The Importance of Building a Financial Buffer

Written By Deb Knight:

Irene, I am sure you have heard her name recently and she has been the bane of my existence last week. At the same time, she taught me a very valuable lesson that I want to share with you to save you the pain and suffering.

Before Hurricane Irene hit I was working online paying my bills and setting some money aside for taxes.  Between the bills, food and our son wanting or needing things, the money simply disappeared from my bank account almost as fast as it went in. But then Irene happened and I was out of power and internet. Three days of no power, three days of no work, three days to stress about being able to pay bills and buy my son the things we want to get him for his birthday in a few weeks.

Three very long days!

In general I try to make $30 a day minimum, I would prefer to make a good $50 a day but the work isn’t always there as I work in the Duplicate Checking Department for Demand Studios. Some days there is no work, some days there is plenty to go around, it’s a feast or famine kind of existence.

My other job is a phone job with a company called LiveOps and without a phone or internet, I can’t work that either. So when I found myself unable to work for three days straight, knowing that I was missing out on at least $100 I realized I really need to build up a buffer, something that will be there when I can not work at all.

As I read the texts from my electric company telling me that they might not be able to restore my power for another 5 days, I began to panic. I had bills that were due and I needed to make sure I paid them but I didn’t have enough in the bank to do that. I knew that if I was working I would have made enough and then some.

This made me realize that I simply need to stop living paycheck to paycheck. I need to stop spending when the money comes in for a while, I need to start saving not only for my taxes at the end of the year but also for the Irene’s that will come into my life. Lucky for me, I have a terrific husband who makes a lot more money than me and he can pull me out of the hole I am in. He can toss me a financial life-preserver and make sure the bills get paid and then I can begin fresh. I can save my money more wisely and build a buffer before spending on toys and treats.

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