I was reading an article today that mostly revolved around how you shouldnâ€™t try to grow too fast in a business as it can create financial obstacles. It then talked about how you should always expect the worst as well and to make sure that you are financially prepared to go through periods of limited income flow.
This made me think about personal finance too in terms of how much funds people usually establish to consider it as their safe nest encase something happens. Some people call it their emergency funds. Most people that I talk to seem to think between $2000 to $5000 is the good base to go by.
For some reason I tend to just be general and say that a good safe nest is about five times the amount of essential expenses that you pay per month. In most cases I also still use the mentality of if you canâ€™t payout the expense right now if there was say a yearly contract to it then I tend to not do it. Thatâ€™s one way to help ensure that income flow wonâ€™t be an issue in terms of creating a debt regardless of what happens to you financially.