Why Holding Too Much Cash Might Be Costing You

Let’s be honest—cash feels good. It’s simple, steady, and doesn’t bounce around like the stock market.

In uncertain times, it’s normal to want more of it. But here’s the catch: holding too much cash for too long can quietly cost you in the long run.

Let’s break it down.

1. Cash Loses Buying Power Over Time

You’ve probably noticed prices going up—groceries, gas, travel, even your favorite coffee.

That’s inflation. And if your cash isn’t earning more than the inflation rate, it’s losing value. Even with higher interest rates lately, most savings accounts still don’t keep up.

So while your account balance might look stable, the actual purchasing power of your cash savings is shrinking.

2. Cash Feels Safe, But It’s Not Always Smart

Cash doesn’t swing like the market, so it feels secure. But that sense of safety can hold you back, especially when it comes to building wealth or saving for retirement.

Holding too much cash might feel safe—but it’s like sitting on a bike with your feet on the ground. You won’t fall, but you’re not moving forward either.

3. Waiting to Invest Can Backfire

A lot of people say they’re “waiting for the right time to invest.” But timing the market is incredibly hard to do—consistently and successfully.

More often than not, people wait too long, miss the recovery, and end up buying back in when prices are already high. Staying on the sidelines can mean missing out on long-term growth.

How Much Cash Should You Keep?

Cash is essential, but how much should you have on hand? We recommend keeping 3-6 months' worth of living expenses in an emergency fund to give you a safety net for the unexpected. Beyond that, any extra cash might be better off working harder for you through investments, aligned with your goals and time horizon.

If you’re wondering if you’re holding the right amount of cash, feel free to reach out. We’re always happy to chat about how to make your money work harder for you.