Do you appreciate your cushion?

By Sheila Walsh, CFP®

Thinking or doing?


On the one hand, if you only think and never act, you might spend a lifetime on the couch. On the other hand, if you only act without thinking you might end up in jail. 


We need both thinking and doing in our lives. Often, it’s when we put our insights into action that we truly get clarity. Some things have to be experienced directly to be fully appreciated and understood.


There’s a fantastic ride at Disneyland called Soarin’ Over California. If you’ve been on the ride, you know Disney nailed it. After strapping into the simulator, you take a tour of Cali from high in the sky. Not only do you see the twinkle lights of Hollywood, but you feel the mist of San Francisco fog and the smell of oranges hits your nose as you soar above citrus groves.


It’s truly an experience of the Golden State! And it’s exhilarating. 


That’s what action does. It motivates us, it inspires us, and it sparks energy. It shows us what’s possible. 


When we’re anxious about a decision and we act, we often get immediate clarity. Ever considered painting a room, tested the color you’ve been eyeing for weeks only to realize it hurts your eyes? If so, then you know….action brings clarity.


A common financial worry is the possibility of not having enough money to live the life we want. Balancing expenses and longer-term savings goals can be challenging and sometimes this question comes up: 


Do I really need an emergency fund? 

The answer is always the same…YES! YES! YES!  


Having a cash cushion (or not having one) has significantly impacted the experience of so many people during the pandemic. 


Regardless of whether you call it a rainy-day fund, emergency fund or cash reserves – having money set aside for unexpected expenses or life curveballs is essential for everyone.  A general rule of thumb is to have enough funds to cover 3-6 months of your expenses - although everyone’s situation is different.

I’ve heard people balk at this concept, but I can assure you that the experiences of those who were able to dip into their dedicated cash cushion accounts during the past few months and those that had to turn to loans or debt has been vastly different. 


Consider keeping your cash reserves in a dedicated account so you’re not tempted to use the money for other purposes.

Make sure the funds are easy to access quickly. 

You CAN experience the peace of mind that comes with knowing you have an adequate cash cushion. Having one when you need it can bring financial security and having one when you don’t need it can bring serenity. 


Make a commitment to yourself that you’ll examine your cash reserves this week. 

If you find you’d be more comfortable with additional cash set aside, build a plan that will bring you to your goal. If your reserves are mixed in with money earmarked for other purposes, fill out an application for a dedicated account. 

Take action and feel your financial confidence and momentum build!

Take the First Step Today!

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