{"id":3986,"date":"2025-06-03T09:41:43","date_gmt":"2025-06-03T15:41:43","guid":{"rendered":"https:\/\/smedleyfinancial.com\/wp\/?p=3986"},"modified":"2025-06-03T09:41:43","modified_gmt":"2025-06-03T15:41:43","slug":"episode-92","status":"publish","type":"post","link":"https:\/\/smedleyfinancial.com\/wp\/episode-92\/","title":{"rendered":"Episode 92: Savings Accounts Don&#8217;t Make Cents"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Power Up Wealth podcast \u2013 Episode 92 \u2013&nbsp;Savings Accounts Don&#8217;t Make Cents<\/p>\n\n\n<div id=\"buzzsprout-player-17274316\"><\/div>\n\t\t\t\t <script src=\"https:\/\/www.buzzsprout.com\/1927704\/17274316.js?container_id=buzzsprout-player-17274316&amp;player=small\" type=\"text\/javascript\" charset=\"utf-8\"><\/script>\n\n\n<p class=\"wp-block-paragraph\">James Derrick 0:00<br>Yields on many savings accounts are up, but if you have a significant amount of money sitting in your checking account, you may need to make a change. I&#8217;m James Derrick, and today we will explore how much cents there is in savings with Jordan Hadfield.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Sharla Jessop 0:27<br>Welcome to the SFS Power Up Wealth podcast, where we provide impactful insight and expert opinions on timeless financial principles and timely investment topics, preparing you to make smarter decisions with your money.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">James Derrick 0:50<br>Thank you for joining me today, Jordan.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Jordan Hadfield 0:52<br>I&#8217;m really glad to be here, James, thanks for having me.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">James Derrick 0:54<br>Jordan is a private wealth consultant at Smedley Financial Services. He&#8217;s also a Certified Financial Planner. Jordan, you recently wrote about savings accounts don&#8217;t make cents. Pun intended.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Jordan Hadfield 1:05<br>Yeah, they don&#8217;t. That&#8217;s true. They don&#8217;t make any cents.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">James Derrick 1:08<br>So yields are up. Interest rates are up. I mean, they&#8217;re not as high as they were a year ago, but they&#8217;re still pretty high.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Jordan Hadfield 1:14<br>Correct.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">James Derrick 1:15<br>And so there actually is a lot of opportunity in savings. But in your most recent article in the SFS Money Moxie, you&#8217;re picking on savings.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Jordan Hadfield 1:24<br>Yes, very much.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">James Derrick 1:26<br>So tell us what you don&#8217;t like about &#8220;savings accounts.&#8221;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Jordan Hadfield 1:30<br>So let me flow this idea out there, James, you tell me what you think of it. Savings accounts, in name is a marketing ploy. If you&#8217;re a bank and you&#8217;re a credit union, you want people to save with you. So you create an account dedicated for savings. And everyone thinks, oh, this is the account that is meant for saving my money. This is my savings account. This is where I save. It&#8217;s a marketing ploy. I don&#8217;t think savings accounts are a good place to save money at all. In fact, I think they&#8217;re a terrible place to save money.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">James Derrick 1:59<br>I mean, are you saying you would put zero in a traditional savings account?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Jordan Hadfield 2:04<br>So everyone manages their personal finances a little bit different, but I can tell you, I never have more than about $5,000 in my savings account at any time. My checking account is designed to cover my monthly expenses. My savings account is there if I have a month where I run a little hotter than I&#8217;m expecting, if I spend a little bit more, if I have an unexpected expense, my savings account is just to cover that. Nothing else.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">James Derrick 2:29<br>That&#8217;s it. So you keep them low. You keep them very low. Let&#8217;s, let&#8217;s talk about the drawbacks.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Jordan Hadfield 2:35<br>Yeah.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">James Derrick 2:35<br>And then we&#8217;ll talk after that about some of the other options that you do like.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Jordan Hadfield 2:40<br>Yeah. And I recognize this may surprise you. This surprises a lot of people that I talk to, but once we talk through it, they&#8217;re like, oh, okay, I see what you&#8217;re doing. That makes a lot of sense. So yeah, let&#8217;s talk through it. Let&#8217;s talk about the drawbacks. The main problem I&#8217;m pointing at in my article here is that savings accounts don&#8217;t pay you any interest. You know, we all hear the saying we need to put our money to work for us, the savings account is not putting your money to work for you. You put your money in a savings account and you&#8217;re not keeping up with inflation. Every single year, your savings account is losing purchasing power, and you don&#8217;t even realize it. If the balance stays the same, if I put $25,000 in a savings account and I leave it there for three years with an average of 3% inflation, at the end of that three years, I&#8217;m still gonna have 25,000 if I haven&#8217;t, you know, made any withdrawals or deposits into the account. However, the purchasing power of that $25,000 has been decreasing. I&#8217;m losing money every single year. That&#8217;s the main point I&#8217;m making in this article as far as it not paying you. You&#8217;re losing money relative to inflation. When inflation is high, you&#8217;re losing a lot. Historically, inflation has been around 3% maybe a little less. That&#8217;s more than I want to lose in an account that&#8217;s absolutely free. The pros to savings accounts is there&#8217;s no risk and it&#8217;s liquid. Now these are important. It is very important that we have an emergency fund or an account for short-term savings that has no risk and that is completely liquid. So I&#8217;m not suggesting in any way, shape or form, that we take all our money and we throw it in the market, the stock market or even the bond market. We don&#8217;t want to throw it in CDs, because CDs are illiquid. So there is a purpose for the idea of a savings account, that is very important, but the savings account itself at the bank or the credit union is not the place. There are other places that can accomplish these goals a lot better.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">James Derrick 4:32<br>One of the things I noticed before we go there, I just want to mention that when I scan through my different accounts, I see that the interest rate varies a great deal as well. Some institutions are paying much better yields than others.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Jordan Hadfield 4:45<br>Yes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">James Derrick 4:45<br>As well. And it takes a little bit of time, but not that much time. It would be well worth any listeners time to look at how much they&#8217;re getting paid in their checking account. It&#8217;s probably close to zero.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Jordan Hadfield 4:59<br>Exactly.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">James Derrick 4:59<br>How much in the savings account and one of your savings account could be significantly better than another.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Jordan Hadfield 5:05<br>Yeah, that is true. I want to put an asterisk there, because we can often chase yields, and we spend too much time bouncing from this savings account to that savings account to make, you know, .05% more, and then three months later, it switches. And so we move to another. So we definitely want to put our money in a place that&#8217;s competitive based on our goals. And you know, as long as it stays competitive, then that&#8217;s a good place that we should put our money and keep it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">James Derrick 5:33<br>Let&#8217;s talk about other options, other accounts that might be more attractive.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Jordan Hadfield 5:38<br>Most people keep their emergency fund in their savings account. Where I keep my emergency fund is in a high yield savings account. Now, there&#8217;s a big difference from a savings account and a high yield savings account in terms of dividend paid. Yield. But there is no difference in any other way, shape or form for the most part. So for example, a high yield savings account is 100% liquid. Most of them, if not all of them, are entirely free. So free to open the account. There&#8217;s no transaction costs, no annual fees, no withdrawal fees. It&#8217;s FDIC insured just like your savings account at the bank or a credit union. It is a savings account, but it&#8217;s a high yield savings account, which means, typically, you&#8217;re going to find these at a place like, like American Express or Marcus is a big one from Goldman Sachs. There&#8217;s a number of them out there. You search for them online. There is not a brick and mortar store. There&#8217;s not a location that you go to and open a high yield savings account. These are online accounts only. Now, I do have some clients that&#8217;s like, oh, that concerns me. If all my money is just online. You know, and often I tell people your bank, the money that you have at the bank is all online, like, there isn&#8217;t a vault in the back that&#8217;s got all of your money in it. This money is earmarked in an electronic computer, and it&#8217;s moved and used elsewhere in the bank for the most part, whether we&#8217;re banking through high yield savings accounts or banking through, you know, Zions or Deseret First, or America First, or Bank of America, it doesn&#8217;t matter, all of these institutions are utilizing online savings.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">James Derrick 7:13<br>I suppose there should be some concern if it&#8217;s a company you&#8217;ve never heard of before.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Jordan Hadfield 7:17<br>100%! Yeah. Yeah. 100%. Always. Don&#8217;t find a high yield savings account from the dark web and use it just because it&#8217;s paying a little bit higher like use a credible financial firm that you&#8217;re familiar with, and there&#8217;s a lot of them out there.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">James Derrick 7:30<br>What&#8217;s your take on CDs?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Jordan Hadfield 7:32<br>I don&#8217;t typically like them. I think there&#8217;s a time and a place for CDs. Problem with CDs is they&#8217;re illiquid. A high yield savings account will often pay similar return as a CD, but it&#8217;s completely liquid. For an emergency fund I don&#8217;t typically like CDs. If I have an expense coming up and I&#8217;ve got the ability to put some money in a CD and and select a maturity date right before that debt is due, they&#8217;re great. And if there&#8217;s extra cash sitting around that we can throw in a CD. If rates are particularly high at this point in time, then, okay, but I would never, I mean, it would never, say, never, right? But I cannot think of a time that I would ever purchase a CD that&#8217;s got a maturity over 12 months, because there&#8217;s better place to put your money, and I wouldn&#8217;t put everything in a CD. So I&#8217;m not a big fan of CDs. I do own one, but I don&#8217;t have a lot of my money there, and it&#8217;s not something I often utilize.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">James Derrick 8:26<br>When do you decide that it&#8217;ll be appropriate to actually invest the money?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Jordan Hadfield 8:30<br>This is the million dollar question right here. The best way to do risk analysis when we&#8217;re talking about how much risk we should be taking with our money, is by timeframe. So if you&#8217;ve got emergency fund aside, if we have an emergency, we have no idea when that&#8217;s going to come. Emergency fund, regardless of timeframe, it needs to be safe, out of the market, completely liquid, available to us. Okay. So emergency funds are exception to this rule, but with everything else. If I&#8217;ve got an expense coming up, a planned expense that&#8217;s less than 24 months, I want to be very, very careful with that cash. So I would put it in something like a high yield savings or, again, maybe a CD or a money market account. Maybe, depending on the situation, I might put it in the bond market, right, and then short-term bond, something that&#8217;s very safe. 24 months or less, we want to be safe. If we&#8217;ve got 24 months to five years, we want a portion of that in equities and stocks, because five years, you know, two to five years is a moderate timeframe. A portion of that should be invested for greater growth. And if we&#8217;re going from five years on, again, a larger portion of that should be invested into equities. So whenever we&#8217;ve got a pile of money, the first question we need to ask ourselves is, when am I going to need this money? And if we don&#8217;t have an answer to that, then we can&#8217;t answer the following question, which is, where do I put it? So timeframe is very, very important when we&#8217;re doing risk analysis and determining where to put our extra cash. I&#8217;m<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">James Derrick 10:03<br>I&#8217;m not sure most people take the time to really think about this. I mean, like, if it&#8217;s a 401(k) or an IRA, Roth IRA, that type of thing, it is for retirement. And so you have some idea on the time horizon, but all the rest of the money that we have saved up, do we really have a timeframe for it?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Jordan Hadfield 10:20<br>I&#8217;m surprised a lot of people don&#8217;t. A lot of people have it sitting in their savings account.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">James Derrick 10:24<br>So as a financial advisor, how do you help them figure that out?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Jordan Hadfield 10:27<br>Well, we talk about what their goals are. You know, what is the purpose of this money? We want to put this money to work for you. The savings account is not the place for it. We want to put this money to work for you. Where do we want to put it? Based on your timeframe, and we talk through those goals, try and determine what the goal for the money is, and then we adjust it from there. Another thing that comes up is just comfort level. There are some people out there that just do not feel comfortable if there is not X amount of dollars available to them immediately. And so a typical emergency fund is three to six months of spending. And there are some people that are like, I want my three to six months plus an additional 20 grand. I&#8217;m just, I don&#8217;t feel comfortable if my bank accounts are that low. Some of that, you know, there&#8217;s some validity to that to some degree, but we don&#8217;t want to have a large amount of money in our savings account, definitely not our checking account. And another reason that I that I think is important is checking accounts and savings accounts aren&#8217;t as safe as we think they are. Now they&#8217;re definitely protected against market movements, but where they&#8217;re not protected is against fraud, and oftentimes I meet with clients who say I got on the phone with somebody, and they tricked me. I was manipulated, and they got into my checking account or my savings account, and they wiped it out, and I cannot get that money back. And although that risk is present for every type of account, it is far more likely that you&#8217;ll slip up and give someone your bank information. Then you would slip up and give someone your IRA information. If someone calls you saying, you know, I&#8217;m with Deseret First Credit Union fraud department, and we&#8217;ve got your checking account locked down. You know, we need you to verify some of your information. Please give me your account number and your whatever, your password, you&#8217;re more likely to do it. But if someone calls up and says, Hey, I&#8217;m with you know, National Financial Services and there&#8217;s a problem with your IRA, you&#8217;re gonna think, well, wait a second, you&#8217;re not my advisor. I need to call and talk to my advisor about this. There&#8217;s just one more step there that would trigger an alarm that something is fishy, and I&#8217;m surprised how often it happens with people and their checking and savings. I have never heard of someone having their IRA hacked and completely liquidated. I&#8217;ve never heard of it, but I hear it all the time, and it&#8217;s really sad. I hear it with checking and savings. So that&#8217;s another thing to be thinking about. There&#8217;s a reason, from a fraud standpoint, why we wouldn&#8217;t want a bunch of money in our checking and savings.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">James Derrick 13:05<br>That&#8217;s an interesting point, and it paints a picture of a financial advisor as a bodyguard.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Jordan Hadfield 13:09<br>Exactly, that&#8217;s we often refer to ourselves as financial bodyguards. Yep, exactly. That&#8217;s our job.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">James Derrick 13:15<br>One, one more question before we end. What about the people who maybe you think they have enough money they ought to be investing, but they really don&#8217;t want to be taking that kind of risk. What are the options for them? Is it all in or all out? Or is there<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Jordan Hadfield 13:30<br>This is<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">James Derrick 13:31<br>a place for them, too.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Jordan Hadfield 13:32<br>A fantastic question, James, and I&#8217;m so glad you asked it, because oftentimes people think I either put my money in the stock market or I keep it in my savings account. I either take a tremendous amount of risk, or I take no risk at all. And this is not accurate. There are a million different types of investments that we can put our money in that is very, very conservative, up to very, very aggressive, and everywhere in between. So if there is someone who&#8217;s feeling like, you know, I just am not in an emotional place or a physical place where I can take that kind of risk, there are a number of places that we can put it that&#8217;s going to do better than your savings account and not take on a lot of risk. Again, we&#8217;ve talked about some of them already. Money markets, CDs, high yield savings, you know, very ultra short-term bond funds. There&#8217;s a number of different things that we can utilize and not take a lot of risk. And for clients who&#8217;ve got money that need liquidity and aren&#8217;t exactly sure when they&#8217;re going to use it and they don&#8217;t want to take a lot of risk, there are a lot of options, and that&#8217;s my job is to help people find what options best fit them individually.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">James Derrick 14:41<br>I really appreciate your perspective and your time. Thank you for coming in Jordan.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Jordan Hadfield 14:44<br>Yeah. Thank you so much James. Good to talk to you.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Shane Thomas 14:52<br>Thank you for joining the Power Up Wealth podcast. Smedley Financial is located at 102 S 200 E Ste 100 in Salt Lake City, UT 84111. Call us today at 800-748-4788. You can also find us on the web at Smedleyfinancial.com, Facebook, Instagram, Twitter, and LinkedIn. The views expressed are Smedley Financials and should not be construed directly or indirectly as an offer to buy or sell any securities or services mentioned herein. Investing is subject to risks, including loss of principal invested. Past performance is not a guarantee of future results. No strategy can assure a profit nor protect against loss. Please note that individual situations can vary. Therefore, the information should only be relied upon when coordinated with individual professional advice. Securities offered through Osaic Wealth, Inc., member FINRA\/SIPC. Investment advisory services offered through Smedley Financial Services, Inc.\u00ae Osaic Wealth is separately owned, and other entities and\/or marketing names, products, or services referenced here are independent of Osaic Wealth.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-wp-embed is-provider-smedley-financial-blog wp-block-embed-smedley-financial-blog\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"wp-embedded-content\" data-secret=\"3D8pXWipi5\"><a href=\"https:\/\/smedleyfinancial.com\/wp\/savings-accounts-dont-make-cents\/\">Savings Accounts Don\u2019t Make Cents<\/a><\/blockquote><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; visibility: hidden;\" title=\"&#8220;Savings Accounts Don\u2019t Make Cents&#8221; &#8212; Smedley Financial Blog\" src=\"https:\/\/smedleyfinancial.com\/wp\/savings-accounts-dont-make-cents\/embed\/#?secret=NWR6FkRJlZ#?secret=3D8pXWipi5\" data-secret=\"3D8pXWipi5\" width=\"600\" height=\"338\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Power Up Wealth podcast \u2013 Episode 92 \u2013&nbsp;Savings Accounts Don&#8217;t Make Cents James Derrick 0:00Yields on many savings accounts are up, but if you have a significant amount of money&#8230;<\/p>\n","protected":false},"author":1,"featured_media":2047,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[691,565,564],"tags":[610,66,687,90,686,558,62,477,173,567,566,464],"class_list":["post-3986","post","type-post","status-publish","format-standard","has-post-thumbnail","category-691","category-podcast-2","category-podcast","tag-banks","tag-cds","tag-credit-unions","tag-financial-planning","tag-high-yield-savings","tag-interest-rate-risk","tag-interest-rates","tag-jordan-r-hadfield-cfp","tag-lifetime-income-planning","tag-podcast","tag-power-up-wealth","tag-savings-account"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/smedleyfinancial.com\/wp\/wp-json\/wp\/v2\/posts\/3986","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/smedleyfinancial.com\/wp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/smedleyfinancial.com\/wp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/smedleyfinancial.com\/wp\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/smedleyfinancial.com\/wp\/wp-json\/wp\/v2\/comments?post=3986"}],"version-history":[{"count":3,"href":"https:\/\/smedleyfinancial.com\/wp\/wp-json\/wp\/v2\/posts\/3986\/revisions"}],"predecessor-version":[{"id":3993,"href":"https:\/\/smedleyfinancial.com\/wp\/wp-json\/wp\/v2\/posts\/3986\/revisions\/3993"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/smedleyfinancial.com\/wp\/wp-json\/wp\/v2\/media\/2047"}],"wp:attachment":[{"href":"https:\/\/smedleyfinancial.com\/wp\/wp-json\/wp\/v2\/media?parent=3986"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/smedleyfinancial.com\/wp\/wp-json\/wp\/v2\/categories?post=3986"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/smedleyfinancial.com\/wp\/wp-json\/wp\/v2\/tags?post=3986"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}