Where is the best place to put my cash savings?

Q. I was lucky and was able to save well. I’m maxing out my 401(k) and doing an IRA, and I’ve accumulated $55,000 in cash. It’s just sitting in a money market. Should I do anything else with the money?

— Saver

A. Congratulations on being such a good saver.

Deciding how best to proceed with excess cash will depend on your specific goals.

If, for example, you have important short-term financial goals – in the next three to five years – such as buying a house, a car, or a home improvement project for which you might need of some or all of that excess money, you should keep the money in cash, said Marnie Hards, certified financial planner at Aznar Financial Advisors in Morris Plains.

“You can keep the funds in a money market like you did or in a high yield savings account,” she said. “It would be interesting to compare the returns of the two options given the amount of money involved.”

Some online banks offer yields between 0.60% and 0.85%, so if this is better than your money market yield, it may be worth moving the money to a higher yielding vehicle, she said, noting that you should factor in any fees or expense ratios charged on silver, as this can significantly reduce your return.

In addition to setting aside money to cover any major financial purchases, you should also try to keep a minimum of 3 to 6 months of cash living expenses, she said.

“It can be frustrating having your money in cash and earning next to nothing, but it will give you great peace of mind and control over your life if you have some kind of financial emergency,” he said. she stated.

Another thing to consider is the flexibility that excess money gives you if you want or need to quit your job, she said.

“Having extra cash on hand would mean you wouldn’t have to immediately jump into another job just to pay your rent or mortgage and instead would have the freedom to take a month or two to make the best decision. for you,” she mentioned.

Send your questions to [email protected].

Karin Price Mueller writes the Bamboos column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. To find NJMoneyHelp on Facebook. Register for NJMoneyHelp.comit is weekly e-newsletter.