Why You Should Not Save Money..
Saving money is generally a good thing. But is saving too much hurting your financial success?
Background
Generally, you should save enough money to fund your 3–6 months emergency fund. Importantly, that money should be sitting in a high yield savings account. You would be able to make $1,000 by having your emergency fund in such high yields account. Here is an article that I wrote about that transi:
Beyond the emergency fund, you should not be saving any extra money (unless it’s for house downpayment or other big future expenditures within the next 1–5 years). You should start investing the rest.
Why saving does not make sense beyond the emergency fund point
When you save money in a traditional savings account, the return on your money will not be able to keep up with inflation. This means that the purchasing power of your savings may decrease over time. So the $100 you have now, will not buy the same amount of items in the 5 years time frame.
