Girl, it is time to bust this up your To Do list – to let’s say….. today.

Having an emergency buffer is extremely important if you are (on your way to being) self employment, and/or traveling as it will cover your bum when you need it and makes you feel more secure about not taking on crappy jobs because you are out of cash.

My emergency buffer surely came to good use when I had an unexpected flight to Spain to support my mum after her husband passed away. And, I know it will be there for me as a back up in this upcoming period when I need to take time of work to help my best friend becoming a single mother (mother and baby will have to stay at the hospital for at least two weeks).

Just the thought of having this little pile of money aside will give you so much freedom.

You can even create a buffer when you are currently on a tight budget. The key is very simple: DO NOT TOUCH THE ACCOUNT – unless you absolutely need to. Booking a holiday or getting that dress on discount are not purchases that should be paid by your buffer. Getting your laundry machine fixed might be one if you really don’t have the money elsewhere and need it to be fixed right now (if you are apparent of 5 kids this is a must, if you are single you might be able to find a temp solution while you save up for the fix).

On to the HOW! 

  1.  Determine what the buffer is for. Just family / relationship emergencies and the house? Or should it also cover you on sick leave?
  2. Determine how much money you will need to survive 6-9 months (all your fixed costs + food), if it should also cover sick leave and rough income times you might want to up that amount to 1-2 years.
  3. Open a separate savings account and start running an automated payment towards it. Please pick a number that you can afford because you really can not book any amounts back once they are in your buffer.I started off with 50 Euro per month in 2010. (and had another 50 go to my ‘holiday’ savings account). I also added 10-50% of every amount that came in to my account that was not my salary. Honestly – I did not feel a difference in my spending behaviour or running short on my regular payment bank account.

You will feel that it takes ages to reach the balance that you need, but just remember that every little bit helps and use that feeling to your advantage to reach your buffer goal asap.