This Is Why It's So Important to Have a Cash Cushion

This Is Why It's So Important to Have a Cash Cushion

While it is important to make surethat you have an emergency fund,you also need to have a cash cushion.A cash cushion is a set amount ofmoney you keep in your bank accountto protect yourself from overdraft fees.The amount that you keep for a cashcushion in your checking will vary.The better you keep up with your budgetand check on your account, the smalleryour cushion needs to be.When you determine your budget,you should factor in what amountwould work as your cash cushion.It's also a good idea to think about thoselittle unexpected expenses such as gasfor your car or last-minute groceries.Note that a cash cushion is not the sameas an emergency fund, which is a largeramount meant for use only in emergencies