How much in cash savings vs. investments?

[Deleted]

What minimum do you like to have in cash savings vs. investments (i.e, brokerage account)?

We were keeping 6 months expenses in cash but it seems like a lot and I can't decide how to reallocate it.

[oreos]

I like to keep $10,000 in cash in a savings account that I can withdraw from next day, the rest is in fund investments.

[v]

I like to have a minimum of $15k and a maximum of $30k in cash (unless we have something big that we're about to pay for, like a trip -- in that case I'll keep extra in cash). Anything above that gets invested.

Note: $15k stays in our Capital One, so it isn't instantly accessible, and isn't used for cash flow.

ETA: I should also say that this is the average minimum Iike to have. Actual amounts vary greatly depending on the time of month -- did we just pay the rent? Did one of us just get paid? If we have only $5k in our Citi (everyday cash flow) accounts but rent and credit cards were just paid, that's fine. If they haven't been paid yet, not okay.

The Capital One cash is overkill to me unless we're about to pay for something big (and even then, too much for big things we pay for), but my husband wants that money there and that's not a fight I need to win.

[rosiedozie]

I would say that 6 is too much.

We have only about 2-3 months in cash savings - the rest is invested. Our cash savings is more than enough to cover us the time it would take to cash out the rest of our funds if needed.

[Poppy]

Well, I dislike the idea of having to sell our stocks at a certain time. So for us, we do enough in "high-yield" savings to basically replace one of our cars and replace our roof in a short time ($25k). Arbitrary? Yes. Haha.

Other pertinent info - we could live indefinitely off of either salary and we don't have a kid yet, although I am pg and as of now I do not see us increasing our liquid savings when the baby comes. We'll see. We do typically have a ~2-10k buffer in checking as well, depending on the day of the month and time since I made a transfer to investment accts.

[Deleted]

We keep a little too much in cash...but it helps us SWAN (sleep well at night). Being in the workforce through some big stock market swings has me a little spooked, trying to get better at that, but overall we are ok with where we are.

We have over 1 year of basic living expenses in cash.

[laurao]

We've got about 20k in savings that we can access immediately- 10k in an efund, then 10k in spend to save (car expenses, house expenses, travel, Christmas).

[Pom]

We keep $20k-$30k in cash. Too much., tbh. Old habit from when Mr. Pom's pay checks fluctuated with field hours, per diems and monthly bonuses.

[Deleted]

We keep almost nothing in cash, just a 'float'.

[cosmos]

We have over 40k in cash bc we are starting renos and the contractor doesn't take CC.

Everything else is invested. Normally we don't keep more than 10k in cash.

[kaylie]

I don't like to keep more than 10K in cash.

[gt7301b]

Usually around $10K in cash, but seeing as Mr. GT only gets paid 10 months of the year it fluctuates by month.

[CrazyLucky]

We have about $20k in next day accessible cash. We also have about $30k in four CDs that renew one each quarter, so we are never more than three months from a cash infusion if we need it.

[aurora]

I think $10-15k or ~3 months (whichever is less) in cash makes sense, with the rest invested at varying levels of risk. If your entire portfolio is 6 months of expenses, then the other 3 months could be largely in "safer" investments. If you have another 24 months, then you can tolerate a higher risk portfolio, as long as you still have some diversification.

Our actual cash amounts have varied a lot in the past 3 years due to changing job situations and buying a new home. At one point we had well over a year in cash because a huge portion of that was a downpayment on a house plus a new car. We've erred on the high side as DH got his company up and running (he was earning a reasonable amount, but we never knew exactly when clients would pay so it was irregular), but we're starting to decrease that now that he's had a very regular paycheck for a while.

[monsterz]

I try to keep between $10-15K in cash everything else in invested. Right now we are a little below that as we had to dip into it to replace our A/C, but by mid September it will be at a comfortable level once again.

[imojoebunny]

We have 6 months expenses in cash, but would prefer to have three months.  We are just not all that on the ball. We have a variety of investments, so could pull from different ones, if it was not a good time to sell a specific one.

[SJ]

$10Kish

[sillygoosegirl]

10% or 6 months expenses + anything we definitely want to be able to spend in the next few years (like our house down payment before we bought), whichever is bigger. At this point, 10% is bigger, and I don't really see that changing.

[h]

We keep quite a bit of cash -- usually ~$25k in our BodA savings account, plus $50k in a Vanguard money market. The former gets used for big expenses as they arise, and money comes and goes out of it pretty frequently. The latter is our e-fund and never gets touched. We have to write size able checks somewhat regularly between school tuition, quarterly tax payments, and home renovations, and I don't want to be pulling money out of the market every time we do that. Plus my income is unpredictable, so we need a cushion. We haven't been able to come up with a better system, so we just keep more cash laying around than we probably should.

[Deleted]

@songforyou....I know....we both "know" we are missing out but it just makes us feel so safe to have that money in cash. I could go down to 6 months, but H wanted 2 years....so we are at 12 months. I tell you, when there was a big round of layoffs in 08, it felt awesome to know we would be fine for a year if the cuts happened.

Keeping too much in cash, paying off my mortgage early vs investing more, and shoes are my three biggest MM fails. I think I may be able to get H down to 9 months if the market doesn't tank by the end of the year. Ihave been working the suggestion into my State of the Union presentations each quarter

[my3bears]

I would never want to sell stocks at a loss to pay for something. However, I am also self-employed so do not have reliable income. We also have a SFH, 3 pets, and health issues. We keep 10k in checking, 20k in capitalone360, and have another 20k in bonds that returned 4.5% this year. All told it could cover 8 months of bare bones expenses, which is Suze Ormon's recommendation. I recognize my "special snowflake-ness" on this issue.

[jewel]

We have too much in cash. But, we have a couple of rental properties, and it makes me feel better to have the cash on hand, should we suddenly lose out on a significant amount of rent, and/or need it for big repairs. What keeps me confident in the market is that it's a long-term investment. The thought of having to sell at a possible loss is too stressful, especially considering whatever emergency we might be dealing with at the time to need to do so.

[M]

@shoegal - You're not the only one. We have about 12 months in a money market account. Our income fluctuates so much that it helps us sleep at night. I don't think it's a big deal to have that much in cash as long as you have a much larger amount in investments/retirement.

[daisypaloma]

Aug 28, 2014 11:52:15 GMT -5 laurao said:

We've got about 20k in savings that we can access immediately- 10k in an efund, then 10k in spend to save (car expenses, house expenses, travel, Christmas).

This, almost word for word.

We have $9K/2 months in eFund.  Even this seems too much for our current lifestyle/needs.

We also have save to spend goals such as annual X'mas and travel funds, some minor home reno costs and tax dues.  This is about another $11K that should be exhausted in a few months. 

[scout8]

We have way too much. We could live for a couple of years off of our cash. I know it is ridiculous and I am trying to move more of it into investments. I would never feel comfortable with less than a year as we are both self employed with inconsistent income. We also own two buildings, one with 2 units and one with 3. I need a good amount of money in cash to SWAN, but we currently have too much.

[shaynaatl]

We've had way too much in cash since we got married. DH wanted it like that. Now I've convinced him and we are aggressively investing in taxable accounts and paying off low interest student loan.

[Deleted]

Thanks for asking this, OP. I was curious what others did as well.

If I can ask a follow-up question ... how do you know how much cash you should have on hand? I saw a few people mention a three-month standard but then say you really shouldn't have more than $10-15,000. If you live in a HCOL area with kids, chances are that $10k wouldn't go very far. So do you keep more cash if your monthly expenses are higher?

[cilantro]

10-15k in Capital One savings max. All of the rest in Vanguard funds.

[raangoli]

Too much. We just did our State of the Union. We know it's a problem and we're working on it.

[crashgizmo]

I'm like @shoegal. We keep way too much in cash. Right now we have about 35-40K. We are planning to make a large purchase (boat) in about 18 months, but that's really no excuse. I think I just want to keep it there for my peace of mind. DH is always telling me to do something else with it, but I think we're both lazy.