In 2025’s macroeconomic backdrop of elevated inflation, saving can be difficult. Other financial needs may take priority. However, Americans already have 2026 on their minds, based on consumer survey results from Vanguard.

According to the survey results, 84% of respondents currently build cash cushions via two avenues. One is stuffing cash into an emergency fund while the other is building a savings account for short-term cash needs through a high-yielding instrument.

The results also revealed that different generations focus on their own respective cash needs. Nonetheless, just over 80% feel somewhat or very confident that they will realize their financial objectives in the new year.

“Americans are focused on building emergency funds and saving for short-term goals, and they need information and tools to make smarter savings decisions so they don’t fall short of their resolutions,” said Matt Benchener, managing director of Vanguard’s Personal Investor business. “Use the end of the year as a time to reset. Americans should take a close look at where they save to ensure they are earning the returns they deserve. A high-yielding savings vehicle, like Vanguard’s Cash Plus Account, can earn more than eight times the average interest of a traditional bank savings account.”

Additionally, another option for maximizing cash is through bond exchange-traded funds (ETFs), particularly of the short-term variety.

Using ETFs for Cash Needs

“Investment” in financial vernacular often translates to allocating towards long-term horizons in order to yield a return, via liquid investment vehicles like stocks or illiquid variants like real estate. In the short-term horizon, to meet future cash obligations, investments can be made in money market accounts, Treasurys, or certificates of deposits (CDs) to name a few.

What investors don’t want to do is simply stay on the sidelines with cash, especially with a plethora of high-yielding instruments at their disposal. Staying in cash may seem like a zero risk proposal. However, one might be missing out on the opportunity cost of earning a return via short-term bond ETFs. ETFs have inherent advantages such as liquidity, tax efficiency, and cost-effectiveness.

Prime options that should receive consideration include the Vanguard 0-3 Month Treasury Bill ETF (VBIL), Vanguard Ultra-Short Treasury ETF (VGUS), Vanguard Short Duration Bond ETF (VSDB), and the Vanguard Short-Term Bond Index Fund ETF Shares (BSV). VGUS, VBIL, and BSV offer indexed exposure to bonds with short duration. That makes them cost-effective solutions with their low expense ratios. On the other hand, VSDB brings short-term bond exposure through an actively managed strategy. That strategy allows the Vanguard Fixed Income Group to adjust the fund’s holdings according to current market conditions.

Click here to learn more about how short-term bond ETFs can assist you with meeting your future cash obligations.

For more news, information, and strategy, visit the Fixed Income Content Hub.