September 2024 Newsletter

SEPTEMBER 2024 NEWSLETTER

  How much money should I keep in cash?

Emergency Fund: It’s recommended to have three to six months' worth of living expenses in an emergency fund. This ensures that you have enough to cover unexpected expenses like medical bills, car repairs, or temporary loss of income. There is no right or wrong here, it’s what makes you comfortable. Me personally, I like having 9 months expenses in the bank.

Short-Term Goals: If you have short-term financial goals, such as buying a house, taking a vacation, or making a large purchase within the next year or two, it’s wise to keep that money in cash. Don’t let anyone tell you to invest money that you will need in the next few years. This way, you won't have to worry about market fluctuations affecting your ability to reach those goals.

Peace of Mind: Some people prefer to keep a little extra cash on hand simply for peace of mind. This isn't necessarily about financial logic, but rather about emotional comfort. A lot of us have cash on hand at our house and if you do, I highly recommend a fireproof safe.

So How Much Should You Keep in Cash?... The exact amount to keep in checking and savings will be different for everyone, but it’s always the sum of three things:

Money for Everyday Living Expenses. This is the cash you use to pay your bills and cover your everyday living expenses. It's important to have enough in your checking account to handle your monthly outflows without dipping into your savings or investments.

Your Emergency Fund. An emergency fund is crucial for financial stability. The exact amount you need will vary depending on your personal situation, but we typically recommend aiming for three, six, or nine-months’ worth of take-home pay. Having an emergency fund will alleviate a lot of stress.

On a personal note, it was an exciting and emotional end to August. Lexi started her senior year of high school and Nick started his freshman year at Bentley. Lexi is excited and is touring Babson and Bryant over the next few weeks. She also started volleyball, which will be her last year playing, so hopefully they can have a good year as a team. I am so excited to see what college she chooses. Nick loves Bentley. He is majoring in finance and is so excited about it, as one day he will be joining me in the family business. He loves his teammates and is doing great in practice. His pads and mask came out unbelievably awesome. It’s really cool to see the treatment of a Division 1 athlete. They really do get everything they could ever want. He’s worked so hard to get here and I am so proud of him.

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal.