This is a good post for two reasons the first reason so we are tackling another one of my terms. The second reason is because we are dropping the term Joe's and Joette's for Josh's and Joshette's. I don't think Joshette's is a word but it is now. So let's dive into a post about the Books by Josh term Cash Broke.
Technically you can Google the term Cash Broke and urban dictionary is the first result. To save you twenty seconds I will tell you what they define it as "When a person is out of money but has money on a creditcard, Visa and/or a voucher." That's not the Books by Josh definition of this term. I define it as have very little or no cash in your wallet; however, you have money saved in the bank and/or have money invested in assets. Just because you have twenty dollars in the bank and no money in your wallet does not mean you cash broke, you are just broke. Before you ask, there is no specific dollar amount to have in the bank before you can call yourself cash broke. One of my rules about money is if you have no "grown" debt you should have 3-6 months of expenses saved in the bank. Grown debt refers to mortgages and student loan debt. If you are in consumer debt (credit card or car note), in my eyes you don't fall into the cash broke category. Why, because it's not the best idea to invest without paying off your debts.
So now that we defined the term let's answer the second question. Is it good to be cash broke? It's actually an amazing place to be because that means you're on your way to having your money work for you. This is the step before becoming financially fit. Like always you want to know if I'm cash broke. Unfortunately not yet, I have to prepare myself for my upcoming surgery. So all my expendable income into savings. Once I've finished recovering and I return to work from it I will work on getting myself to the level of cash broke.
This was a short post but through it I was able to introduce a new term.