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Tractor Talk Discussion Forum

How much cash in the bank ???

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Crazy Horse

01-03-2018 06:57:02




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The post below and the replies about being laid off and out of work gets a guy to thinking about how much readily available cash (or equivalent to cash) should a person have in the bank (or wherever you might have it)? I remember back when I was working before retirement, there were always some "recommendations" like to have 3 months or 6 months of your basic expenses readily accessible. And of course, the old "emergency fund" for things that you can't do without like big car/truck repairs, appliance purchases, etc. Internet searches show more reading on the subject than a person could get through (see one below) but it would be interesting to see what YT guys think on the topic. We're not asking for the amount you have stashed away but maybe what you think a person/family should have for time (say, in months) to get them through such situations. I would think that 6 months of basic living expenses would be a minimum, preferably more.

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Westga

01-04-2018 08:14:46




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 Re: How much cash in the bank ??? in reply to Crazy Horse, 01-03-2018 06:57:02  
In today's world I would be careful having a large stock pile of cash at home. You shoot an intruder the law can take it all. That's cash and your fine collection of guns. You'll have to prove were it all came from or you don't get it back.

Notice I said careful and not don't.



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mtny

01-03-2018 22:35:03




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 Re: How much cash in the bank ??? in reply to Crazy Horse, 01-03-2018 06:57:02  
I keep a few months in savings , completely liquid , then close to a year in investment account which is liquid after about a week or so . Always have a nice knot of cash in the safe too.



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Bruce from Can.

01-03-2018 18:29:57




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 Re: How much cash in the bank ??? in reply to Crazy Horse, 01-03-2018 06:57:02  
I keep very little cash in the bank, just makes nothing sitting there. I reinvest my money back into my business. And if I need some cash, I can sell some grain , or cattle, or hay. Or I invest in a Dairy processing Coop. We have good cash flow, and I have no fear of borrowing money if need be for capital investment on the farm. It is just business.



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Mark - IN.

01-03-2018 16:54:33




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 Re: How much cash in the bank ??? in reply to Crazy Horse, 01-03-2018 06:57:02  
During this past Holiday season I watched "It's A Wonderful Life". In one of the scenes there was a run on the bank where many, most of the town's folk wanted, demanded their money from Jimmy Stewart's "Bailey Brothers Building And Loan", but as Jimmy Stewart explained to the folks that their money wasn't really in his bank, but rather invested in people's homes and Martini's Bar. So my point is that no matter what my bank book says, according to Jimmy Stewart I really pretty much have squat in the bank. And as the movie would have it, if I ever do need really need to pull all of my money out, Mr. Potter will give me 50 cents on the dollar for what I need and then charge me $1.20 on every dollar to live in his potter's field.

Mark

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Traditional Farmer

01-04-2018 00:17:42




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 Re: How much cash in the bank ??? in reply to Mark - IN., 01-03-2018 16:54:33  
Exactly money in the bank is in reality an unsecured loan to the bank.The bank only has a tiny fraction of actual cash compared to deposits so in the case of a wide spread emergency those with money on deposit will get probably nothing as the banks will be closed including access to safe deposit boxes.And the FDIC insurance 'guaranteeing' deposits is a joke also
as they have only a tiny amount of cash reserves compared to the deposits they guarantee and the money on reserve is not in actual cash anyway.Its all fine until a whole lot of people need to have their money at one time then the system will collapse.

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Shaun Wallace

01-03-2018 16:17:52




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 Re: How much cash in the bank ??? in reply to Crazy Horse, 01-03-2018 06:57:02  
I had excess of 30,000.00 in 100.00 dollar bills for down payment house. Could not use because wanted to know where came from. Been told cannot pay for new vehicle in cash. So it sits in checking account. Have no check book only debit card that don't use. So still cannot use.



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Greg1959

01-03-2018 18:00:40




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 Re: How much cash in the bank ??? in reply to Shaun Wallace, 01-03-2018 16:17:52  
Now, I have a checking/savings account. I used a wire transfer from my bank to their bank for almost $90,000, no problem.

Called my bank and told them where to transfer the money and what account #....over and done with pretty quick. I drove it off the lot.



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Crazy Horse

01-03-2018 16:32:16




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 Re: How much cash in the bank ??? in reply to Shaun Wallace, 01-03-2018 16:17:52  
Shaun ....... Hmmmm, so where DID the 300 C-notes come from we're wondering? Maybe you sell "stuff" right? Why not tell them? Obviously if you are refusing to use a cheque or use your debit card, then you are refusing to access your money, so really to say you cannot use the money is not really true. You are choosing not to use it and to keep it safe in the bank. Just my humble financial opinion. Very interesting .....

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alinark

01-03-2018 23:36:04




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 Re: How much cash in the bank ??? in reply to Crazy Horse, 01-03-2018 16:32:16  
the first part of your handle is spot on , debit card i was being scammed by a fellow and i made a 700.00 purchase from him called up the debit card people told them to reverse payment back .
i waited just shy of 6 months on a order that was supposed to take 6 weeks the card people stated it would take 45 days to get my money back, sent the card back and use cash only now.

oh i think it is pretty ignorant you making insinuations about what Shaun is selling

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Crazy Horse

01-04-2018 07:34:26




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 Re: How much cash in the bank ??? in reply to alinark, 01-03-2018 23:36:04  
Alinark ...... I've always wanted to have my own personal adjudicator here on the YT site ....... seems you have taken on the role. Now for a Google search ......



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Bob in WY

01-03-2018 14:31:46




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 Re: How much cash in the bank ??? in reply to Crazy Horse, 01-03-2018 06:57:02  
My general rule of thumb is I want 50% of my yearly income in available cash which is split up with 75% of that split between two banks, the balance in my hand. On top of that I keep some precious metals around as an insurance policy, I usually keep that in gold eagles and silver eagles.

The only things I will borrow money for is a house to live in and a vehicle to get to work. Other than that, if I can't pay cash for it, I don't buy it.

I agree with Dave Ramsey on some things but not others. Where I disagree is with credit cards and FICO score. I travel quite a bit so credit cards help keep my from carrying so much cash, but the credit cards are paid in full every month. FICO scores affect more than a persons ability to borrow money. What you pay for insurance, among other things, is affected by your score.

And I am very lucky, my wife and I agree on how to handle finances.

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Ozlander

01-03-2018 14:16:52




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 Re: How much cash in the bank ??? in reply to Crazy Horse, 01-03-2018 06:57:02  
6 months?

I wouldn't want $20K in the bank drawing 1% interest.



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oldtanker

01-03-2018 10:56:24




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 Re: How much cash in the bank ??? in reply to Crazy Horse, 01-03-2018 06:57:02  
In the event of a bank collapse money in the bank isn't going to be available. And as we saw when both the farm crisis hit in the 80's and the housing bubble just a few short years ago land values can go down. Even gold is subject to market trends.
But to the OPs question? The US military told us 3 months pay in the bank. Then congress for most of my career kept us 3.5-13.5% behind the cost of living making it impossible to save 3 months pay! Also as we saw with the past recession, even with extended unemployment people were still out of work 2 plus years later. People were out of work for 8 to 9 years during the great depression. So it's subjective as to how much you should have to fall back on.
Rick

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Rusty6

01-03-2018 10:42:30




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 Re: How much cash in the bank ??? in reply to Crazy Horse, 01-03-2018 06:57:02  
How much cash should I have in the bank? Thats easy. All of it. Then when I need to buy something , I pay cash. Seen too many people living pay cheque to pay cheque and never getting ahead yet having all the toys.



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alinark

01-03-2018 23:45:14




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 Re: How much cash in the bank ??? in reply to Rusty6, 01-03-2018 10:42:30  
rusty the last job i worked before i retired those young boys worked every bit of overtime they could get they had to, between house payments.new truck.new boat,new motorcycle, wife pregnant,girlfriend pregnant,
the place lasted about 2 years after i left not much longer after the plant closed 1 fellow took himself out.....



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Ferd

01-03-2018 10:05:52




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 Re: How much cash in the bank ??? in reply to Crazy Horse, 01-03-2018 06:57:02  
For many years I served on the board of a privately owned food bank. We "served the working poor" - people that were unable to make ends meet for various reasons but were still working and not receiving any government assistance. Families needed to be recommended by others on the program to verify the need. We also charged $60.00 / month (I think the average family took home around $700.00 / month in food, clothes etc.). Without help, lots of these folks would have been out on the street or on government assistance.

So, it's difficult to do a budget and save enough to have six months to a year (better yet) in liquid funds. But, a lot of folks living on the streets in "progressive" west coast cities where housing is really expensive, are there because they had no backup funds and something went wrong (illness, layoff, etc.) Once on the street it's difficult to get two months rent down payment together, not to mention just day to day living conditions we take for granted like hygiene facilities, clothing and phone, to get back on their feet again.

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davpal

01-03-2018 10:02:52




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 Re: How much cash in the bank ??? in reply to Crazy Horse, 01-03-2018 06:57:02  
I guess my answer is you should have as much money in the bank as possible. Cash is always king. I never hear anybody complaining they have too much money. Most of the complaining is how much money people are lacking. My heat bill is high, my car insurance is high, car payment is high, groceries are expensive, medical bills are high,and so on and so on. All those things are not that big of a deal if you have MONEY to pay them. It always astonishes me how much material crap people buy and put themselves in a situation of having no spendable cash. Paycheck to paycheck is the american way.

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Eldon (WA)

01-03-2018 09:06:21




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 Re: How much cash in the bank ??? in reply to Crazy Horse, 01-03-2018 06:57:02  
You only need a stash to preserve wealth....if you don't have anything to lose the gubmint will take care of you....



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steve706

01-03-2018 08:02:51




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 Re: How much cash in the bank ??? in reply to Crazy Horse, 01-03-2018 06:57:02  
I used to keep a minimum of one years wages banked plus a separate amount for unforeseen issues like the well going bad. In hindsight I regret it because divorce made it all pointless.....



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cuby

01-03-2018 13:11:52




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 Re: How much cash in the bank ??? in reply to steve706, 01-03-2018 08:02:51  
I went through that d I v o r c e thing back in the '60s. We didn't have anything and she got less,but I got to keep the diamond ring.



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Used red mn

01-03-2018 09:54:33




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 Re: How much cash in the bank ??? in reply to steve706, 01-03-2018 08:02:51  
I was feeling poor and horrible until I saw Steve’s last sentence. Praying I never endured that.



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Dave H (MI)

01-03-2018 07:46:21




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 Re: How much cash in the bank ??? in reply to Crazy Horse, 01-03-2018 06:57:02  
Six months is not enough. Not even close. Most everything in our lives is cyclical. So there are always bad times ahead. Very few people in the world today have true security. One major medical, a lawsuit, disability...you better have more than six months. Every few years it seems we have a big downturn somewhere and people start trouping thru my office with tales of despair. Back in 2008 people were losing their jobs and their businesses at a rate I never thought I would see. Homes were being lost. I carried a lot of old friends on my books for years. Mostly because they did not follow advice. That advice was to only buy what you had cash for. Borrow money to buy your home, never borrow against your home for anything else. 15 year mortgage as soon as you can swing it, it is not that much more per month than a 30 and the term savings are crazy high. If you are self employed, have more than one source of income. If you work a job, have a back door in case you lose it. And don't delude yourself that the money in the bank belongs to you if you are carrying around a big credit card debt. The answer to your question if you are sitting across the desk from me? There is no such thing as too much money in the bank or brokerage account AND too little debt.

Dave H (MI CPA)...first free advice of the season! :)

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grizz02

01-03-2018 07:34:28




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 Re: How much cash in the bank ??? in reply to Crazy Horse, 01-03-2018 06:57:02  
Had a friend that passed away in 2010 he was 53 he was so tight with money he squeaked when he walked his net worth was around 4 million . does not do him much good now they don.t make luggage racks for hearses



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rrlund

01-03-2018 07:26:32




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 Re: How much cash in the bank ??? in reply to Crazy Horse, 01-03-2018 06:57:02  
Who knows. I sell some cattle,my bank account swells. If I have a lot of expenses before I sell anymore,it can get drained down there pretty low. As long as there are cattle standing out there and they're growing and not sick,they're money in the bank that I can look right at every day.



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Brent Zappe

01-03-2018 07:20:54




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 Re: How much cash in the bank ??? in reply to Crazy Horse, 01-03-2018 06:57:02  
This is a question that even I try to answer. If my dad was alive he could be yelling at me. Most people who lived threw the great depression would tell you that savings was the best way to have it. it is surprising to understand that the depression was brought up when banks had crashed with investing in to stocks but what we kids found out was that our parents had a lot of bank accounts in banks. Understanding that when Wall street crashes the F.D.I.C can not found the money in those banks. I told my dad that having some thing like houses, land, cars, and some money in bank. that this stuff could be sold and be used if I needed the money. I understand that maybe I might look like a stupid person but if you own some thing than it is worth some thing when some body wants it. I like to keep my options open I say. Let me just ask what would happen if the banks crash again. You had money in them but they did not have your money to pay your checks you wrote. What would you have to sell to pay bills and eat to live. Some thing to think about.

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VADAVE

01-03-2018 08:59:13




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 Re: How much cash in the bank ??? in reply to Brent Zappe, 01-03-2018 07:20:54  
If your counting on money in the bank to weather a depression like the '30s and the bank crashes it won't get it done. That's why those that lived then almost universally adopted the same attitude--a sock in the mattress for saving and not spending unless you had to.



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welding man

01-03-2018 08:49:58




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 Re: How much cash in the bank ??? in reply to Brent Zappe, 01-03-2018 07:20:54  
My dad grew up during the depression. He did not believe in banks. If he had money, he had it hidden somewhere. He cashed his Social security check the day he got it. When he passed away, I knew where part of it was hidden, my brother knew where more was hidden.We don't know to this day if we found it all. The only money he had in the bank was $500.00 in a checking account. He had never written a check on. He only had the account because the bank required it in order to get his other checks cashed.

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case e

01-03-2018 07:08:52




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 Re: How much cash in the bank ??? in reply to Crazy Horse, 01-03-2018 06:57:02  
You ever check out Dave Ramsey. I kinda like the guy, he is very common sense and he isnt trying to sell you a bunch of stuff. He is a firm budgeter and helps out alot of people if they will listen to him. He is death on debt accept for a home mortgage and not over a 15 year fixed. He is worth a look.



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dhermesc

01-03-2018 09:38:06




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 Re: How much cash in the bank ??? in reply to case e, 01-03-2018 07:08:52  
Dave Ramsey is OK for people that can't handle money. But his advice on "building wealth" is so out of touch with reality that he ticks me off. He basically claims every investment fund should be making 10% or more. But for some reason he keeps those funds a huge secret and has never let anyone know what he's invested in that makes 10% year in and year out. He's way to much into turning your cash over to the shysters that run the stock market.

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case e

01-03-2018 13:46:45




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 Re: How much cash in the bank ??? in reply to dhermesc, 01-03-2018 09:38:06  
think you need to listen more carefully......



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Steve@Advance

01-03-2018 08:07:37




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 Re: How much cash in the bank ??? in reply to case e, 01-03-2018 07:08:52  
I like Dave Ramsey's advise. Used to listen to him on the radio, haven't heard from him in a while.

My biggest problem is trying to reign in spending without creating havoc at home. Wife needs money for our necessities, but her and my ideas of necessities are way apart!

I have managed to not be in debt, not managed to sock away much in savings.

One thing I have done, that Dave and I agree on, tithe regularly!

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Fred Werring

01-03-2018 10:03:48




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 Re: How much cash in the bank ??? in reply to Steve@Advance, 01-03-2018 08:07:37  
"but her and my ideas of necessities are way apart!"

Hmmmmm, sounds familiar.

Wanna make her mad? Tell her that at a sale, your stuff (tractors, equipment, tools, etc) will bring close to what you paid for it, while hers (knick-knacks, cookware, kitchen appliances, etc) will be the stuff on a wagon the auctioneer spends hours on trying to get a dollar bid.

CAUTION!!!...Start that discussion at your own risk!!!

In all seriousness, if it makes her happy and we can afford it, I'm good with that. Usually

Fred

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cuby

01-03-2018 13:21:45




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 Re: How much cash in the bank ??? in reply to Fred Werring, 01-03-2018 10:03:48  
Fred,I hear you and you are comeing through loud and clear. Wife thinks that if we have it ,have to spend it. I am to damn conservative she says.



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dpendzic

01-03-2018 07:06:25




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 Re: How much cash in the bank ??? in reply to Crazy Horse, 01-03-2018 06:57:02  
I agree--6 months at a minimum



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