Saving
In the early years the amount saved does more work than the rate earned
Returns act on a balance, so when the balance is small the return is small too — which puts the…
· 3 min read
Saving
Emergency funds, goals and the accounts that hold them.
Saving
An emergency fund is insurance you underwrite yourself
The purpose of a cash buffer is not growth but the conversion of an unpredictable shock into a survivable one, and that purpose is what determines its size.
Saving
A savings goal without a date attached is not yet arithmetic
Adding a deadline to a target converts a vague intention into a monthly figure, and that figure is what…
· 3 min read
Saving
Inflation is the reason cash needs a job description
A cash balance does not change, but what it buys does, so the useful question is not how much it earns but…
· 4 min read
Saving
Access and return are two separate questions about the same money
How quickly money can be reached and what it earns are traded against each other, which is why one pot…
· 3 min read
Saving
A household absorbs an income shock in a fairly predictable order
When money stops arriving, the sequence in which a household reaches for each option is largely determined…
· 4 min read
Saving
Automating a transfer changes when the decision happens, not how hard it is
A scheduled transfer works because it moves the choice to a moment when nothing is being given up, and then…
· 3 min read
Saving
A predictable irregular cost is a monthly cost that has not been divided yet
Bills that arrive once or twice a year are not unexpected, and treating them as monthly amounts held aside…
· 3 min read
Saving
The proportion saved works on both halves of the sum at once
Saving a share of income rather than a fixed amount does two things simultaneously: it builds the balance…
· 3 min read
Saving
A balance says very little until it is set against what is owed
The figure in a savings account is one side of a household’s position, and reading it on its own can make…
· 3 min read
Saving
An irregular income is budgeted from the bad months, not the average one
When earnings arrive unevenly, the household that plans around the mean spends the good months and then…
· 4 min read
Saving
A rate that reverts is really two rates with a date between them
Introductory pricing on a savings account is a real return for a limited period followed by whatever the…
· 4 min read