Put Your Lazy Money to Work

Why "Idle Cash" in Your Checking Account Is Costing You Money

Having a full checking account feels safe and organized, but excessive cash sitting in a non-interest-bearing account is actually a financial risk. When money sits idle, it’s not just resting—it’s losing value.

The Silent Thief: Inflation

Inflation is the reason $100 today won't buy as much as $100 did ten years ago. Even "normal" inflation (the Federal Reserve’s 2% target) punishes money that isn't earning interest.

The Math of Doing Nothing: If you kept $35,000 in a checking account in 2025 (when inflation was 2.7%), you effectively lost $945 in purchasing power in a single year. No fee appeared on your statement, but your money simply buys less.

Is Your Money "Lazy"?

"Lazy money" is the cash you don't need for immediate bills or a small safety buffer. While you work hard for your money, lazy money sits on the couch.

The Rule of Thumb: In my experience, my average client can keep enough for monthly expenses plus a $1,000–$5,000 buffer. Anything beyond that is "unemployed" and needs a job.

3 Steps to Put Your Cash to Work

You don’t need to take big risks to protect your money. It’s simply about assigning each dollar a role.

1. Calculate Your True Need: Most households only need $5,000 to $10,000 in checking—not $35,000. Identify your "excess" amount.

   
   

2. Find Better Homes: You don't always need a new bank. Ask your current institution about:

   • High-Yield Savings (HYSA): Earns more interest while staying fully liquid.

   • Money Market Accounts: A middle ground between checking and savings.

   • Short-Term CDs: 90-day CDs often pay higher rates if you don't need the cash immediately.

     
     

3. Review Often: Interest rates and your life goals change. A quick 10-minute review every quarter ensures your cash stays positioned for growth.

   
   

The Bottom Line

Cash should be ready when you need it, but it shouldn’t be idle when you don't. Small shifts in where you keep your excess cash can protect your hard-earned savings from being eroded by inflation.

Want help organizing your funds? Reach out to us.

This article is for informational purposes only and should not be considered financial advice. Please consult a financial professional regarding your specific situation.