$62

He excused himself from drinks with his friends to go home to pack for the night's stay over. It was Friday. It was the world cup opening match. He did not feel bad about it, since he only had $62 left in his savings to tide him through the next 6days till pay day. That itself was enough reason to not go for drinks, but to his credit charging friends, broke was not an excuse. Watching world cup with his football kakis, on the other hand, was a cheap activity. So how did he end up with just $62 in his account?

He was not a spendthrift. Expenses were mainly limited to food and books. His current penniless predicament tells a story of poor money management. His $62 was not a solvency problem, but a liquidity problem. It is not wise divert your income else where and to hold just $500 in cash every month. Some months, you tend to spend more. *ahem GSS *erhm IT fair. Ideally, one should hold at least 6 months salary worth in liquid cash in case of emergencies. So for all of you who have not done so, please start building this up first before the other components of your portfolio.

With one birthday dinner scheduled this week, he will have to be home for every other meal possible this week.