Financial Insights – 4 Effective Uses For Idle Cash

Dec 15, 2022

4 Effective Uses For Idle Cash

Are you guilty of sitting on idle cash from time to time with no idea what to do next? While this isn’t a bad problem to have, it’s certainly not the most effective use of your funds. In fact, you may actually be losing money as inflation nibbles away at record low savings rates. So, what is the best way to put those funds to work?

Here are four ways you can use that idle cash to further improve your financial standing.

1) Establish an Emergency Savings Account

The emergency fund is #1 on this list because of its paramount importance. If you don’t already have funds set aside for emergencies, then focus on parking some of your cash here first. A fully funded emergency reserve should be able to cover your family’s spending needs for 3-6 months. This will provide a financial safety net for when life deals you an unexpected blow.

Added Benefit: This cash cushion will not only benefit you financially but also emotionally. Peace of mind allows all of us to focus more on the truly important parts of life!

2) Pay Down Bad Debt

Most individuals probably understand that not all debt is created equal. For example, mortgage debt usually comes with a reasonable interest rate, has potential tax benefits and is used towards a purchase that will hopefully appreciate or maybe even generate income over time. On the other hand, bad debt (i.e., credit card debt, cash advance loans, auto loans, etc.) can drastically hinder your ability to save and grow your wealth. Consider trying to pay down any balances with an interest rate of 6% or higher.

3) Invest Some

After you’ve set aside funds for a rainy day and cleaned up some debt, it’s a good idea to put some of your money to work. If you’re not currently maximizing your retirement account contributions, now would be the time to boost those retirement savings. After that, individuals with school age children may want to consider adding some funds to an education savings account such as a 529 plan. Just be sure to speak with a certified financial planner (CFP) for more guidance on these types of investment vehicles.

Added Benefit: Although the benefits can vary, most qualified retirement plans and education savings plans offer significant tax advantages.

4) Make a Charitable Donation

Depending on the situation, you may have some left over cash after addressing each of the areas mentioned above. If this occurs you might choose to give some or all of the remaining money away. This can be done through charitable donations to various people or organizations such as your local church, philanthropic center, animal shelter, alma mater or orphanage. This is a great way for individuals to have a positive impact on something they’re passionate about and potentially lower their tax bill! Just be sure to consult with your CPA to learn more about claiming deductions for those charitable contributions.

If you have any questions or would like to discuss any of the information contained here in greater detail, please do not hesitate to contact us at 770-698-9816.


AJ, Ryan, Gary, Rhonda, and Tom

AJ Gilbert, CFP®
Ryan McCafferty, CFP® Gary Fortier, CPA Rhonda Gilbert, CPA Tom Savage, CPA


Keystone Financial Group, Inc. does not provide legal or tax advice

Indices mentioned are not managed and cannot be invested into directly. Past performance does not guarantee future results.

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