The High‑Yield Savings Ladder (Beginner’s Guide to Parking Cash)

What is a savings ladder?

• A simple way to organize cash by time horizon
• Keeps “bill money” separate from “goal money” and “oh‑no money”

The three buckets

• Bills (0–30 days): checking + 1 month in HYSA
• Buffer (1–6 months): emergency fund in HYSA
• Goals (3–18 months): separate HYSA sub‑accounts (travel, gifts, car)

Where to open accounts

• High‑yield savings (FDIC/NCUA) with easy external transfers
• Use nicknames/sub‑accounts so you see goals at a glance

Automate the flow

• Paycheck → checking (bills) + weekly auto‑transfers to buffer + goals
• Windfalls (refunds, bonuses) → buffer first, then biggest goal

How to use it day‑to‑day

• Bills come from checking
• Irregular expenses: pull from the matching sub‑account
• Emergencies: tap buffer only, then refill next month

Common mistakes

• Keeping too much idle in checking (no yield)
• Pooling all savings in one blob (hard to track)
• Raiding goals for random wants (name accounts clearly)

Quick start

• Open one HYSA and create 3 sub‑accounts: Buffer, Travel, Gifts
• Set $25–$75/week to Buffer; $10–$30/week to Travel
• Revisit in 30 days — increase or shift based on what you learned