Financial Cushion

What would happen if you lost your job? Would the bank foreclose on your house? Would you get evicted from your apartment? Could you afford to keep the utilities on? How long could you afford groceries? What would happen if you got hit with a big bill for an unexpected expense? If you are on solid financial footing ...  you can bear the burden of a short term loss or major unexpected expense because you are prepared for it. 

For example could you afford to replace a failed transmission in your car. If such an unplanned expense would throw your life into disarray, it's time to take a hard look at your present lifestyle. While you may be doing fine today ... if a single expense is all that stands between you and financial disaster, now is the time for action. 

Creating an emergency fund is a critical part of sound planning. Putting several months' worth of income in the bank so that you have it on hand should you need it, provides an essential cushion for unexpected events or a temporary halt to you income.

                                                                                                   

                                       Roger L. Caron