Build Your Cash Cushion

What do you call your “extra” money?

It’s not a trick question. Or the lead-in line for a joke.

We’ve heard it called the F-U fund (John Carlton), survival money, “walk away” money, and a “rainy day” fund.

Dianna Huff calls it a cash cushion. And, if you do nothing else with anything she shares this month… if everything else I put in this newsletter goes in one ear and out the other… just remember the cash cushion.

It’s a bucket of money designed to keep you and your writing business afloat when revenues aren’t keeping up with expenses. Unlike long-term savings, it’s expected that the size of your cash cushion will ebb and flow throughout the year, drawn down when you need it and plumped up when you’re flush.

The key is that your cash cushion keeps you from being caught with nothing in the bank when you have a business bill to pay. Or, if you’d like to break with your existing clients to explore new skills… attend a live event… or simply take a few weeks off for family time, rest, and recuperation… a cash cushion gives you the freedom.

Only you can say how much money needs to be in your cash cushion to shield yourself from variations in your personal income and your expenditures. But, with the tools Dianna shares in her guest writer’s series, you’ll have a clear roadmap for how to build a cash cushion of your own, and there’s no time like the present to get one started.