You know what they say, it’s not about the motion of the ocean. ❌🌊 It’s about the cushion for the pushin’! Wait…that’s not how it goes…🥴
Anyway, speaking of cushions, padding your checking account around the edges could be a game changer for your finances. ✅ Check out these top tips and tricks!
Here’s Five Fast Facts on how to build a cash cushion:
- 💵 Lean, Mean, and Green - If you’re living paycheck to paycheck, you’ve got company. According to a recent survey, 57% of Americans are, too - and it’s not just low income folks. Roughly 24% of six-figure earners live paycheck to paycheck. Regardless of your paycheck’s size, when you’re living lean, even a small unplanned expense could be a big disaster.
- 👛 Padded Walls - To help ease financial stress, building up a cash cushion is a smart move. While people tend to sock a large chunk of money in their emergency funds, a cash cushion is a smaller surplus you leave in a bank account to pad around the edges. Think: $100-$200 extra to cover small emergencies.
- 🧮 Baseline Basics - To start building a cash cushion, first take stock of your essential monthly bills (rent, utilities, groceries, gas). Pop open your bank statement from last month to get your full spending picture. Once you have the data, determine your customized cushion amount.
- 🛟 Savings Lifesaver - Cash cushion rule of thumb: park it in the bank account you use regularly to pay bills and buy essentials. Pro tip: take advantage of your bank’s alert features. Set up automated texts whenever your account creeps below a certain balance (not zero). Keep your cushion…cushy and avoid those pesky overdraft fees.
- 🐢 Slow and Steady - Don’t have the cash for a cushion? Don’t panic. Even moving just $10 or $20 a week adds up. Set up automatic transfers and you’ll never miss it. You could also sell some old items or pick up a side hustle to pork up that piggy bank in no time.
🔥Bottom line: Saving any kind of extra cash might seem like a tall order these days. However, you don’t have to shoot for the moon right away! Baby you can do it, take your time, do it right, you can do it bay-bay. 🎶 If you’re a lucky member of the sandwich generation, saving your pennies is probably hard AF. Check out this article where we breakdown how caretakers cope with kids and aging parents.
Are you sitting on a cash cushion?
Let us know by connecting with us on Facebook and Instagram! Also, remember to share this newsletter with your friends & coworkers!
Btw, If you’ve read this far and haven’t yet signed up for the weekly Paycheckology newsletter, CLICK HERE!
