What's a Cash Cushion?

If you've been reading the Budgeting site here at About.com for awhile, you've probably seen me roll out article after article about the importance of building an emergency fund. This is a last-resort fund that you tap in dire situations, such as if you lose your job.

But you should also maintain a cash cushion in your checking account to protect you from bouncing checks or paying overdraft fees. In this latest article, I explain the concept of a cash cushion, I describe why it's important -- and I tell you why, I'm sorry to say, it isn't considered part of your emergency fund.