What is the term for the need for cash for day-to-day purchases?

The term that refers to the need for cash for day-to-day purchases is known as the Transaction Motive. This motive emphasizes the necessity individuals and businesses have to hold cash for immediate expenditures. In everyday life, this can include spending on groceries, utilities, and other routine expenses that require ready access to cash.

The Transaction Motive is grounded in the idea that people need liquidity to cover their regular financial obligations without needing to sell assets or convert investments into cash. It reflects a fundamental aspect of personal finance and business operations, where managing cash flow effectively ensures that necessary expenses can be met promptly.

In contrast, other terms such as the Speculative Motive and Investment Motive pertain to cash retention for different reasons—like investing in assets to generate profits or holding cash in anticipation of future price changes. Financial Planning focuses on the broader strategy of managing finances over time rather than on the immediacy of cash for daily transactions.