Where Can I Find Extra Cash?
Christine Benz discusses the best and worst places to look for needed funds.
|Editor’s note: Read the latest on how the coronavirus is rattling the markets and what investors can do to navigate it.|
Christine Benz: Let's get right into a question that has been coming up a lot these days, and it's about where people who have suffered an income disruption or maybe some sort of an income shortfall, maybe their hours have been cut, where they can turn for cash if they need it. The obvious answer to this question is that you should have an emergency fund that equals three to six months' worth of your living expenses. You should have that in nonretirement accounts, so you can tap it without penalties, and you should keep the money really liquid, meaning that you can access it without disrupting your long-term investments. The problem is three to six months' worth of living expenses is a heavy lift for a lot of people, and many people simply don't have that type of cash cushion lying around. So the question is: If your cash cushion is depleted, what's your next best source of cash?