Financial Expert Advises Keeping 6 Months of Cash on Hand

Carrie Coghill Kuntz, Financial Expert   

you need 6 months of cash financial experts advice

With U.S. Bureau of Labor statistics showing the loss of an additional 263,000 jobs in September and an increase in the national unemployment rate to 9.8 percent, the country has been put on notice that the job market is rebounding more slowly from the recession than other segments of the economy.

Carrie Coghill Kuntz, financial expert for CreditFYI.com, a leading website that educates consumers on consumer credit and fraud, advises consumers and workers to be cautious as the economy continues to recover.

Kuntz suggests the following three rules to help manage your financial life in uncertain times:

  • Rule #1: Know where you are spending your money. According to Kuntz, "Most people do not know exactly where and how they spend their money. I have seen this with wealthy people as well as with people of modest income. Less than half can tell me exactly how their paycheck is allocated. Most people think budgeting restricts your lifestyle — yet, it is actually liberating. It also enables people to put away money for a rainy day."
  • Rule #2: Build cash reserves. "If you do not follow Rule #1, you will never have a chance to put some money away to build cash reserves," says Kuntz. "People should pay themselves first by putting part of their paycheck right into a savings account."
  • Rule #3: Understand the timing of due dates on bills. "This is critical to managing your financial credit scores," explains Kuntz. "If you know when bills come due, you can pay them on time, which will help maintain your credit rating. You can also negotiate due dates with your creditors. For example, if you're paid on the 15th and your electric bill comes due on the 10th, ask the utility for a different billing cycle. This is key to cash flow management."

Kuntz notes that even though the pace of U.S. job losses slowed in August, the unemployment rate for the month hit a 26-year high at 9.7 percent. And the underemployment rate — which includes part-time workers who'd prefer a full-time position and people who want work but have given up looking — reached a record 16.8 percent.

According to Kuntz, now is not the time for workers to become complacent. "While the economic storm is starting to slow, it has not ended," she concludes. "The reality is that we will not see a turnaround in the job market until 2010. It means there is only one thing workers can bank on — six months of cash in their savings account."

About Carrie Coghill Kuntz
Carrie Coghill Kuntz is a contributing editor and spokesperson for CreditFYI. Carrie is also a co-author of "The Newlyweds' Guide to Investing & Personal Finance" and "What's Your Investing IQ," as well as a contributor to "Getting Started in 401(k) Investing." She is one of the nation's leading experts on personal finance.

About CreditFYI.com
CreditFYI.com informs and educates consumers on a wide range of credit and debt issues, personal finance topics and identity fraud concerns. Designed to empower consumers to take charge of their household finances, CreditFYI distills the often complex financial issues that affect consumers' daily lives into informative, easily-understood content that helps consumers make informed decisions and improve their money management skills. For more information, please visit www.creditfyi.com.