The Rachel Cruze Show - Can You Have Too Much Money in the Bank? (My Answer May Shock You)

Starting point is 00:00:05 When you see the title of this episode, you probably assume that the answer is, well, of course not. You know, you always want more money in the bank. Wrong. So stick around to find out why, and be sure to like, subscribe, and share this episode with a friend. So listen, there are some important financial milestones that you want to have very much so. But the idea of just having endless money sitting in any random account is not a great strategy. So here are three questions to ask yourself. It's really important to get specific with your money.

Starting point is 00:00:31 Number one. What does it mean to have enough money in the bank? if you are paying off debt, a thousand dollars is the emergency fund that you need. So that's it, which doesn't seem like a lot, you know, because it's not, I mean, in today's world, like it's kind of scary to live with just $1,000. But listen, when you are paying off debt, you are throwing everything at it. I mean, you are, don't cash out retirement, but if you have investment savings, I mean, all this stuff, okay, all these like accounts, you cash it all in and you pay off your debt.

Starting point is 00:01:00 And then once you're debt free, then you bump up that $1,000 emergency fund to three to six months of expenses. And at that point, you can move on to investing in your kids' college and all of it. But there's something really powerful to say, yeah, if you have tons and tons of money and your checking account or a savings account and you have a lot of debt, it shouldn't be the case. Again, simplify and pay off your debt. Now, one of the easiest ways to look into your future and to say, gosh, I need something to help me besides just an emergency fund, delete me is there to help you protect your personal info online. So you may not realize it, but scammer. and spammers are constantly buying and selling your data online.

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Starting point is 00:02:00 now it is time to get your finances in order. And Fairwin's credit union is there to help you do this the right way. Their smart checking is a simple and straightforward plan that keeps you on track. And their smart savings celebrates good habits. When you know that your money is working for you, it's easy to stay motivated. And listen, don't get me started on the beware debit card that comes with the account. So great. I love it so much. So having banking tools that align with your values matters. So go to fairwins.org slash Ramsey to check it all out. Trust me, you will not regret it. All right, the second question you should ask is, should I keep all of my money in the bank or somewhere else?

Starting point is 00:02:37 So obviously a lot of your income each month is moving in and out of your checking account because it's paying for monthly expenses. Now, if you have savings, like the emergency fund we talked about, then I would put it in a high yield savings account. So you have a traditional savings account, a checking account. Those are going to earn you nothing. At least a high yield savings can earn you three to four percent, you know, depending on what credit union or bank that you're using. but it is sitting there. And again, you're not trying to make a lot of money off of this, so you don't want to go and invest it in the market.

Starting point is 00:03:08 It's more like insurance than an investment. But the idea is that that emergency fund is sitting somewhere that you can get too quickly, but it's not just sitting in your checking account or a traditional savings account, making nothing, and that you have like really easy access to. Because if it's sitting in a checking account, you're probably going to end up spending it.

Starting point is 00:03:24 So putting those in a high-yield savings account, your emergency fund is so key. Then once you do all of that, you want to be investing 15% of your income into retirement. So obviously when you are investing, that's not going to just be sitting in a bank account. You're going to open up a 401k or a 403B where you work if they offer that and a Roth IRA. Now, once you open these accounts, you put money in, but then the money in those accounts actually then has to be invested. And that's a mistake some people make is they open the account, put money in, and it just sits there because they never

Starting point is 00:03:55 actually did the investing. So you can sit down with a smart vester pro and do that because, you know, having someone in your corner that's helping you when you're looking at investing is really key. But that is where that money should go for your future. You should be investing that. The third question you should ask is, what should I do with the money in my checking account? Well, that money is going to be there again for your monthly expenses. So what I would do is make a plan for your money, which is a monthly budget. Now, I personally love Ramsey's budgeting app every dollar. You used it for years. It's amazing. And now it actually looks over your entire financial picture, not just your budget. But what's great, too, is it connects to your checking account. So every time

Starting point is 00:04:33 you swipe your debit card or use money out of that account, a transaction comes into the app and you can track it and put it in, is it clothes or food or electricity, you know, if it's bills, whatever it is, you can put it in the category in your budget so you can know how much you have left in each category throughout the month to spend so that you are spending on a plan. Now, getting your bank account under control is one thing, but it's the daily rhythms that really shape your wealth-building journey are so important. So be sure to check out my episode, financial habits, you're neglecting, costing you thousands. You can click right here to watch or I'll put a link down below. All right, you guys, remember to take control of your money and create a life you love.

The Rachel Cruze Show - Can You Have Too Much Money in the Bank? (My Answer May Shock You)

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