Make It Make Cents: Listener Q&A on What to Do With a Raise, Extra Cash, and Spending Guilt

In this listener Q&A episode, Shari Rash answers real money questions from women who are doing a lot right but still want more clarity around what to do next. Should a raise be saved, invested, or enjoyed? How much cash is too much cash once your emergency fund is covered? What if you are saving every month but still feel guilty spending on travel? And if you are single and managing everything on your own, should you keep a larger cash cushion than someone in a two-income household? Shari breaks down how to think through these decisions without shame, overthinking, or relying on one-size-fits-all rules. Because money should not just sit there, disappear, or make you feel guilty for using it. Money should be a tool that helps you live life on your terms. If you’re ready for personalized, judgment-free financial guidance, learn more about working with Shari. Shari Rash is the founder of GWA Wealth, a virtual advisory firm helping women make confident, values-aligned decisions with their money. Visit GWA Wealth to explore your next step. Talkin’ Points → where your money gets smarter. Real talk, practical tips, zero guilt straight to your inbox. Sign up here. Be sure to like and follow the show on your favorite podcast app! Keep the conversation going on Instagram @everyonestalkinmoney Shari Rash is a financial planner and Investment Adviser Representative of GWA Wealth, a Registered Investment Adviser. The information provided in this podcast is for educational and informational purposes only and should not be construed as personalized investment, tax, or legal advice. Listening to this podcast does not create an advisory relationship with Shari Rash or GWA Wealth. All investments involve risk, including the potential loss of principal. Any references to specific investments, strategies, or securities are for illustrative purposes only and are not recommendations. You should consult your own financial advisor, tax professional, or attorney regarding your individual situation before making any financial decisions. Learn more about your ad choices. Visit megaphone.fm/adchoices

• 0:01Speaker 00

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration blog, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required. Compatibility and availability varies 18 plus.

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• 1:32Speaker 03

  Hi, everyone. Welcome back to Everyone's Talking Money. I'm Shari Rash and today we're going to do things a little different. Today, we are going to answer some listener questions. When I am creating episodes, I, I think about you. What do you want to hear? And sometimes I hit the mark and it's right on and other times it's not. So if at any point in time, there is a topic that you want me to talk about, send me a message, go to my website, everyone's talking money podcast.com. Send me a message and ask me a question or request a topic. I'm always reading my emails. I'm always reading my messages. So don't hesitate to reach out.

• 2:16Speaker 03

  I'm here for you to make sure you get as much as you possibly can from this podcast. If you like what you're hearing, do me a favor. Share it with a friend. That is the best way for the podcast to grow. So please hit that share button, send it in your group text, whatever it is. Just share this show with more people so we can get more women empowered and talking about money. So today I have a handful of questions. Let's, let's dive in. First, we have from Lauren. She's 39 years old. She's from Denver. Hi, Shari. I just got a raise at work, which I'm really grateful for.

• 2:58Speaker 03

  But now I'm already overthinking what to do with the extra money. Part of me feels like I should save all of it because that's the responsible thing to do. Part of me thinks I should increase my investments. And honestly, part of me wants to enjoy some of it because I've worked really hard. How do I decide how much to save, invest, and actually let myself spend? I love this question because it's so real. And I think all of us have experienced this. Whether it's a raise, a bonus, a windfall, whatever it is, it's like the devil and the angel are on, on our shoulders. Devil's telling us to spend it. You work hard, go enjoy it, you know, live it up. And then the angel's like, you should invest, you should save, you should, you should do the responsible thing.

• 3:43Speaker 03

  I kind of meet you, I'm going to meet you in between. Here's what I'd like you to do, Lauren. I want you to go buy yourself a treat. Is there something you've really wanted for a while? And you haven't been able to get it? Or you feel bad about getting it? Buying it for yourself, doing a massage, like whatever it is, if you've been wanting to do something, buy something, spend a certain amount of money on yourself and you felt awkward doing it or wrong, like it's not responsible. I'm giving you permission to go do it. Now, I'm saying that like with some guardrails. Like I'm thinking like this is like a, you know, a moderately priced thing. If it's a purse you really wanted, go, go get it. Go get it for yourself. Okay. That is your treat.

• 4:28Speaker 03

  That is your reward for your hard work. Okay. Then what I would like is if you have been living comfortably on your previous income, like if you, you aren't accumulating debt and your, you, your, your wants are pretty much fulfilled. It doesn't feel like you're pinching pennies all the time. I'd really love if you could continue living on your current, on your previous salary. So whatever that previous salary was, if you can continue living on that. So after you buy yourself your treat, the, the increase in income, if we could do something with that money for your future self, that would be ideal.

• 5:12Speaker 03

  So save it, invest it, contribute more to retirement, create an after-tax investment account and send the money there, the extra money in your paycheck. That would be great. If you are, um, not, if, if things were tight before, if, if things were tight with your previous salary, we need to figure out, okay, how can we make things feel not so tight? So how much extra money from this new income do you need in order to just breathe? So that might take looking back at past month's expenses and really understanding what your expenses have been.

• 5:54Speaker 03

  And then using that extra money to make sure things are even in your household. Then saving what's left over, then investing what's left over, making that money work for you. That is, that would be what my recommendation is. So it kind of, it's the best of all worlds. You're getting yourself your treat. You are rewarding yourself because you do work hard. You do deserve it. But then we are trying to save. Ideally, we are still continuing to live off of our previous income, saving what that extra income is, what that new raise represents. And then, um, and then it's working for us. So, so we're hitting up everything because we want to make sure your future self is like,

• 6:39Speaker 03

  I'm so glad I got that raise 10 years ago because look at all the money I have now. Look at all the savings I have now, or look at the debt that's paid off. That's another thing. If you have some debt, I would use, I would keep your lifestyle exactly the same on your previous income and redirect all that extra income to your debt. Okay. Again, after you buy yourself a treat, we are still getting ourselves a treat, no matter what, because we are rewarding ourselves. If we don't reward ourselves, you know, six months from now, you're going to wake up and be like, I worked so hard and I feel like I have nothing to show for it. I have, you know, my quality of life isn't there. I can't get myself things I want to get. So we want to make sure you get yourself your treat.

• 7:23Speaker 03

  And then we then use that extra money to work for us. Whenever we have a windfall, we have to have a plan for the money. Otherwise, lifestyle creep will happen because you'll just, if you don't have a plan for that, that raise, then we will just start spending it and, and our, we'll, we'll just start incorporating it into our lives. And we will never feel like we got the raise because the lifestyle creep just happened. So we just buy the more expensive thing, go out to dinner a little bit more. Whatever it is, get the more expensive car. It happens to all of us if we don't have a plan. So lifestyle creep is very real.

• 8:06Speaker 03

  And when, especially when raises happen, that's when we see lifestyle creep happen. So hopefully that answered your question. I love that and I'm sure that resonates with so many of our listeners. Okay. The next question we have is from Megan. And she says, I have my emergency fund fully funded and then some. I probably have more sitting in savings than I technically need, but moving it to the market makes me nervous. How do I figure out what amount should stay in cash versus what I should invest? I don't want to be irresponsible, but I also don't want to let fear keep me from doing something smarter with my money. Again, I feel like so many people can resonate with this, can feel this question,

• 8:50Speaker 03

  can feel what Megan is going through and why she's asking it. And as I've mentioned in previous episodes, there is a risk of having too much cash. Because when you have too much cash, quote unquote, too much cash, that means your money's not working for you. It's sitting in your savings account and it's just sitting there. It's not doing anything. It may be accumulating, um, some interest. You know, if we have like a high yield savings account from one of the online banks, it may be accumulating a decent amount of interest. But I don't know about you, but. For for those of us that do have those high-yield savings accounts, I'm getting an email, it feels like every other month, that here is your new savings rate. And it's like, or interest rate, and it's lower.

• 9:35Speaker 03

  Well, they don't tell you what it is. You have to like really dig to find out what that new rate is. And it's lower than it was previously. So those rates keep going down. So all the money we're holding in cash, if it's too much, then yeah, it is hurting us because our money's not keeping up with inflation. It's not earning more. So we need to figure out how much money should you have in cash? And that's really a, that's, that's a personal decision. That's a household decision. And, and there's a lot of factors. Everyone should have an emergency fund, which, you know, rule of thumb is three to six months' worth of expenses. If we're leaning more conservatively, we're saying six months.

• 10:14Speaker 03

  If you are in a single-income household, if your job is more commission-based, so it's sales-based, then you should lean more conservatively. If your job is uncertain, like if your future of it is uncertain, you should lean more conservatively. If you are in a dual-income household, or you have a very steady job, you know it's not going anywhere, it's a consistent salary, then maybe you could lean a little bit more towards the three months. Owning a home versus renting, if you own a home, there's more things that are going to go wrong. There's more expenses. Again, a reason to lean more conservatively with cash, because things are going to go wrong. You're going to need cash to pay for it.

• 10:58Speaker 03

  So figuring out the amount of cash is super important. And I do have some episodes that talk about how much cash to have. So that's the emergency fund. If you still feel like you need more cash outside of your emergency fund, then we create what I call, what are called sinking funds. Sinking funds are, is cash set aside for a purpose. So emergency funds, once they're set, you put them away with lock and key. They do not exist to you until an emergency happens. And that's where I think a lot of people get tripped up, is that they'll think of an emergency fund as a savings account, and then they'll pull money from their emergency fund over to their checking account when they need it.

• 11:42Speaker 03

  I find that when I'm working with my clients, that once they truly understand what an emergency fund is, and you are not touching it, you are not moving money to and from your emergency fund to your checking account when things get tight, they tend to lean more towards the three months' worth of expenses in the emergency fund. Because they're like, wow, that's a lot of cash to have sitting there and, and not being touched, not being utilized. Its only job is to sit there. So really understand that, that the emergency fund is just sitting there. It's in lock and key, break glass in case of emergency.

• 12:23Speaker 03

  And, you know, an emergency can be, oh, my gosh, I owe way more in taxes than I thought. An emergency could be, I got in a car accident, I need to fix my car, outside of what's covered for insurance. An emergency could be, I need to replace windows in my house, and it, it, this came up quickly. Those are emergencies, right? That, and, and you have permission to use your emergency fund. I, sometimes I, we, we then become, we, we feel weird about using our emergency fund. But it's there. It's there for emergencies. So don't feel weird or guilty after you use your emergency fund, because that's what it's there for. Thank goodness we have it, right?

• 13:04Speaker 03

  But it's not for, oh, my checking account is low, I'm going on vacation, I need cash. That is not what your emergency fund is for. A sink, that is what sinking funds are for. Sinking funds are for those expenses that are infrequent, but they're, so they're not part of our monthly budget, not part of our monthly spending. And, uh, but we need cash, like we're, we want to pay for it in full. We want to save for it over time. So sinking funds, a, a example that I use all the time, because I think it hits personally, my car insurance bill and my HOA fee.

• 13:45Speaker 03

  So my car insurance renews every June and January, or June and December, some, every six months, right? And every time it happens, I'm so surprised when I get the bill. I'm like, oh, man, I feel like I just paid this. Oh, why am I getting this? Well, that's not part of my monthly spending, because it only happens twice a year. Same thing with my HOA dues. They come, I, they come in this, in July and January, right after my car insurance, actually. And it's always right after the holidays, and then you get this bill, and it's like, oh, my gosh. Like, I'm surprised every time, taken back by it, but I know it's there. So those are two perfect examples of sinking funds.

• 14:26Speaker 03

  So every month, if, if I'm paying $2,000, or let's make my math easy, $2,400 a year for my car insurance,

• 14:38Speaker 03

  then I put $200 a month into my sinking fund. I'm not paying my car insurance every month, because that's only a, that's a six, every six-month bill, but I'm putting $200 a month into my sinking fund. So then, when I get my bill, I have the money to pay for it. Same thing for the HOA dues. Put a couple hundred dollars a month, divide it by 12, however much it is, put that money into the sinking fund. You want to go on vacation. How much do you spend on vacations? Or how much do you want to spend on vacations? Divide that by 12, put that money into your sinking fund each and every month. By getting the line item in your spending strategy, you're not then getting this big bill once every six months. And you're like, oh, my gosh, how am I going to pay for this?

• 15:23Speaker 03

  Let me go to my emergency fund to pay for it. No, that's not an emergency. We are using our sinking funds to pay for this. So that, so you can have, so, and, and, and the values of your sinking funds are going to fluctuate, right? So at, sometimes your sinking funds may seem super flush, because you, the bill is coming soon. You might be in month five, when the bill comes in month six. So your sinking funds may be flush at times. You may feel like you have a lot of cash, but then it goes away once you pay that bill, and then you repay it back up. So it's, so money is, is consistently moving in, but then it's moving out kind of in clumps. It's a little bit more lumpy.

• 16:05Speaker 03

  So that, so I would say, when we're figuring out our cash, we're first fully funding our emergency fund. Then we're looking at our sinking funds and, and deciding that. And I don't want to have like 17 sinking funds, okay? And I think that's another problem that we have, is that we're trying to be like over-prepared. So then we're like, well, this, and this, and this, and this. So like, here are some ideas for sinking funds. I told you my car insurance, my HOA dues, maybe Christmas holidays. Let's have a sinking fund for that and travel. Like, those are big expenses. They don't have an, happen monthly. And they're, they should not be part of our, our, you know, the one month that we're spending all this money, we shouldn't be expected to have to pay for that in full,

• 16:50Speaker 03

  the month that's happening, right? A part of our regular spending. But we can set money aside every month towards those sinking funds. Then when the bill comes, that one time a year, or the two times a year, we have the money to pay for it. Beyond that, unless, you know, you are saving for a house, or, or whatever it is, I have a client right now, we're working on, one of her sinking funds is saving for a car. So yeah, that sinking fund is getting big. She's contributing a, a lot of money to it. It's not, the money's not leaving, but once it's gone, then that sinking fund is closed. It doesn't exist anymore. So think about what you have, Meghan, going on that you need cash for, okay?

• 17:34Speaker 03

  And let's set up sinking funds for them and contribute to it monthly. Other than that, you don't really need to have a lot of cash, or cash besides that on hand, okay? And if you do need cash for some reason, that's why we have the emergency fund, right? So.

• 17:53Speaker 00

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration blog, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required. Compatibility and availability varies. 18 plus.

• 18:18Speaker 03

  But then if you like the idea, though, of having cash for flexibility, that's where we're starting after-tax investment accounts. If you have something coming up or think you're going to have something coming up and you, you, you want liquidity for it into for 10 years from now, that money doesn't need to be in cash. We could have a after-tax investment account, which I have started lovingly called our Freedom Funds. Create a Freedom Fund for yourself, an after-tax investment account, a brokerage account, an individual account. They all have different names, doing the same thing. And it, and send your money there. Send your extra savings there, that extra money you're finding in your bank account. If you find that you're accumulating money in your checking account

• 19:02Speaker 03

  and it's over and above an amount that really you need, take every so often, sweep some off the top and send it to this investment account. And that's your Freedom Fund. That is money that you could use for a down payment for a house. That's money that you could use to go on a sabbatical, to go on a really awesome vacation in, in five years, whatever it is. That, that gives you the flexibility. You can also use it for retirement, right? Like, there's no rule saying we, we only need retirement assets for retirement. So that's what I would say, Meghan, is I know, I know it feels safe to have cash, but understanding inflation and that you are losing money,

• 19:47Speaker 03

  the more money that we have sitting in the bank earning no interest, it is actually hurting you. So we want to get your money working for you. Also, markets go up and down. I know that you, you said investing in the market makes you nervous. Over time, though, markets go up and you are not tech, and, and let's say there is a bit of a downturn. You are not technically losing money until you cash out and you have less than what you started with. That is when you lose money. So let's say you invest $10,000 and it goes up to 15 and then down to 13 and then up to 17 and then down to 11 and you cash it out. You still made $1,000 because you invested 10.

• 20:30Speaker 03

  Yes, at different points in time, it was worth $15,000, $17,000. Yes, but you don't technically lose it, lose anything until you cash out. And even in that scenario, you still made $1,000. You were $1,000 higher than what you started. If you would have cashed out at $9,000, then yes, you did lose $1,000. Okay, so we need to get past the, in, in general, everyone, the way they think, oh, I lost this much money today. No, the value has just fluctuated. You're, we are not losing until we're cashing out. And even then, we're only losing if we walk away with less than what we put into it.

• 21:11Speaker 03

  Okay, so just Google, you know, moderate ETF portfolio, exchange traded fund portfolio, Google, you know, a conservative, you, let's start off conservative, conservative exchange traded fund. And use that and start off with that. Also, we could do a thing called dollar cost averaging, which is you invest systematically over time. So $100 every two weeks and it's just set up and it's automated and you don't have to think about it. That way, when the market's doing what it's doing and it's going up and down, your $100 is buying in at different price points. So some days it may be higher, some days it may be lower,

• 21:56Speaker 03

  but dollar cost averaging helps to smooth out some of the volatility of buying in. It helps to alleviate the concern of, well, if I just invested all this money and the market goes down the next day. Dollar cost averaging helps to alleviate some of those concerns. So you could dollar cost average in. So take your money, smooth it in, invest it, smooth it over time. So you're not feeling those big dips and peaks and valleys while you are investing. So hopefully that helps, Meghan. Let me know and let's move on to the next question. This is from Rachel. She's 41, she's in Chicago. I don't have a credit card debt. I save every month and I'm contributing to retirement.

• 22:41Speaker 03

  On paper, I think I'm doing okay, but I still feel guilty spending money on travel even when I can afford it. I keep thinking I should be putting that money somewhere more responsible. How do I know when it's okay to actually enjoy the money I've worked for? So first, you, you value travel. It sounds like that is what you value. When I'm speaking with people, sometimes they feel like I make money, I have nothing to show for it, or I, I spend my money and I still feel like I have nothing to show for it. I feel very like empty. I'm not fulfilled by the way I'm using my money or the spending that I'm doing, the buying that I'm doing. And that's often because your, your spending doesn't align with your values.

• 23:24Speaker 03

  You may value travel more than going out and buying a new outfit or going out to dinner or going to a concert or shopping, right? If that is your main thing, then we need to make sure your money is being spent in a way that reflects your values. So travel, so we're creating a sinking fund. We are creating a travel fund. And you may put into that more than the average person because you like to travel, you want to travel and that's fine, right? As long as we are not going into debt for these things, it's all good. So if that, so what I would recommend, Rachel, is for you to look back at your, you know, last three months of spending. Where is your money going? And is it reflecting your values? What are your values?

• 24:09Speaker 03

  Is it travel experiences? What is it? Is your money reflecting your values? And if the answer is no, how can we, going forward, eliminate or reduce spending that doesn't reflect our values and put our money towards what does reflect our values? So look back, if you find you have a lot of Target runs and Home Goods runs and they feel very unfulfilling, you don't value that stuff. So I give you permission to stop spending on it. Stop, stop going to Home Goods. It's okay, there's really cute stuff, but like, if you don't feel good about what you're buying, then why, why are we doing it? So, and then redirect, okay, well, I spent X amount over the past three months on stuff, things, whatever,

• 24:53Speaker 03

  that does, that don't support my values, that don't support travel. So now we know, okay, going forward, let's try to direct as much as we can of that spending that you did on average to your sinking fund for travel. And let's send it there. So whether it's, you know, $300 a month, 400, whatever it is, send that money to your sinking fund for travel. And this is my travel fund. So then when you're driving past Target and you're kind of like, oh, I feel like going in, no, Rachel, that doesn't, you're talking to yourself right now. No, Rachel, that does not reflect my values. I, I don't feel fulfilled by doing that. I'd much rather send that money to my sinking fund. And maybe as you, when you get home,

• 25:36Speaker 03

  go send a little extra money to your sinking fund for travel to reward yourself for that, for that decision. Because that was a very responsible, empowering, thoughtful decision that you made.

• 25:51Speaker 03

  So no one ever says, oh, I, I wish I never went on that trip, right? So, and it feels even better when you have the money to just pay for it. You're worried, though, that you should be putting your money somewhere to be responsible. If you're contributing to retirement, if, and could you maybe afford to contribute a little bit more? Like, one, are you getting your employer match? That's, that's first and foremost. So if you're maxing out your employer match, fantastic. Now, let's look somewhere else. Maybe we're creating a Freedom Fund instead of contributing to retirement. So we're creating a Freedom Fund, an after-tax investment account, and we're sending our money, sending some money there.

• 26:34Speaker 03

  Sending money to our travel fund, sending money to our after-tax investment account. That way you are feeling responsible, quote unquote. You can use that money for retirement. As I mentioned in the earlier question, you can always use your Freedom Fund for retirement. So we're saving. So we're, we're kind of hitting, we're hitting everything. But I don't want you to feel bad for traveling. If you can afford it, and it sounds like you can, don't feel bad about it. Is there, is there ways maybe to reduce your other spending to contribute to your travel fund? That's what I would think about. Okay, so hopefully that helps.

• 27:15Speaker 03

  And I can't wait to hear about all the awesome trips you go on without feeling guilty. If you have a question for me, like I said before, please don't hesitate to reach out and ask it. I love getting questions from listeners. One, it makes my job so easy because I don't have to think of an episode topic. So thank you for that. But also, this is what you want to hear. This is what you want to know about. And I'm here to empower you with your money, make you feel more confident. I have some big changes coming up with the podcast. I'm super excited about it. Please continue listening. Please share the show with your friends or family members, anyone that can benefit from it. That helps us grow, helps us get in front of more women

• 28:00Speaker 03

  and helps the, the conversation about money. So thank you so much, Rachel and Lauren and Meghan for your questions. Keep them coming and I'll see you all next week. Thanks for listening to Everyone's Talking Money.

• 28:26Speaker 01

  This episode is brought to you by State Farm. Football has a play for just about everything. You can go deep, keep it on the ground, or draw up something nobody sees coming. And whether you want to run a flea flicker or the tush push, you need a plan to fit your unique situation. That's why State Farm takes the time to get to know you so they can help personalize coverage for your life and budget. Now that's a solid game plan. Like a good neighbor, State Farm is there.

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