or… ”Cash really IS King

When it comes to financial advice or personal management nothing is quite so uninspiring as talking about cash management… budgeting and managing bills and so on. Other than perhaps talking about “emergency funds” – or cash that you put to one side and don’t let yourself spend. That is even less fun to talk about, let alone do.

But it is such a smart move to do. The smartest money managers and wealthiest people know that they need to keep “cash” no matter how what their net worth is. An “emergency fund” that can cover three to six months of living expenses can be a lifesaver in times of uncertainty — a sudden job loss, a natural disaster, illness of a family member, for anyone self-employed or another unforeseen “challenge”.

1. You’re covered if you lose your job

Unexpected job losses are by nature a surprise. We didn’t see them coming, and sure didn’t plan for them. Even good employees in a seemingly secure position are not immune to downturns in business or bad decisions by the business owners or managers.

Depending on your line of work it could take weeks or months to find a new position. An emergency fund will allow you to stay financially stable during that time as you search and interview. Without this fund, you’re likely to over-use your credit cards or other debt and rack up high interest debt as you struggle to pay the bills without a steady income.

2. Natural Disasters

We’ve seen them a bit in recent years in this country, and when they happen disruption is a way of life. Even if your job is “secure”, that doesn’t mean the business you work for is able to generate revenue and pay its staff for a period of time. And with natural disasters come additional and totally unexpected costs. Cash truly is king in such times.

3. It’s a “Stress Reducer” for the self-employed

If you are your own boss, then it’s even more important to keep a healthy emergency fund. Since your income is variable, you’ll need something to draw on during lean months if necessary. Loss of a steady client or late payments can throw the best laid plans and honest toil out the window. And there are not too many things more stressful than running a business with no money.

4. Unexpected bills won’t derail you

Even the best budgeters and planners sometimes forget about or miscalculate large expenses or get caught out by someone else’s illness or financial issues and have to help out. By having a good -sized fund which is readily available and easily accessible, you’ll be able to react at a moment’s notice.

That is good financial planning.