The Money That Should Never Be in the Market
Part Two of the Total Richness “Money Made Simple” Series
9/22/20264 min read
The Money That Should Never Be in the Market
Part Two of the Total Richness “Money Made Simple” Series
In Part One (https://totalrichness.com/why-the-stock-market-is-going-crazy-right-now) we talked about why the stock market has been acting like a toddler who skipped a nap. And the question almost everybody asked afterward was some version of the same thing: okay, but what am I supposed to DO about it?
Here’s my honest answer, and it’s not the exciting one. The move that protects you when the market goes crazy doesn’t happen in the market at all. It happens in your checking account, weeks or months before the scary headline ever shows up.
Your money has two very different jobs
Picture two buckets.
Bucket one is long money. That’s money you truly will not touch for five years or more. Retirement money. Someday money. This is the bucket that belongs in the market, because time is the thing that makes investing work. Long money can ride out a bad month without you losing a minute of sleep.
Bucket two is near money. That’s money with a job in the next twelve months. Car registration. The insurance bill. New tires you can already hear coming. Christmas. This bucket does not belong in the market, no matter how good the returns look, because you are going to need it on a specific date and the market does not care about your calendar.
Almost every money disaster I’ve watched people go through started the same way: near money got treated like long money.
Why mixing them hurts so much
When all your money is in one pile, a down market stops being an abstract news story and becomes your problem. You need cash for something real in December, and the only place to get it is an account that’s currently down. So you sell at the bottom, and that loss, which was just a number on a screen, becomes permanent the second you cash out.
Or you don’t sell. You pull out a credit card instead. Now you’re paying interest on a bill you knew was coming all year.
Neither of those is a willpower failure. It’s a bucket problem. And bucket problems are fixable in about fifteen minutes.
Christmas is not an emergency
Let’s do the most useful example on the calendar right now, because today is the beginning of fall, which puts us about thirteen weeks from Christmas.
Christmas happens on December 25th every single year. It has never once moved. So it is not an emergency. It is an appointment, and appointments get planned for.
Say the holidays usually cost you around $650 when you add it all up. Gifts, food, the extra gas driving to see family. Divide $650 by 13 weeks and you get $50 a week.
Fifty dollars a week, starting now, and in December you shop with money that’s already yours. Money that you planned for by saving $50/week. Nothing to sell, nothing to swipe, no January hangover.
That kind of money even has a name. It’s called a sinking fund, which sounds gloomy, but all it means is cash you set aside a little at a time for something you already know is coming.
And if $50 a week feels like too much, that is real information that you need to know now instead of later. It is so much better to learn it in September than on December 20th. Either the number gets smaller or the list does. The only bad option is pretending and not knowing where and how your money is working for you.
This is also what protects your debt progress
If you’ve been working the domino method from The Fastest Way To Get Out Of Debt [https://totalrichness.com/the-fastest-way-to-get-out-of-debt], this is the piece that keeps December from undoing your year. What knocks people off a debt plan usually isn’t laziness. It’s the holidays showing up with no cash set aside, so the card comes out and the balance climbs right back.
There’s a health side to this too. That tight feeling in your chest when money and the calendar collide is stress, and your body feels every bit of it. Knowing the money is already sitting there is one of the most underrated forms of self care I know.
Your move this week
Don’t overhaul anything. Just do this.
Write down three expenses coming in the next year that you usually treat like a surprise. Christmas can be one. Put a rough number next to each, then divide by the number of weeks until it hits.
Pick one to start. Open a separate savings account and nickname it if your bank lets you, or use a plain envelope in a drawer. Move the first week’s amount before Friday. One fund, one number, one transfer.
Then go do something else. Pick another expense. Or if you can (depending on your income) Start another bucket at the same time and calculate how much to save in each one, each week.
That’s the quiet secret of the two buckets. Once your near money is handled, the wild headlines about the market stop feeling like they’re about you, because the money that matters this year was never in there to begin with.
Coming up in Part Three: where near money should actually sit, and why your regular savings account might be the wrong home for it.
Want a simple way to keep this going week to week? Grab the free Weekly Wealth Checklist at totalrichness.com/wealth-tools. It gives you one small money move a week, so you always know what to do next.
Wealth + Health = Total Richness
This is educational content, not financial advice. Your situation is your own, so for guidance specific to you, please talk to a licensed professional
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