Cushion against unexpected.Most Americans won't won't Contraction of will not. won't will not won't will be laid off. Of the unlucky few, most will find a new job fast. Still, you never know when the moving finger might tap you on the shoulder. If not a layoff Layoff 1. When a company eliminates jobs regardless of how good the employees' performance. 2. A risk reduction, made by investment bankers, that minimizes the potential downside associated with a commitment to purchase and sell a stock issue unsubscribed by stockholders holding , some other emergency might turn up. An auto accident. A medical problem. Slow-paying clients, if you're you're Contraction of you are. you're you are you're be self-employed self-em·ployed adj. Earning one's livelihood directly from one's own trade or business rather than as an employee of another. self . That's why planners always advise you to keep a cushion Cushion In the context of project financing, the extra amount of net cash flow remaining after expected debt service. cushion See call protection. of quick cash. You don't want to have to murder your credit lines to pay essential bills. If you think of this as layoff planning, so be it. It can help you through any tough situation that comes alone. A couple tips: * Save money. You should be able to get through at least three months without pay. Six months would be better. Nine months, if you're self-employed. So go over your budget and figure out how to save more. * Understand your priorities. People are often confused about where to put the limited sums they can save. So I polled some planners and developed with them the following consensus: First, build an emergency cash fund. Second, if you have high-rate credit cards, build a more modest cash fund -- say, worth just six week's pay. During that period, pay the minimum on the cards. Cash is always a priority, even before making faster payments on your card. |
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