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Is your cash costing you money?

Updated: Feb 25, 2023

More than Cash: What to do with your money now that you're finally making some


If you are keeping your money in a regular checking or regular savings account, you are leaving money on the table.

Similarly, if you haven't started saving yet, you might be costing yourself money. But it's not too late.

Opportunity Cost

Money is something you need and use every day of your life, so it’s one of those things that’s good to figure out sooner rather than later. Otherwise, it could literally cost you.

You're working hard for your money, so why not make your money work for you, too?

Let's say you have a regular checking and savings account now and the interest rate is 0.01% - meaning the bank pays you 1/100th of a penny for every dollar you hold with them (so... generous...).

Contrast that to another type of savings account where you could be earning 3% - meaning 3 pennies for every dollar you keep in the account. That seems more reasonable.

Here's a quick comparison:

If you put $10,000 in a regular savings account that pays you 0.01% interest, after five years you will have $10,005.


If you put that $10,000 in a high-yield savings account that pays you 3% interest, after five years you will have $11,592.74.

We <3 free money.

Interest x time = $$$

Maybe you’ve heard people say, “It’s important to start saving early!” That’s true—but it’s equally true that it’s important to start investing early, because when it comes to investing, time is your most valuable asset. And I don’t just mean “more years of saving”; I mean the growth that comes over time thanks to compounding interest and stock market gains when you invest your money.

Said another way, you miss out on a lot of opportunity by delaying savings, as this chart shows:

$1 could grow to much more by retirement—but it depends what age you contribute it

This hypothetical illustration assumes an annual 4% return after inflation. Figures are in today's dollars. The illustration doesn't represent any particular investment.

© The Vanguard Group, Inc., used with permission from Vanguard.

What can you do right now?

In less than half a day, you can get your money sorted. Read More Than Cash (90 mins) and then set yourself up with some of the accounts and investments discussed in the book.

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