When times are tough, like they have been for the past year or so, you have to look for every way you can to increase your personal earnings. My sister emailed me today with a great offer from one of her banks. For each person she refers to the bank who opens a free checking and savings account, she gets $25 added to her account and the person she refers gets $50 added to their checking and $50 to savings. You have to agree to online banking, but otherwise there are few restrictions to the offer. I decided to take $300 from my emergency cash reserve in my passbook savings and open a checking and savings account with her bank. In addition to the $100 they pay within 3 days of opening the accounts, I'll also receive double the going interest rate on savings for the next 6 months. So I'll actually be making more than a 33% return on my original investment. This is money I keep close at hand that has been earning very little interest. Now I'll be able to make a quick $100 and earn twice the interest on any money I deposit into this account for the next 6 months.
O.K., so maybe you're saying it's only $100, but I'll be doing next to nothing to earn it! If you start thinking of ways to increase your income without increasing the amount of physical labor you personally perform, that's when you truly begin to do what rich people do. When you get good enough at doing what rich people do, you eventually become one of the rich people.
Showing posts with label emergency fund. Show all posts
Showing posts with label emergency fund. Show all posts
Thursday, July 8, 2010
Thursday, March 11, 2010
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.
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.
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