Should I keep my cash in cash?

Build up reserves properly

How much savings do I need for emergencies?

As a rule of thumb, you should build up a three-month net income as a reserve. Very important: families with children are much more likely to incur unplanned expenses than singles or couples. So put additional money aside for each child - the reserve should also be topped up with increasing age. If you have your own property, you should make provisions for repairs - and not pay this from your current income.

The sufficient reserve measured in this way makes it possible to finance major purchases and repairs quickly and without bureaucratic effort. A reserve of three months' salary also provides security in the event of illness or even the loss of a job: In any case, you will remain liquid until, for example, the unemployment benefit is approved and paid out.

How do I build up a reserve?

If you have no money on the high edge, only one thing helps: Save, save, save. The best way to do this is to save a fixed amount every month. Here, too, there are rules of thumb: five percent of the monthly net income and 30 percent of special payments, such as Christmas or vacation pay, should be diverted. Anyone who saves EUR 125 a month from a net income of EUR 2,500 in this way will have EUR 3,000 on the high edge after two years.

What to do with the savings?

Keeping cash at home is too dangerous - home insurance often refuses to reimburse you after a break-in or loss. This applies in the event of a fire, for example, because the sum is too high and not or not fully insured.

The old Savings book or a non-interest-bearing current account are the wrong choice from a return point of view, because interest is paid well below the inflation rate. Access to the savings account is also restricted.

Equity or real estate funds are also out of the question as a nest egg - too risky and awkward to handle. Important: Even conservative, "safe" pension funds can experience longer periods of loss. With the nest egg in particular, however, you may not have time to sit out such phases when you urgently need money. This also applies to money market funds - they are usually "loss-proof" and tradable on a daily basis, but the costs of buying and selling put a heavy strain on the return.

A must for the nest egg: security and availability

The ideal nest egg with high security, quick availability and a reasonable return is what is known as overnight money. The reserve in such a call money account is available at all times. Call money accounts are free of charge, so they do not drain your earnings. And you have the opportunity to build up the basis for the nest egg through regular payments and one-off special payments, which then even grows further through interest and compound interest. As a new overnight customer, you currently receive 1.0 percent overnight interest from Advanzia Bank and ING, for example.

For comparison: if you have to overdraw your account in order to stay liquid in an emergency, overdraft interest of six to twelve percent is often due.

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