re: How much of a "cushion" do you leave in your checking account after paying bills

I think this question is answered differently by people from various generations. I've found the late 40 somethings and older believe you have to keep at least enough money in savings/checking to live off of for 6 months should you lose your job.

I generally keep very little money in checking and savings for that matter. Having a surplus of cash is not maximizing your investments in my mind. Liquidity is important, but most savings accounts arent even keeping up with the rate of inflation. You are losing money by putting your reserves there. If I'm building cash then I increase my contributions to my tax sheltered retirment accounts or invest it.

I laugh a bit when I see guys talking about the $50K they have in savings thats earning less than 1% interest and the $30K they have in their IRA/401K. In my mind theres something terribly wrong with that picture...