How to manage the liquidity risk in your personal finance

Hello everyone, Domenico here!

Today I’d like to speak about the liquidity risk in our personal lives, and how we can manage it. It could be used also in the SaaS market, of course.

As many of you may know, I’m also a Finance student right now (part-time, I’m working every day!), and I have always been passionate about finance management.

A few days ago I shared this Tweet on my account:

One of the comments was very interesting:

The meaning of the comment is liquidity buffer. Then I decided to write an article on this topic because I think it could be so helpful for other people.

This is how I manage my finances, but this is not financial advice.

What is the liquidity buffer?

The term liquidity buffer belongs to the finance world, especially the banking market. Indeed, the definition is this one:

“Liquidity buffer” refers to the stock of liquid assets that a banking organization manages to enable it to meet expected and unexpected cash flows and collateral…