This is why you need a buffer

A little extra money on your account in case something unexpected would happen is the best saving you could have, and it’s the first savings goal you should prioritize. The buffer savings is like your personal finance safety net. It’s also the foundation of a reliable financial life and will make you more confident in your decisions about money.

Protection

There are several reasons that the buffer savings is so important, firstly, it’s a form of protection. If something would break or malfunction in your home, or if you would have to be of work for a while. It’s nice to now that you don’t have to use any unwanted credits. When life gets tough it doesn’t get easier bringing on interest fees and extra loan costs. The comfort in knowing you have a little extra might relieve some stress.

Keep a good credit score

Other than the safety aspect, a buffer can help you keep a good credit score. If you ever want to apply for a larger loan for a car or a home, your previous use of credit becomes an important factor. By having a little extra tucked away you can stay floating without having to use credits.

Take more risks

Lastly, a buffer allows you to take more risks financially. The feeling of having just enough to make it to the end of the month is a stress no one needs. With the buffer savings you don’t have to worry about a volatile market, surging energy prices or the inflation. If your buffer is large enough you could, for example, take your time finding a new job if you would lose yours.

Your first savings goal

For all the reasons above and more, a buffer should be your first savings goal. Make it your prioritized savings goal and build your safety net. A general recommendation is between two and three times your monthly salary depending on your living situation. When you know there's a little extra you can focus on your best life and spend your money where you need and want to.

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