Lesson Three -- BYU -- Cash Management -- August 24, 2024 -- August 31, 2024

Zoom meeting: September 1, 2024

Cash management:

• record keeping, notional: link here.
• budget spreadsheet, notional: link here.
  

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Chapter 4: Cash Management

Chapter 4 -- Cash Management: Making Little Things Count: link here.   [95 of 352; page 84]. [60 minutes]

From Vanguard: 

First, what is cash? Cash can take many forms, including money held in your bank account or wallet. Additionally, there are cash investments (also known as cash equivalents), which are a type of short-term investment product that earns interest.

In that sense, we define "cash" as a readily available short-term financial instrument with high liquidity, minimal or negligible market risk, and a maturity period of less than 3 months.

Back to the BYU course.

Begins on page 84 or 95 of 352.

Definition of cash management: the term “cash management” is the process of collecting and managing and investing cash for the short-term, generally savings and/or checking accounts.

Papa's takeaways / advice:

• this would be a great time to see if folks are keeping a financial journal of some sort
• the BYU course lists many, many different financial institutions
• Papa's advice: minimize number of institutions with which you deal
• move money around in that one institution: savings, checking, investing
  
• a discount broker, such as Schwab, can probably meet 90% of your needs
• in addition to a discount broker, one might consider
• local bank for checking account but absolutely not necessary: probably not advised
• college may have a "student account"
  
• a credit card not associated with the discount broker
• for now, learning how to move money around, easy access to cash, etc., more important than worrying about best yield; that will come naturally
  
• work with parents to determine amount of money you need to keep in cash / checking account
• saving accounts
  
• savings accounts are a thing of the past; do not open -- so many better options
• savings bonds are a thing of the past; do not open -- so many better options
• money market funds: a much better option for parking cash
• spaceholder
  

Objectives:

• understand the importance and principles of cash management
• know the different types of financial institutions that
• you need to spend time on each week
• you need to effectively manage your finances
• understand the different cash-management alternatives
• know how to compare them
• Actionable: create your own cash management plan

At this point, your cash management plan may be very rudimentary. It's the thought that counts. 

Spend wisely but don't be miserly. These are the best years of your life.