How much cash do you need?
Getting caught in a situation in which you are stranded because you have no immediate access to cash can be very embarrassing. It is for fear of such a situation that people tend to keep a significant portion of their income in bank accounts, sacrificing returns that could have been earned if the funds were invested. In this post we will discuss some of the ways one can arrive at the optimal amount to keep in cash and the amount to keep invested.
The first thing you can do in knowing how much cash to keep is to track expenses for about three months with a free savings app such as Wallet, Bluecoins or a simple spreadsheet. This will give you an idea of your average expenditure per month and serve as a guide to how much cash you can keep on you.
Another tip is to make investing the first item on your expense list when you get paid. This not only reduces the possibility of missing out on returns but it is also a general tool for improving your savings overall.
Finally, you should keep an emergency fund in liquid investments i.e. investments which can be converted to cash relatively easily. This way you can have your money generate returns for you without being inaccessible when you are facing an emergency.
If you want to try some investment products that will give you the best balance between returns and accessibility, you should talk to us at IC today. With a call to +233 (0) 30 825 0051, you will be guided by a professional on the best options available to you.
Thank you for reading.