Tips for Setting Up a Cash Reserve

Posted by: Rod Kurtz on October 13, 2008

If you’re looking to generate a cash reserve, the most important thing is to create a habit of saving each week. Start by adding up all your monthly expenses, so you know what a month of expenses really looks like. Then begin setting aside 5% of your net pay and slowly build a savings. Sound like too much? Then start with a goal of setting aside $100 a week. In a year that means $5,200, which is a nice cushion.

If for some reason you do need to take a cash draw from the company, be sure you set aside money for taxes. Otherwise you might be surprised later with a nasty tax bill.

Ken Yancey
CEO
SCORE
Washington, D.C.

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