Is a Cash Analysis Necessary?

It is often assumed that having three months worth of income will be enough to get most people through a rainy day.  Well, that might not be the case anymore as times have changed greatly.  The unemployment rate continues to increase as the number of companies laying off people grows daily.  With this in the back of most Americans minds, it is only human nature to wonder just how long we would survive without our current job. 

The only way anyone can figure out just how much money they will need to survive is to do a cash analysis.  To do this you will need to sit down with a pen and paper and write down every single expense you incur during a month long period.  A lot of people tend to forget some expenses so to help you out, it is good to get your financial statements from the previous month.

There will be some expenses that do not occur monthly like getting new tires for your car.  You need to be aware that these are expenses that could come up when you are out of a job so it might be good to put them into your cash analysis.  After you have completed each expense, it is always good to add about ten percent to that total because the costs of goods and services is likely to go up in the very near future. 

After you complete your cash analysis it is wish to write it down and make it a goal to get to that mark before spending any other money.  If you can reach a six month cash analysis goal you are doing much better than most Americans.