Ask the grumpies: When you say to keep a windfall in cash, what exactly is “cash”?

bethh asks:

What do you mean when you talk about keeping a windfall in cash? Literally under the mattress? In a savings account? Would a CD count? How about a money market fund?

The short answer is any of those, except not under the mattress (Don’t give people are reason to break into your house!).

Essentially the idea is you put money in a safe place where it’s not going to lose value, or at least not lose the complete equivalent to inflation each year (many checking/savings accounts will pay less than inflation, but not *that* much less than inflation).  When we’re talking about a windfall, we mean parking it someplace where it won’t lose much value while you decide what to do with it.  Someplace pretty accessible and FDIC insured so it doesn’t lose value if an institution goes out of business.  “Cash” basically means a safe place for your money where you can get at it.  You won’t be making a huge amount, if anything, on this money, but it’ll be safe.

So, yes savings accounts, FDIC insured money market funds, and so on.

With a CD you have to be careful about when you can access the money, so if it is a lot, you might either only use a short-term CD for when you know you’ll have made a decision about where to put the money (say, 6 months out after a family death, for example).  Alternatively, you can build a CD ladder, which means having multiple CDs that come due at varying intervals so that if you need, say, 10K, there will be a CD of that amount maturing soon at any point in time.

Posted in Uncategorized. Tags: . 9 Comments »

9 Responses to “Ask the grumpies: When you say to keep a windfall in cash, what exactly is “cash”?”

  1. omdg Says:

    We used CDs several years ago, but were warned IN NO UNCERTAIN TERMS that there would be a penalty if we withdrew too early. Well, it turned out the penalty was something like $30 for a $10000 CD, so not a particularly big deal to pay. Maybe rates differ? I just wanted to share that experience in case the prospect of paying a penalty deters people from using a CD, when the penalty may not be that large in the end.

  2. K Says:

    Unrelated
    But where do I ask an ask the grumpies question?

    My job is full of awful people but today I very clearly heard my director making a racist comment about one of his employees. I still cannot believe it was said and it clearly is an inside joke with the two managers he was on a zoom meeting with(he was virtual, they were in an office a couple doors down from me). And they clearly did not know I was in the office based on their attitudes when later on they encountered me.

    I have always had a target on my back in this office for being smart and asking good questions.
    If I complain they will know who reported. I cannot live with myself if I don’t do something about what I heard.
    Anon in mass

    • nicoleandmaggie Says:

      That sounds terrible and it’s a terrible position to be in. You will have to decide whether to report or not, but in either case, you should be looking for work at a different company if you can’t trust upper management to take care of racist managers if brought to their attention. Similarly for being punished for being smart and asking good questions.

      Racist managers make employees less productive.

      I’ll throw this up to grumpy nation next week, but you may have decided by then.

      • K Says:

        Thank you!
        I appreciate the conversations here. Not because I am looking for people who necessarily think exactly like me but because the community is intelligent, thoughtful and REAL things are talked about…..all sorts of things.

        And yeh racists suck.
        What was “weird “ too was this same “joke” was made years ago by someone in the small town I grew up in, I was out with my daughter one night who was maybe 4 at the time and a dude thought it was funny or some shit to say this same thing about another black child in the area, who was also out that night.
        F*cking sucks

      • nicoleandmaggie Says:

        Ugh. Racists suck so much.

  3. revanche @ a gai shan life Says:

    Definitely not keeping cash in hand physically but we do a variety of these things. Cash in savings accounts, CDs, some in money market accounts waiting for me to quit dragging my feet already and invest it in something.

  4. mnitabach Says:

    CD rates & inflation are so low right now it seems barely worth the minimal effort to move money out of non-interest-bearing checking accounts. Obvs, if & when interest rates and/or inflation rise, this is calculation charges.


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