I think we all have a little cash stashed away for any kind of emergency or disaster where we need things immediately. But at what point is it too much and it's better to put most of it in a HYSA?
How much is too much to keep in cash?
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Last: 26 days ago by YouBet
Do you mean actual physical cash? Or money sitting in a checking account?
I think of physical cash as really just for short-term infrastructure issues. Something like power outages, payment system glitches, hurricanes. For that, somewhere between $500 and $2,000 covers most realistic scenarios. Enough for gas/food/whatever for a few days.
Beyond that, you're just giving up 3.5-4% that you could be earning in an HYSA.
I think of physical cash as really just for short-term infrastructure issues. Something like power outages, payment system glitches, hurricanes. For that, somewhere between $500 and $2,000 covers most realistic scenarios. Enough for gas/food/whatever for a few days.
Beyond that, you're just giving up 3.5-4% that you could be earning in an HYSA.
Why is the cash you have not already in a HYSA?
Granted, high yield isn't what it used to but you should still be able to get 3-4% with something like a Capital One performance savings account. It's pretty easy to move money from that account to my checking (Zelle for small amounts and bank transfers when I exceed the Zelle limits).
FWIW, I average $30-$40k in mine. Prob on the high side, but it's nice to have the buffer, especially when property taxes and insurance come due at the first of the year.
Granted, high yield isn't what it used to but you should still be able to get 3-4% with something like a Capital One performance savings account. It's pretty easy to move money from that account to my checking (Zelle for small amounts and bank transfers when I exceed the Zelle limits).
FWIW, I average $30-$40k in mine. Prob on the high side, but it's nice to have the buffer, especially when property taxes and insurance come due at the first of the year.
I have been keeping $350k cash in a HYSA. Getting like 3.3%, and Chat GPT chastised me for keeping that much in cash when I was using it to do some analytics on my portfolio. Last week I moved $200k to my Schwab account to put into index funds next time there is a dip. I will move another $50k over soon. I feel like $100k is the right number for me, but others might think that's too much. Probably depends on your net worth to some extent.
As far as actual money in a checking account, I keep about $15k-$20k. Basically enough to pay off the credit card every month and also cover $5k-$10k expense if needed.
As far as actual money in a checking account, I keep about $15k-$20k. Basically enough to pay off the credit card every month and also cover $5k-$10k expense if needed.
It's probably an evolving number depending on what's going on in your life.
For me, I'd like to keep $50-100k in a HYSA for emergencies or job loss. We are actually sitting on about $275k in a HYSA at the moment, but that's also because we just bought and sold houses a few months ago, and planning a kitchen remodel in the not-too-distant future. I'm also keeping about $100k on the sidelines to refinance if rates ever come back down...need this Iranian conflict to end for some relief there (we bought our new home a few days before selling our old home, so wanting to stick some of that equity from the sale into the new home).
For me, I'd like to keep $50-100k in a HYSA for emergencies or job loss. We are actually sitting on about $275k in a HYSA at the moment, but that's also because we just bought and sold houses a few months ago, and planning a kitchen remodel in the not-too-distant future. I'm also keeping about $100k on the sidelines to refinance if rates ever come back down...need this Iranian conflict to end for some relief there (we bought our new home a few days before selling our old home, so wanting to stick some of that equity from the sale into the new home).
For many years, I was much more conservative and kept more like $75-$100k in savings. It was a safety net that, frankly, I did not need and that was costing me money.
When I got serious about fast-tracking my retirement savings, I moved most of it to a Fidelity investment account. That's how I landed at $30-$40k.
Since I made that change, I've never at any given time needed more than about $10k out of my HYSE. And there is pretty much nothing that I can't put on a credit card, which gives me 30 days to move other investments around, if that were to ever be necessary. So far it hasn't.
I often have a checking account balance at or near zero. My paycheck goes there, so I pay regularly occurring bills out of those bimonthly deposits.
When I got serious about fast-tracking my retirement savings, I moved most of it to a Fidelity investment account. That's how I landed at $30-$40k.
Since I made that change, I've never at any given time needed more than about $10k out of my HYSE. And there is pretty much nothing that I can't put on a credit card, which gives me 30 days to move other investments around, if that were to ever be necessary. So far it hasn't.
I often have a checking account balance at or near zero. My paycheck goes there, so I pay regularly occurring bills out of those bimonthly deposits.
Yeah, my checking account fluctuates around $10k depending on when our paychecks hit vs our auto drafts for mortgage, 529 and other payments.
txaggie_08 said:
It's probably an evolving number depending on what's going on in your life.
For me, I'd like to keep $50-100k in a HYSA for emergencies or job loss. We are actually sitting on about $275k in a HYSA at the moment, but that's also because we just bought and sold houses a few months ago, and planning a kitchen remodel in the not-too-distant future. I'm also keeping about $100k on the sidelines to refinance if rates ever come back down...need this Iranian conflict to end for some relief there (we bought our new home a few days before selling our old home, so wanting to stick some of that equity from the sale into the new home).
why would you need that much to refinance?
I like to keep at least a 6-month emergency fund in cash. This is usually spread out among various savings and investment accounts. 1-month of this emergency fund stays in quick and easily accesible accounts such as checking and HYSA. That 1-month is based on a bad timing event. i.e. Property taxes and all insurance deductibles needed the same month.
I want to pay down the mortgage more. Like I mentioned, we sold our old home a few days after closing on our new one. It was fine, we had plenty of cash to put down 25%, but I'd still like to refinance to get the principal down and a better rate.
Money you keep routinely in a HYSA is still part of your financial portfolio, just a conservative safe investment.
25K - 50K in checking/savings accounts. In a true emergency, I'll just liquidate stocks. Things might be different if my wife or I worked in volatile jobs or if only one of us worked.
Diggity said:txaggie_08 said:
It's probably an evolving number depending on what's going on in your life.
For me, I'd like to keep $50-100k in a HYSA for emergencies or job loss. We are actually sitting on about $275k in a HYSA at the moment, but that's also because we just bought and sold houses a few months ago, and planning a kitchen remodel in the not-too-distant future. I'm also keeping about $100k on the sidelines to refinance if rates ever come back down...need this Iranian conflict to end for some relief there (we bought our new home a few days before selling our old home, so wanting to stick some of that equity from the sale into the new home).
why would you need that much to refinance?
That's what I wondered too, at first. But since he bought a house before selling the previous one, I think what he's saying is that upon refinancing he would put more money down now because he didn't have that cash at the original closing.
For any actual cash you need in-house, it's a calculation of what interest you are missing out on annually combined with the risk factor (fire, theft, etc...). That's a personal decision -- do you think if things got hairy (disaster) that an extra $5k could get you through it? $10k?
If you're talking just available cash not "invested", not physical bills - nothing should be in anything that's not earning at least 3%. Plenty of HYSA's that your basic checking can overdraft from automatically. If you have an amount of money that you routinely keep that account at, it's part of your conservative portfolio allocation (eg. if you're investment structure is 70% aggressive, 30% conservative then that HYSA amount is part of that 30%).
If you're talking just available cash not "invested", not physical bills - nothing should be in anything that's not earning at least 3%. Plenty of HYSA's that your basic checking can overdraft from automatically. If you have an amount of money that you routinely keep that account at, it's part of your conservative portfolio allocation (eg. if you're investment structure is 70% aggressive, 30% conservative then that HYSA amount is part of that 30%).
AggieInHouston said:
Do you mean actual physical cash? Or money sitting in a checking account?
The former.
aTm2004 said:AggieInHouston said:
Do you mean actual physical cash? Or money sitting in a checking account?
The former.
Well in that case I guess you can disregard every post in this thread. I keep about $1,500 in a pistol safe by my bed.
TXTransplant said:
Why is the cash you have not already in a HYSA?
Granted, high yield isn't what it used to but you should still be able to get 3-4% with something like a Capital One performance savings account. It's pretty easy to move money from that account to my checking (Zelle for small amounts and bank transfers when I exceed the Zelle limits).
FWIW, I average $30-$40k in mine. Prob on the high side, but it's nice to have the buffer, especially when property taxes and insurance come due at the first of the year.
I do have my savings in a HYSA (AE), but this is money held outside of that. I'm talking just physical cash on hand for emergencies that may happen. Think when Beryl hit and we were without power for a week.
Like physical cash? I typically have 0.
aTm2004 said:AggieInHouston said:
Do you mean actual physical cash? Or money sitting in a checking account?
The former.
If you're talking dollar bills, I think I have $20 in my laptop bag. Everything else is in some financial institution.
AozorAg said:aTm2004 said:AggieInHouston said:
Do you mean actual physical cash? Or money sitting in a checking account?
The former.
Well in that case I guess you can disregard every post in this thread. I keep about $1,500 in a pistol safe by my bed.
Yeah. My thing has always been to have a mortgage payment in cash set aside in my safe.
We sold some kid things over the weekend and I went to put that cash into the stash and decided to count it, and I had way more there than I thought, so I've been thinking should I take everything beyond a mortgage payment and just put it into my savings. Just trying to see what others think...
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You maybe able to "recast" the note which just means you tell your servicer that you are going to make a large payment before you make it and they will reamortize at the new lower loan amount so your payment goes down.
I say maybe able to because if you have a non conventional loan it would matter if your loan program allowed but does not hurt to ask. Conventional loans are recastable. Of course your rate would not change but you can always still refi latter if tt makes sense to do so.
I say maybe able to because if you have a non conventional loan it would matter if your loan program allowed but does not hurt to ask. Conventional loans are recastable. Of course your rate would not change but you can always still refi latter if tt makes sense to do so.
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Yeah, recast is an option I've thought about and may end up doing it. When we bought the house rates were on a downward trend so I was hoping I'd be able to refinance in 6 months to a year. This war looks like it threw that off so may be worthwhile to recast in the meantime.
It's currently a jumbo loan, but the recast would get me below that threshold.
It's currently a jumbo loan, but the recast would get me below that threshold.
But you don't have to wait for rate drops to pre pay your mortgage.
It's a better use of the excess cash now than if/when you get a lower rate.
It's a better use of the excess cash now than if/when you get a lower rate.
Yes, that is true, but if there's fees associated with a recast and fees associated with a refinance, it would be best to do all at one time if the market cooperates. From what I've seen, my Lender charges $250 to recast. While that's peanuts in the grand scheme of things, my thought was why pay that if I was also going to most likely pay a couple grand to refinance. Might as well just do it all at one time.
South Platte said:aTm2004 said:AggieInHouston said:
Do you mean actual physical cash? Or money sitting in a checking account?
The former.
If you're talking dollar bills, I think I have $20 in my laptop bag. Everything else is in some financial institution.
I might have 200 laying around total in physical cash, glad I am not the only one. I keep $15K in a money market and call it good. If I needed more I just liquidate some holdings.
Is the goal to lower your monthly payment or to save on interest? There's no fee to prepay your mortgage.
Either way, you can do the math, but deploying ~$100K towards principal will save you a lot more than the recast fee will cost you.
Either way, you can do the math, but deploying ~$100K towards principal will save you a lot more than the recast fee will cost you.
My wife probably has a $1,000 laying around in a sock drawer. She usually holds onto any cash she receives for Christmas/birthdays. I usually carry $0, or less than $100. If I have any more than that I take it to the bank and deposit it.
Diggity said:
Is the goal to lower your monthly payment or to save on interest?
I'd like to reduce the monthly payment as well. That's why I'm looking at refinancing or a recast. Sure, I could just prepay the mortgage at no cost and lower the payoff period and interest paid, but it wouldn't have the affect of lowering my monthly bill without a recast.
Some of you talk a real big game on TexAgs, but the lack of 'go bags' has been very revealing.
The way I understand it, any "cash" loses value to inflation. So even if you want to have an emergency fund, it should be in a high yeild savings account. If you're worried about the world falling apart and want a physical inventory, get gold.
aTm2004 said:TXTransplant said:
Why is the cash you have not already in a HYSA?
Granted, high yield isn't what it used to but you should still be able to get 3-4% with something like a Capital One performance savings account. It's pretty easy to move money from that account to my checking (Zelle for small amounts and bank transfers when I exceed the Zelle limits).
FWIW, I average $30-$40k in mine. Prob on the high side, but it's nice to have the buffer, especially when property taxes and insurance come due at the first of the year.
I do have my savings in a HYSA (AE), but this is money held outside of that. I'm talking just physical cash on hand for emergencies that may happen. Think when Beryl hit and we were without power for a week.
Oops...we had a whole discussion not realizing that's what you meant. I honestly can't remember the last time I had more than $200 cash in my possession. I don't trust myself with more than that.
I have about $2.83 in my truck console.
lol. This thread just made me realize I forgot where I stashed $500. I keep $1k in cash in the house in case of a short term emergency where you can't access digital money. I got cute and put it in two locations to "diversify" risk against theft. I remember one but not the other.
Edit: I remember now... it's in the gun safe. How could I forget that?
Edit: I remember now... it's in the gun safe. How could I forget that?
Here you go... 4.40% HYSA at Pibank
https://www.pibank.com/
I keep more than I should in there, and a few negatives with pibank: you can only access via an app (no website access). Not good for moving money in and out, but it is what it is, one of the highest APYs out there.
https://www.pibank.com/
I keep more than I should in there, and a few negatives with pibank: you can only access via an app (no website access). Not good for moving money in and out, but it is what it is, one of the highest APYs out there.
I keep $250k and continue to flow any surplus into it throughout the year. I'm already maxing out every investment vehicle there is so just keep extra in TMCXX. I did buy my wife a new car and paid cash so that knocked it down to the $207 range.
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