Do you have a buffer account – that is, a lump of savings you don’t dip into except in emergencies? If not, you may want to start building one right now. People who talk about money often talk about making your money ‘work for you’ and not letting it ‘rot away’ in a low-interest savings account. In general, there’s a lot of sense in this advice, but many people would say there’s one big exception: you need a buffer account.
When things get rough
A buffer account is an account that holds a lump sum of money that’s easily accessible, just in case something happens and you should need it. When your washing machine breaks, when the boiler needs replacing, or when your partner loses their job and you only have one income for a while – your buffer account makes these situations far easier to handle.
A buffer account is an account that holds a lump sum of money that’s easily accessible, just in case something happens and you should need it.
The amount you should keep in your buffer account varies depending on who you ask. Some say three months’ wages, others say three months’ living expenses. The truth is: the size of your buffer depends on your living situation.
What to take into consideration
You need to take into account all the factors that determine how much money you need in an average month. This includes: the number of people in your household, the size and age of your home, your rent or mortgage payments, your regular outgoings, your debt, your field of work and your employability.
Having three to six months of living expenses is a good rule of thumb, but if you have many mouths to feed, an old property and work in a field that rarely hires, you may need to aim for six months or more. If you live on your own, have a low mortgage and few outgoings, you can probably aim for three months.
Make it ADHD friendly
There are three main ways you can make your buffer building ADHD friendly and easy to follow:
1. Make it automated
Set up automatic monthly payments into your buffer account. On top of those payments, you can make it into a savings challenge or [gamify the goal] of building up your buffer, but make sure you always have regular payments going in that don’t require you to remember them.
2. Take it out of sight if you can’t control yourself
If you’re likely to dip into your buffer for Friday night kebabs and impulse-buying curtains, you could have your buffer account with a different bank. Keeping it “out of sight” will help you create a little bit of distance and make you less likely to blow your savings on a tuba or Pokémon cards.
3. Add a ‘fun percentage’
On top of my regular buffer, I have an extra sum of money that I call the “fun buffer”. Mine is an additional 10% of my base buffer, but you should find a percentage that works for you. With this extra money, your buffer can help you out when unexpected fun expenses come up too. Your friends want to go on an impulse weekend trip to Edinburgh but you can’t really afford it? Sure you can, that’s what the fun buffer is for! Find a chair that’s perfect for your lounge, but it’s way out of your budget? Not a problem! Fun buffer to the rescue.
A fun buffer is an excellent way to ensure you can afford your impulse decisions. Just remember to keep it separate from small “insignificant” impulses, and to replenish it whenever it’s running low.
