Don’t Overdo It

Don’t Overdo It

If you have a large amount of money in a savings account and your emergency fund is well stocked, that’s a good thing. Life is full of surprises, and the more padding you have to cushion your financial falls, the better. However, don’t let that savings account get too big.

When you keep too much money in your savings account, you’re missing out on a chance to see that cash truly grow. That’s done through investing. Sure, there are downsides to the stock market. For one, if you have most of your savings in investments, you can’t readily access them. Also, if you should need that money during a market downturn, you’ll likely end up staring at big losses. This is why your emergency fund should always be in a savings account. You’ll be able to access it and it won’t suffer from the fluctuations of the market. Yet once that emergency fund is packed with at least six months of living expenses, you should start investing the rest of your savings.

Consider the following example that USA Today laid out. Let’s say you keep $10,000 in a savings account with a 2 percent interest rate (among the best rates available). If you leave those savings alone for 10 years, you’ll have $12,190. Not bad. Until you realize that the stock market’s historical interest rate average is about nine percent. Accounting for downturns, let’s say you invest that $10,000 and get just a seven percent return over those same 10 years. At the end of the decade, instead of $12,190, you’d have $19,672. That’s much better. And a solid reminder to invest your savings once you have a solid foundation built.

Articles
New Techniques to Automate Your Savings
New Techniques to Automate Your Savings

It’s no secret that 401(k)s and other work-based retirement accounts are magical when it comes to saving money successfully? Why ...

Read More

Do Your Best with Benefits
Do Your Best with Benefits

When it comes time to claim your Social Security checks, we want you to get the largest sum possible. If you want that too, do yo...

Read More

Better Late Than Never
Better Late Than Never

If you’re in your 40s and have no nest egg to speak of, don’t panic. There are things that can be done. No matter what led to thi...

Read More

A Better Year
A Better Year

It’s almost the end of the year, and that means financial New Year resolutions are probably on your mind. Here are Americans top ...

Read More

Close Out 2019 With These Money Tips
Close Out 2019 With These Money Tips

Take a reflective look at your financial life from the last 12 months. Maybe you didn’t accomplish every last item on your financ...

Read More

Avoid and Excel
Avoid and Excel

Saving for retirement can be quite daunting, so it’s important to make it as easy as possible for yourself. One way to do that? B...

Read More

Small Security
Small Security

When it comes to income during retirement, you should think of Social Security payments as the icing on the cake, but not the ent...

Read More

Social Security Scare?
Social Security Scare?

According to a recent report from Nationwide, 59 percent of older workers are worried that Social Security will be unable to pay ...

Read More

How To Make the Most Out of Your Side Hustle Income
How To Make the Most Out of Your Side Hustle Income

What are you doing when you’re off the company clock? Exercising? We hope so. Spending time with friends? That, too. But have...

Read More

Website Terms of Service

Please read these "Website Terms of Service" carefully before using SavvyMoney Checkup ("site", "website"). Accessing this site, or making this site available to any third party, indicates that you have read and accept these terms.

  1. Materials. Materials in this site are copyrighted and all rights are reserved. Text, graphics, databases, HTML code, and other intellectual property are protected by US and International Copyright Laws, and may not be copied, reprinted, published, reengineered, translated, hosted, or otherwise distributed by any means without explicit permission.
  2. Links to Third-Party Sites. Linked, third-party sites from website are not under the control of the Licensor. The Licensor is not responsible for the contents of any linked site or any link contained in a linked site, or any changes or updates to such sites.
  3. Confidentiality of Codes, Passwords and Information. Licensee agrees to treat as strictly private and confidential any username, password, user ID, and all information to which you have access through password-protected areas of website.
  4. Maintenance. Licensor shall provide Licensee any new, corrected or enhanced version of the site as it becomes available. Such enhancement shall include all modifications to the site which increase the speed, efficiency or ease of use of the site, or add additional capabilities or functionality to the site, but shall not include any substantially new or rewritten version of the site.
  5. Limitation of Liability. Licensor shall not be responsible for, and shall not pay, any amount of incidental, consequential, or other indirect damages, whether based on lost revenue or otherwise, regardless of whether Licensor was advised of the possibility of such losses in advance. In no event shall Licensor's liability exceed the amount of license fees paid by Licensee, regardless of whether Licensee's claim is based on contract, tort, strict liability, product liability or otherwise.