About your Cash Stash…
Cash reserves, or liquid money, represent a designated amount of funds, set aside for a specific upcoming purchase, or to meet unforeseen emergencies requiring a financial solution.
At the beginning of the calendar year, it is good practice to review your liquid accounts and make the necessary adjustments to both your personal, and business account reserves. Typically, I recommend 3-6 months of life’s expenses, held in a cash vehicle. This account is typically a money market account, or can also be invested in treasury bills. Examples of the expense categories include rent, mortgage, food, insurance, and any other need and liability based categories.
If you have saved beyond this dollar amount, you’ll need to advance to the next level of independence planning. If you haven’t managed to save this amount, go back and review your cashflows, examine your expenses, and see what needs amending.
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