How Much Cash Should Be In Your Financial Plan? What role should cash play in your financial plan? David Shotwell, a financial planner with Shotwell Rutter Baer in Michigan joins FinStream TV Co-Founder Bob Powell to discuss the role of cash in your financial plan. A lot of people focus on the fact that rates have risen for money markets and CDs. Since 2022, we’ve seen rates of 5% or better on cash vehicles like these. Rather than concentrating solely on the current rate, we encourage people to consider how they plan to use their money.

Treat these cash vehicles as places to park money for specific purposes: A) as a contingency fund, and B) for money you know you’ll spend in the next 24 to 36 months, depending on your risk tolerance. Beyond that, cash investments are likely to perform in line with inflation over the long term.