Financial expert: Don't hoard cash

Some women are standing in their own way when it comes to investing, according to one financial planner. Cary Carbonaro says some women are successful but have serious fears about money. So when they get it, they hang onto it and they don't grow their wealth.

As a financial planner and author of "The Money Queen's Guide," Carbonaro has helped a lot of women with their finances. She says most of us are making the same classic mistake: keeping too much of our savings in cash.

She says women are more conservative than men when it comes to financial planning and investing, so they tend to hoard cash. She says she has to remind women that cash depreciates (inflation, taxes) so if you hold onto it for too long you actually lose money.  

So what to do with the money in the bank? If it's money you need access to in less than five years, keep it out of the markets, but put it in an account that will generate a little more interest. That is tough to do in this low-interest rate economy.

Carbonaro says take a look at savings accounts, money market accounts, and laddered CDs with the best rates you can find. The return is relatively low, but all are FDIC-insured, stable, and 100 percent accessible if you need the money fast.

But for a long-term goal -- something you don't plan on touching in the next five to 10 years -- your money needs to go into the market.

So if you are saving to buy a house soon, that would be cash. But if your goal has a long time frame, such as retirement or college education fund for your children, then you need to invest your money.

So realistically how much should you keep in cash---for your emergency fund? The conventional wisdom is three to six months. But Carbonaro says she pushes most of her clients to aim for 12 months, if possible. But remember: that is money you need to be able to access in an emergency, so keeping it in cash is okay.

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