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How Much Cash Should You Have On Hand?

There are two problems when it comes to having cash on hand:

1. If you carry too little of cash, you are inviting emergencies by not having cash to be able to insulate yourself for any issues that may happen. You do not want to add a debt problem while in the midst of tackling an existing issue the issue as soon as possible.

2. However, if you carry too much cash, you gradually lose to inflation. Everything you buy today will cost progressively more each year. Over 25 years, you can expect the cost of everything to double. As your money sits in an account there is a gradual change over time, decreasing its value so you can buy less and less each year.

Tele(k) #21 Summary
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