Having nothing in reserve is like having a dry well. There is no water available when you need it.
If on the other hand, you have abundant reserves in your well, then you can strategically plan for the future and have confidence you will be able to get water when you need it.
Having a reserve fund would have prevented my fridge incident (buying a new fridge with expected future revenue that never materialized). My reserve account now enables me to handle those kinds of unplanned expenses without the uncertainty “stress tax”.
When I was a software consultant, typically I was working full-time on a single project at a time. I had a handful of instances where I did have overlapping revenue, but it was pretty rare. That meant that when a project ended my revenue went to $0 overnight. Those were the scary times if a project ended early, or I expected the contract to get extended and it didn’t.
Luckily I am a planner by nature and learned right from the get go that I needed to have reserves for those lulls. When you get a grasp on that, you will significantly reduce your stress, because you will have eliminated a significant amount of the unpredictability and uncertainty.
I created a reserve account on the personal side for my family, typically known as an emergency fund, but knowing that language is important and not wanting to cause myself an emergency that I would need to tap into those funds, I have always called it a reserve account instead. Reserves can be used for anything good or bad, planned or unexpected, not just for emergencies.
I also created a reserve account on the business side so I could handle a lack of revenue coming in the door for months if I had to. Working as a Software Consultant on primarily full-time gigs, they sometimes took a while to find, and I would regularly have a gap between them.
Another consequence of having nothing in reserve is the tendency to be living paycheck to paycheck. That is problematic because when there is a hiccup, and there are always hiccups, then you have zero ability to deal with that without it being a crisis.