Is it really possible to have too much cash in savings? Sounds like a good problem to have, right? As a reminder, the core tenet of personal finance is to spend less than you earn. Period. The next piece of the puzzle is to save or invest the difference between those two numbers. But just how much should you put aside in cash? It depends.

Saving and investing are two very different things, each dictated by the amount of time between now and when you expect to need the money. If you are setting money aside for a purchase in the next few years, you need to be certain that the money is there for you. As such, keeping it in cash, or at least in very low-risk investments, is the right move. Investing in the stock market carries inherently more risk, but this is the place for your money if you don’t anticipate needing it for at least 10 years from now. …

Last year, I read the book Fortune’s Children: The Fall of the House of Vanderbilt, and I was struck by how many members of the Vanderbilt family died at an early age from either a stroke or heart attack. In my younger days, I assumed that wealthy people could live as long as they wanted, aided by the most advanced healthcare money could buy, so I found these early deaths to be ironic for a family that had amassed more money than the world had ever seen up to that point.

We’re told that only two things in life are guaranteed: death and taxes. If the events of the past two months are any indication, now, more than ever, we should really know that nothing is guaranteed. Our health, our jobs, may be more fragile than we ever realized. Like me, you may have thought that if you had health or wealth (or both) that you were nearly invincible. Unfortunately, our beliefs are being exposed. …

As I was lying in bed this morning, I couldn’t decide whether to stay there just a little bit longer or go ahead and start the day. Since the shelter-in-place order went into effect, each day has begun with this conundrum. If I can catch just a little more sleep, I have less time to try and fill between the moment I wake up and when I return to the comfort of my bed.

It’s a conundrum because I can’t decide which will afford more sanity. Lying in bed can get really boring, really quickly. But is it any worse than trying to come up with another day’s worth of activities? I think we’ve now established, however many weeks we are into this coronavirus, that humans weren’t built for this. We are, after all, social creatures, right? I definitely believe that, but quarantine is also proving that we need our own private space of peace and quiet to try and keep it all together. …

When I discuss personal finance with individuals or groups, goals are one of the first topics we cover. Why? Understanding your own personal goals helps you direct your spending and saving so that you’re moving closer to them, not continuing to kick the proverbial can down the road. During one such session with a group last year, one of the participants told me that her long-term goal is “to build generational wealth.” I’d read plenty about this idea before, but this was the first time I’d heard someone say it during one of my workshops.

The topic of what should happen with our money when we die is one of the most personal, and polarizing, in the realm of personal finance. Although the possibilities for distributing one’s remaining wealth are endless, the most discussed options usually fall into one of two camps: we either pass it on to our children, or we spend our last nickel on the day we die. …

COVID-19. Coronavirus. Global pandemic. Whatever you want to call it, the magnitude of our current situation is hard to fathom. I hope it never happens again, but if we’ve learned anything from this it’s that, even on a planet as large as ours, billions of people are still so very connected; anything is possible. In times like these, however, there’s always a silver lining — if we just allow ourselves to see it.

Disclaimer: I do not have my head in the sand, and I realize the severity of this pandemic for millions of people around the world. Justifiably, there is fear, uncertainty, and stress surrounding many individuals, and I don’t want to underestimate these challenges by pretending it’s all rainbows and unicorns. This is, however, an attempt to find some positive aspects to what we’re experiencing. …

I’m generally a fan of Dave Ramsey and his clear steps for helping people get out of debt and get started on the path to financial freedom. Among his many popular quotes, the one below serves as a great reminder to all of us when it comes to the way we handle our hard-earned money.

“A budget is telling your money where to go instead of wondering where it went.”

I don’t necessarily like budgets, per se, but Ramsey’s point is a good one and is worth a closer look. I, like many other people, find budgets to be restrictive. To me, a budget feels like the financial equivalent of a diet. Even the word itself sounds like punishment. When we feel too restrained, whether relating to spending our money or cutting back our eating, the intended restriction generally backfires, potentially leaving us worse off than before we started. …

This week, I’d like to take you back to that Economics or Finance class you may have taken in high school or college. The topic at hand is what is referred to as a “sunk cost.” In layman’s terms, a sunk cost is a past expenditure that is history, like a ship on the ocean floor — sunk, gone, never to be recovered. The textbooks tell us that, in business, sunk costs should never be factored into current or future spending decisions. …

How could the insight of an 18th-century French philosopher possibly impact your buying decisions today? The term “Diderot effect” was coined by an anthropologist named Grant McCracken but, to truly understand its significance, we must first begin with an essay. Denis Diderot, a French philosopher that lived in the 1700s, penned an essay entitled “Regrets on Parting with My Old Dressing Gown.” It tells a tale of dissatisfaction that resulted from a new gown he received as a gift.

The story goes that, not long after receiving his new dressing gown, Diderot came to feel that his surroundings did not properly reflect the elegance of the gown. As such, he replaced the furnishings in his study to better suit his new article of clothing. He replaced tapestries, his desk, the chairs, and bookshelves. Only after these furnishings were in place did he realize that his new, updated study was less comfortable than what he’d had before. It’s hard to know how much, if any, debt Diderot incurred during the remodel of his study, but I have to think that may have played into his lament. …