Keep your investments in these 3 accounts, CFP says: 'If you have too much cash, you're actually losing money'

The earlier you invest, the more time your money has to grow. But figuring out the exact accounts to use can feel overwhelming.

After setting aside money to cover daily expenses in a checking account and three to 12 months of expenses in a savings account, you should start looking into putting any additional income into three different investment “buckets,” says Jaime Bosse, a certified financial planner and senior advisor at CGN Advisors in Manhattan, Kansas.

“If you have too much in cash, you’re actually losing money to inflation,” Bosse says. “Any extra dollars you have should be invested in growing for the future.”

With three investment accounts, you’ll have more flexibility to tap your money when you need it and more control over your tax bill now and later because each “bucket” offers different benefits, Bosse says.

How to best allocate your money across the different types of accounts will vary based on your income and situation, she says, but the bottom line is you should be using them to your advantage. Be sure to speak with a trusted financial professional for individualized advice.