Hello! Please enjoy this blog post from a friend of mine. We maintain a buffer in our checking account and it gives us major peace of mind. Do you have a buffer?
About a month ago I realized we had built a meaningful buffer in our checking account. For a long time my goal has been to get one month ahead in our primary household account.
I assumed that saving a little here and there would eventually add up, but I hadn’t been checking the account balance at the start of each month to see exactly how much had accumulated.
After a quick review of our budget I discovered we had a $1,600 surplus in our account! I knew I had been setting money aside, but I didn’t expect it to total so much. Small, unnoticed deposits and leftover amounts really do add up over time.
I don’t plan to stop at $1,600 since that amount isn’t yet a full month’s worth of income, but it’s a solid start.
I’ll keep doing what I’ve been doing—add the money when I can and leave it alone. Hopefully within a year we’ll reach the goal of being a month ahead in our checking account. There are many reasons everyone should consider keeping a buffer in their checking account; here are a few key ones.
A buffer protects you from bad days.
Bad days happen to everyone, often when you least expect them, and they can derail financial plans quickly. Imagine it’s Monday morning, you’re late for work and you get a flat tire on the freeway with no spare. You didn’t sign up for roadside assistance, so the tow truck alone will cost about $150.
Once your car is at the shop, the mechanic tells you a new tire is $200 and that another tire is nearly worn out and needs alignment work. Suddenly a simple commute problem has turned into a $500 expense.
Or consider an unexpected emergency room visit. Even with insurance, ER costs often start around $100, and prescriptions and missed work time add to the expense.
Sometimes the problem is simply forgetting an upcoming automatic charge. A quarterly magazine subscription, a subscription renewal, or a recurring billing could post while you’ve already spent down your balance and push your account negative.
Negative balances can trigger overdraft fees.
Many people overdraw their accounts—statistics show a significant portion of Americans experience this each year. Overdraft fees averaged around $30 in recent years, and a single negative balance can lead to multiple overdraft charges if several transactions post close together.
I’ve been hit with multiple $35 overdraft fees in the past; it’s an experience I don’t want to repeat. A $1,600 buffer helps prevent those costly, avoidable fees.
Banks offer overdraft protection, but it’s not free. Overdraft protection can involve fees and may borrow against a linked credit card or line of credit. I chose to decline overdraft protection on my account, so if a purchase would overdraw the account it’s simply declined. Many people don’t realize they can decline that service and end up paying for overdrafts repeatedly.
A buffer can help you get a month ahead on bills.
Imagine paying this month’s bills with last month’s income. If you can cover this month from money earned the month before, then the income you earn this month goes toward next month’s expenses. That effectively builds an emergency cushion inside your checking account.
If you lost your job, having a month already covered by your checking account means you wouldn’t need to touch your main emergency fund for at least a month. That additional breathing room reduces stress and gives you time to make thoughtful decisions.
Being a month ahead offers real peace of mind. Even higher earners sometimes live paycheck to paycheck; with a checking buffer you avoid that trap and stay ahead of bills, rather than scrambling to cover them.
With extra funds in your checking account it’s easier to use autopay confidently. You won’t have to guess whether you’ll make your mortgage payment on the first or whether your insurance premium will clear. The money will already be there.
If you’re currently living paycheck to paycheck, try what I did: set aside a small amount from every paycheck. Use unexpected windfalls—tax refunds, bonuses, side income—and sock away an extra $50 or $100 each time. Stay consistent and you’ll notice a healthier checking balance before long.
Don’t worry that the money might earn a bit more interest in a savings account. Yes, you might make an extra dollar or two in interest, but you could also continue to suffer recurring overdraft fees that cost much more. A cushion in checking is a practical, low-friction way to protect yourself.
Bottom line: a cushion in your checking account protects you and builds a stronger financial foundation. It gives flexibility in your budget to handle unexpected expenses and prevents a single bad day from becoming a bad week.
You may not need a $1,600 buffer specifically, but any amount of cushion is better than none.
Do you keep a checking account buffer? If so, share your tactics for building it with others.
Author bio: Latoya is a freelance writer who enjoys talking about budgets and personal finance. Her current mission is paying off $79,000 in student loans and sharing the journey. She’s a full-time work-at-home parent who writes about her experience on Life And A Budget.