cash reserve
A cash reserve is a portion of funds that an individual or organization keeps readily available for emergencies or unexpected expenses. This reserve acts as a financial safety net, ensuring that there are enough liquid assets to cover immediate needs without having to sell investments or take on debt.
Maintaining a cash reserve is a key component of sound financial planning. It allows individuals to manage unforeseen circumstances, such as medical emergencies or job loss, while also providing peace of mind. Financial experts often recommend having three to six months' worth of living expenses set aside in a cash reserve.