A basic step in almost any financial plan is to save cash and hold it in a savings account for an emergency. I think we would all agree this is a good idea.
This is a form of insurance. We pay money for life, health and disability insurance. These COST us money.
Holding cash in a savings account COSTS us too. We could be doing more “productive” things with that cash such as investing it or buying fun stuff with it.
But the peace of mind cash brings and the protection from the unexpected it provides is worth the COST!
So, the next time you’re tempted to use your cash reserve for something more “productive”, remind yourself that you are paying for insurance!
Keep paying your life insurance premiums, and keep your cash in the bank!