Liquidity refers to how much readily available cash you have on hand for meeting immediate wants and needs. Liquid assets include cash and assets that can be quickly and easily turned into cash. Money management involves making decisions about how much cash or liquid assets to keep in reserve and how much to invest in less liquid assets. A financial plan should contain a credit management plan, such as limiting the number of credit cards you have and the amount of credit you can use at any one time. It is not wise to rely on credit cards if you will not be able to pay back the borrowed money quickly.
Personal Financial Literacy – Second Edition – Madura, Casey, Roberts – Pearson