If you just graduated and starting to work, you might find yourself accumulating too much cash in your checking account. This is a very good problem to have but where should you put it? It really depends on what you want to do with it later, if you have plans to buy a house, how much security you want, etc.
How’s it goin everybody does it beat the bush this video is made just for young college grads who just graduated college and maybe found a job and are starting to build up their savings you can imagine you may not have all that much cash at first so you keep most of it in a checking account who needs to put it in a savings account because you don’t have all that
Much to earn interest anyway first thing i would recommend to do anything over about one month’s worth of cash that you have in the checking account move it over into a savings this is because transfer between an online savings and the checking account is fairly fast around three to five days so most of your tax should be sitting on an online savings account that
Earns at least 1% apay or more there are various ones out there that are pretty good and they change all the time so you can’t just get one and pretend that it’s going to stay at a really good competitive rate all the time i personally use synchrony bank and also discover bank but there are better ones these days however if you wouldn’t necessarily switch between
All these all that much because you shouldn’t be keeping all that much savings cash in a savings account anyway so one one’s expenditure is in your checking account you need to put enough in your checking account to satisfy the minimum balance requirement in order to get that checking account for free some banks have no minimum but other banks may be like chase i
Think they have some minimum like $1500 bank of america also have some minimum like $1,500 so you got to watch out for their terms perhaps you need to keep $1,500 in there plus your one month expenditure when you have more than that all of that should be in a savings account now how much you should keep in a savings account really depends on your comfort level a
Majority of americans actually don’t even have a couple of hundred dollars to spare let alone maybe a month’s worth of expenditure if you have more than a month maybe you’re sitting at three months six months then that’s great however most finance people they would recommend six months i personally like to be pretty conservative i like to have a huge chunk in there
Just kind of know oh yeah you know if anything happens if i lose a job or anything i can have enough cash sitting in there that can support my spending i would prefer all of this in cash because when it’s in the invest account and if the stock market goes down then you would actually have to sell some of that low price stock in order to support your expenditure for
You know just living your life i think my comfort level is around 12 to 24 months of expenditure in cash now this might differ from person to person so you really have to ask yourself how much in cash do you want in your savings account that only earning one percent so now you got the checking and then you have a savings now where’d you put all that money if you
Have even more on top of that i’ve talked about investing in your own portfolio but this is somewhat an advanced topic and you need to probably study quite a bit before you dip your toes into it if you’re a novice investor and you don’t want to deal with any of this you might just put all your money into like one of those new robo advisor things such as betterment
Or wealthfront those apps basically ask you a whole bunch of questions how aggressive you want to be how volatile you want things to be and they would assemble together for you a portfolio that consists of mainly low-cost eps for the privilege of doing this you’re going to charge you somewhere between a quarter percent to half a percent of fees now if you’re just
Starting off the dollar amount of the fee that you’re going to pay is going to be pretty low however when you have built up a sizable investment portfolio you’re going to see it grow more and more as you work you’re going to put more and more money in right then i would actually recommend to move your money over to one of the brokerage accounts try to get the free
Trade such as robin hood or get a bank of america merrill edge account if you have more than 100k of assets then you will also get free trades there then once you can do free trades in a brokerage account all you have to do is go back to betterment or wealthfront and look at the breakdown of what they chose for you based on your preferences you can go up by these
With the free trades and then you would get the exact composition as those apps that charge a fee except now you don’t have to pay the fee at all you got to know you do lose a little bit when you switch over to your own managed portfolio because in those rural advisors they do sophisticated things like tax loss harvesting however the dollar amount of these services
Is debatable if it’s worth it or not so i hope these tips help to young people along and avoid any kind of pitfalls don’t forget to give me a like on this video comment down below let me know if this if you’re interested in supporting a channel i have an audible link down in the video description below and if you’re interested in investing yourself in your own
Portfolio i’ve been recommending the investing book by benjamin graham you can do this audible get that book for free and if you don’t like the service you can cancel before the trial period end and you can still keep the audiobook and help out this channel i also have a patreon over here and don’t forget to subscribe thanks for watching
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New Grads Where to Put Your Cash | BeatTheBush By BeatTheBush