Cash that clients can feel good about

When markets are loud, clients do not ask for a clever yield hack. They ask for calm. Maria put it plainly in a review meeting: “I want enough in cash that I do not flinch when the headlines turn red. I do not want to babysit it, and I do not want to guess which account to use when bills hit.” That is the brief. Cash that feels steady, lives in the right places, and is simple enough to keep without you in the room.

Below is a way to frame it that has worked across many households. It is not a rulebook. It is a conversation that respects both math and behavior.

Give cash a job clients recognize

I start by naming what cash is for. It pays the next few months of life on time. It absorbs small surprises without selling long-term assets on a bad day. It slows the pulse during volatility so the plan does not get rewritten by a headline. When clients hear those jobs out loud, they stop comparing rates every week and start thinking about reliability.

Use tiers, not tricks

Most clients relax when cash lives in two or three clear places, each with a purpose.

• A bills tier that money flows through. Checking for the next 30 to 45 days. Autopay on the predictable stuff. No heroics.
• A cushion tier that sits slightly out of reach but moves quickly. High-yield savings or a government money market fund at the custodian. This is the balance they can see and not touch.
• An optional reserve tier for people who like a bit more distance. Short Treasuries or a simple CD ladder for the next slice of needs they can forecast. Liquidity is still measured in days, not months.

I avoid labels like “bucket” and focus on how each tier behaves. Clients do not need perfect taxonomy. They need to know which pool pays for what and how money refills.

Keep refills boring

Cash works best when the refill habits are dull. Income lands in checking. A scheduled transfer once a month tops up the cushion if it dipped. During quiet markets, trims from the portfolio refill the reserve on a set cadence you both agree on. In choppy markets, you let the cushion do more work and delay those trims until prices behave again. The client’s experience does not change. That predictability is the product.

Safety matters more than a few basis points

Yield shopping is tempting. It rarely moves the life outcome. Clients are better served by understanding protections and mechanics.

• Bank savings and CDs sit under FDIC or NCUA limits. Simple, familiar, fast to use.
• Money market funds are not bank accounts. Government funds invest in short Treasuries and agencies and aim for stability, but they are investments. That is fine when explained plainly.
• Brokerage “sweep” features are convenient, yet terms vary. Some partners choose a named money market fund instead so they can see what they own.
• Treasuries settle and mature on schedules that are easy to plan around. For many clients, a short ladder feels calmer than guessing which promo rate will last.

When clients see the tradeoffs, they stop asking for the top yield and start asking for the right fit.

Taxes shape placement, gently

You can hold cash in different account types and get different outcomes. Taxable accounts make sense for day-to-day liquidity and gifting flexibility. Pre-tax accounts can carry a short fixed income sleeve if it helps contain ordinary income. Roth space is precious; I try not to park much cash there unless it is purely for mechanics. None of this needs to be rigid. It is enough to show that where cash lives can be as important as how much it earns.

Two quick client sketches

Maria and Jordan, mid 50s
Their nerves were frayed by a year of volatile headlines. We set one month of expenses in checking, two months in a high-yield savings account, and four months in a short Treasury ladder they could see on one screen. Autopay covered the predictable bills. A calendar reminder moved a set amount from savings back to checking on the first of the month. When markets were calm, small trims refilled the ladder. When markets were jumpy, the ladder did the refilling and the portfolio waited. Nothing fancy. The stomach drop went away.

Ken, recently retired, charitable giver
Ken liked seeing a larger cushion but hated the feeling of idle money. We kept one month in checking and the rest of his near-term needs in a government money market fund at the custodian. Because he gifts every year, appreciated shares in taxable were earmarked for the donations, and the cash structure made the timing easier. His question shifted from “is my cash earning enough” to “are we on pace for the gifts and the trips.” That was the real goal.

What to write down

I leave a short note in the file, two paragraphs at most. What each tier holds today and how it refills in normal markets and in rough patches. Then two conditions that would prompt a revisit, like a change in income, a new goal that pulls cash forward, or a shift in required distributions. Future you, or a teammate, can see the intent without guessing.

How to know it is good enough

Ask three questions at the end. Can the client explain which pool pays for what in under a minute? Will they maintain the refills without you nudging them? Does this setup make it less likely they will sell long-term assets at the wrong time? If that feels like a yes, the cash structure is doing its job, even if a model says another option pays a little more.

Closing thought

Clients do not need the perfect cash solution. They need a setup that pays the bills on time, absorbs the ordinary surprises, and buys them the patience to let the rest of the plan work. When cash has clear jobs and quiet refills, reviews feel lighter and decisions get better. That is usually enough.