genkibeam.net » reserve http://www.genkibeam.net The Financial Advice Sat, 27 Nov 2010 06:32:42 +0000 http://wordpress.org/?v=2.8.6 en hourly 1 The Importance Of Reserve Fund http://www.genkibeam.net/settlement/the-importance-of-reserve-fund.html http://www.genkibeam.net/settlement/the-importance-of-reserve-fund.html#comments Mon, 13 Apr 2009 06:29:46 +0000 fitri http://www.genkibeam.net/?p=185 bu005895Often happens in life a matter of emergency that requires immediate funds in time. For example when you are dismissed from your office , so must take the funds to pay for life was still not get a job.
That is an example of ‘big’. Small example may be when your child is sick and must be treated in the hospital that may require funds.But usually often happens, many people who do not have reserve funds. This happens because every time they get income, they always spend all their income. That is, someone who has dismissed usually get money from their office. This money could not work during his life. However, the size of the money often felt inadequate for those who get it.

So,don’t need to say again, it is important have a supply of funds in your account, which can be used as a reserve fund to pay for your life when something happens. Therefore, the supply of funds is called the Reserve Fund.

Large of Reserves Funds needed
Reserve Fund amount needed depends of how much you spend each month, and how your earnings stable.

For example, if you are working and earning (in the form of salary) to $2000 per month, and have expenditures of $1500 per month, you need number of Reserve Fund of three to six months of you. This means, you must have a reserve fund of $4500 up to $9000 in the bank account as you must supply when you are lost revenue.

However, if the income you get is not stable, such as the amount of commission is not fixed, the amount of reserve funds that I recommend is 12 months of monthly expenses. This means that if you spend up to $1500 per month, you must have a reserve fund of $1800 in the bank account. So in essence here, the greater risk of not working in your income, the greater amount of reserve funds should you have.

Where is the Reserve Fund should be stored?
The question now, where you must put your reserve fund? There are two categories that must be fulfilled as a place to store the Reserve Fund:

1. Secure (You will not lose money and the amount is not reduced)
2. Liquid (you can pick it up at any time without penalty imposed).

Of course, the deposit is a safe place for your money, because the amount of money that you enter will not be reduced. However, the deposit is not liquid because you can not pick it up except when already mature. If not mature, then you will get penalties when you take the money.

There are only four places that you can use to store your Reserve Fund:

1. Your cupboards
2. Savings in Bank
3. Reserve Bank in
4. Mutual Funds in Money Market

However, when you feel your Reserve Fund amount is large enough, it may be nothing to enter in some deposits, provided that the period of maturity which is not too old, that is one or three months.

Do not Own Too Many Funds Reserves

The amount Limit of your reserve funds up to 12 months your monthly expenditure.why? because the Reserve Fund will be saved in your place will give low interest rate, or in a place that does not generate interest at all (save that in the cupboard). So, if you have the amount of reserve funds that are too large, then this means some of your funds will not be productive.

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