The #1 Money Mistake I See Tech Employees Make
One of the biggest (and most common) mistakes I see among people working in tech is holding too much cash.
Yes, cash is important—for emergencies and upcoming big-ticket expenses like travel or home repairs. But at a certain point, excess cash isn’t helping you. In fact, it’s probably hurting your long-term finances.
Why Does This Happen?
This usually shows up when you’re making great money, but not putting it to work.
You might be:
Maxing out your 401(k), but skipping your Roth IRA or HSA
Only contributing enough to get your 401(k) match
Paying for medical expenses out-of-pocket even though you have an HSA
Letting leftover cash build up in your checking or savings account month after month
Over time, a few thousand dollars in monthly surplus can quietly grow into far more cash than you actually need, without earning a meaningful return or helping you reach your goals.
How Much Cash Should You Hold?
The classic rule of thumb is to hold 3–6 months of living expenses in cash for emergencies. That’s a solid starting point, but here’s how I help clients tailor that rule to their real lives:
Add any large upcoming expenses
If you’re planning for a big purchase or expense in the next two years (a vacation, home project, new car), that cash should be ready and waiting, not invested in the market.Adjust for your comfort level
If 3 months of expenses feels too lean, keep 6 months or more. If job security is shaky or your income is highly variable, bump it even higher. Your emergency fund should help you sleep at night, not add stress.
What to Do If You Have Too Much Cash
Step one: Understand your cash flow.
You need to know what’s coming in (salary, bonus, equity) and what’s going out (living expenses, taxes, savings). Without knowing this, it’s hard to know how much you should have in cash and how much is extra.
Step two: Redirect your savings.
Once you’ve nailed down your ideal emergency fund, look at the rest of your financial picture. Are you taking full advantage of tax-advantaged accounts? Are you building wealth in a way that gives you flexibility and long-term growth?
Check out this blog on where to save next to help you decide.
Step three: Put your extra cash to work.
Once you’ve built your ideal emergency fund and optimized your savings strategy, think about what you actually want to do with that extra money:
Take a trip you’ve been putting off
Fund that renovation you’ve been dreaming about
Invest in a taxable brokerage account to grow long-term wealth with flexibility
Whatever you decide, you’ve run the numbers, made a plan, and put your cash to work—instead of letting it sit idle.
Final Thoughts
This is hands down the most common financial mistake I see tech employees make and it’s one of the easiest to fix.
Getting your cash working for you (instead of collecting dust) can significantly improve your long-term financial health and give you more control over your future.