
• Loans for business, school, and other consumer needs
• Online bill payment
• CDs, money orders, and safe deposit boxes
• Financial coaching
• Investment services
• Insurance
• ATMs
There is a difference between banks and credit unions. Many large banks have a nationwide system where most credit unions are within the region.
Credit unions are financial institutions owned by their members. They are designed to make money; rather to help the community they reside in. Credit unions often offer competitive or higher interest rates on checking and savings accounts.
Banks are profit centers. Some are private and more community oriented; others are publicly owned via stock. Many pay dividends to the shareholders, usually based on the profitability of the bank’s holding company. They can be a challenge to getting to a decision maker.
In making a decision to where you place your money—convenience, location, hours, and services offered should be on your decision list. And of course, what your personal needs are. It’s always a good idea to ask those you trust who they would recommend.
Patricia Lane Williams, CPA has worked with thousands of men and women sounding the warnings. She is the author of the Amazon bestseller, Money: Get It. Save It. Grow It … Before Debt Steals It.
Her website is www.PatWilliamsAuthor.com.
Did you know that using a credit card can lead to spending more money than you can imagine … or even thought? You have discovered the ultimate money pit.
When you use a credit card and don’t pay off the balance each month you can easily triple the debt you started out with … did you know that … or realize it when you did the initial buy on time?
Here’s what happens … you will pay interest on interest on interest after each billing cycle … until you manage to pay the debt off—many times years later. If you look at a credit card statement, routinely, there is a tiny boxed notice that says: if you pay in one year, you full payment will be ____. If you pay over seven years, it will be ____.
Whatever the amount is, I promise you, it will be HUGE in comparison to what the original amount was!
If you buy on time, do you and your bank account a favor. Commit to one year max for payoff when using your credit cards. And stash the extra interest you would have been charges into a savings account—or redirect it to pay off another credit card.
Patricia Lane Williams, CPA has worked with thousands of men and women sounding the warnings. She is the author of the Amazon bestseller, Money: Get It. Save It. Grow It … Before Debt Steals It.
Her website is www.PatWilliamsAuthor.com.
I am sure you thought the political gimme season was over.
Not so.
Unfortunately, the gimme season is overlapping with the Yuletide giving season.
Not for profits (NFP) increase their requests for donations when it’s the giving season.
Whether it’s a political gimme or a not-for-profit do your own research.
If someone is after your money, they will have a website.
Where does the money come from—their donor base? This will be in the Notes section of the financial statements.
Where does the money go—what services is the promise that is stated to donors?
Compare the organization’s administration costs with what they really spend on the services they are supposed to provide. They shouldn’t be upside down … meaning that more goes to administrative related costs vs to actual service provided to their “cause.” Charity Navigator is a good resource.
Are there a lot of small accounts that could (and should) be in one account?
Take time to read the organization’s complete financial statements. Don’t stop with the balance sheet and the profit loss statement. Take time to read the notes to the financial statements.
You will be amazed at how much information is in a complete set of financial statements.
Patricia Lane Williams, CPA has worked with thousands of men and women sounding the warnings. She is the author of the Amazon bestseller, Money: Get It. Save It. Grow It … Before Debt Steals It. It’s her first book in the Four Corners Prosperity series. Her website is www.PatWilliamsAuthor.com.
