A Plan for Managing Your Liquidy

COMPONENT TWO

Managing Liquidity

Liquid assets are items you can easily turn into cash, or cash itself. The level of your liquidity is how much money you have for certain wants and needs. Liquidity is different from your net worth, items you have may be worth money, but may not be able to sell quick for that money. Money management involves making decisions about how much of your liquid assets to keeps in reserve. You want to invest in things you can easily turn into cash. When you borrow money, or use a credit card, they charge you interest. It is not wise to borrow money, if you cannot pay it back quickly.
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