Savings are the backbone of any well-balanced portfolio. Savings are there in case of emergencies and also for the purchasing of high ticket items. I love having multiple “normal” savings accounts, each loaded with $40-$60. These are for micro-emergencies or in case I over-invest for a month.
High Yield Savings accounts (HYSA) are another thing altogether. A high yield savings account is part of your investment portfolio. It is the backbone of the portfolio. It is the money that you have the easiest and fastest access too.
For instance, if I had a car emergency for $1000, I would go through all of my options. If I knew I had renters in place and that rent money was going to be invested, I would probably use my credit card to pay off the car emergency. Then upon rent payment, I would pay off the card.
However, if I did not have renters in place, or my credit card had some other charges on there, I would use my high yield savings account. My Discover HYSA is tied to a cashback debit card. All I have to do is transfer from my HYSA to the checking account. Then I can use my debit card. So within 3 minutes, I have access to my money. It is a great feeling to have this kind of freedom.
Opening an HYSA is the first step to financial freedom. While earning 1% on your money doesn’t sound that exciting, when the stock market takes a dive, it sure does feel good to know your money is still safe and growing.
Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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