How much liquid assets should you have?

How much cash should you actually keep on hand?

A good starting point is an emergency fund covering around three months of essential expenses.

Not lifestyle spending. Not holidays. Just the costs you need to cover if life throws you a curveball.

Having this buffer can provide breathing room if you lose your income, face an unexpected expense or experience a major life event. It may also help prevent you from having to sell investments or assets at the wrong time.

It’s also worth checking your income protection cover and understanding the waiting period attached to your policy. Many people choose to align their emergency fund with their income protection waiting period so they have a financial safety net in place while waiting for benefits to commence.

Financial security isn’t just about growing wealth. It’s also about having a plan for the unexpected.

General advice only.

Amy Lehmann is an Authorised Representative (No. 1292710) of Consortium Private Wealth Pty Ltd (AFS Licence 495401).

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