FALLING IN TO CASH!

I wrote about my trip to the casino last month and how I lost $50 dollars on penny slots, but this month things are really looking up.  It's only the 4th and I have all my bills paid except my phone bill, which runs around $50 per month.  I'm sitting on about a months worth of cash in my bank account and I get paid from work tomorrow.  Also picked up a contract for a carpet cleaning job that will take me about 2 hours and pays $100.  On top of that, I sold a couple of silver coins on ebay for $70 and the listing only lasted about an hour before someone took the buy it now option, so it was a quick sale with immediate payment. 


As if that weren't enough, I recently took some cash out of my money market account from stocks I'd just sold.  Just wanted to have extra on hand for maintenance work on my car.  As it turned out, I didn't need the money after all so I transferred it from checking to savings to boost my cash reserves.  In the mean time, the stocks in my regular investment account went up and are now worth more than before I took out cash.  Have you ever heard that expression, "They just fall into money?"  I'm beginning to feel like it's happening to me.  It's a nice feeling.  But the truth is, what seems like a run of extremely good fortune is really more the result of taking control of my finances, creating a plan and sticking to it. 

Sure is nice to see some progress for a change.  Especially after the last couple of years.  It's also nice to know that even though I don't feel very secure in my new job and my earned income is well below what I'm used to making, I'm still making progress towards financial freedom by actively managing my finances.  I feel much more confident that no matter what obstacles the future may hold, things will turn out all right in the end.  It really boils down to managing what you do have and not worrying about what you don't have. 

HOW MUCH CASH SHOULD YOU HAVE FOR EMERGENCIES?

In my last post, I talked about my plan for building up my cash positions. While I'm wanting to have a little more cash on hand due to ongoing economic turmoil, I'm not really putting aside money to add to my emergency fund. I've heard a lot of people ask just how much they should keep in cash for emergencies and from my personal study, the consensus seems to be 3 to 6 months worth of living expenses in cash or cash equivalents.

However, I'm the type of investor that likes to see my money earning as much as possible. I do keep some cash on hand in a regular passbook account and an interest bearing checking account, but I don't keep no where near 3 to 6 months worth of expenses. When I lost my job at the first of last year, I only had a little over $1,000 in the bank. That proved to be a sufficient amount to see me through until my unemployment started and I not only managed to get by, but I also continued adding to the investments in both my regular stock account and my IRA on a monthly basis. Everyones' finances are different, so it's really what you would feel comfortable with. I personally think 3 months worth of expenses should be tops for emergency cash, but truthfully it's what makes you feel comfortable. How much do you need in cash on hand so you can get a good nights sleep? That's what you need to ask yourself and then set a goal to put that money aside for a rainy day.