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When we first opened our joint account, Rob and I quickly discovered that we had different ideas on how to handle money.
Among some of the initial surprises was his insistence that we needed a buffer in our checking account.
I thought since we had joint savings we didn't need an additional financial cushion. Besides, our checking wasn't earning any interest, why would we want to keep extra money there?!
Eventually I came around when I saw the benefits – less stress without having to change much on our budget. (Actually once we had our bank account buffer in place, we didn't have to do anything. We only had to replenish if we had to use it.)
If you two want to have more control over your money, then a buffer can give you some peace of mind.
Bank Account Buffer is Not an Emergency Fund
Just to clear things up, a buffer is not part of your emergency fund (which I think you should stash in savings to earn some interest).
This is a financial cushion to absorb things like:
- small unexpected expenses
- irregular bills
- surprise gifts (if you only have joint bank accounts).
With this buffer you two will a much easier time when hiccups come up (and they will).
Figuring Out How Much Goes to Your Buffer
Once we both decided that having a buffer was good, the next step was figuring out how much would be good.
Again, there was an initial disconnect – I was thinking $100 and he was going for something closer to $500.
Since I was a working college student and he was just a year out and still very much entry level at his job, I thought he was crazy.
Being the awesome guy that he is, we started off with my number, but slowly we shifted towards his.
One big push towards it was my switch to self-employment. Happily most of my work gets paid on time.
Building a a Bank Account Buffer
I know it can be difficult to come up with the money if you're already living paycheck to paycheck.
Start off with saving up $100 in your checking account. Once you reach that works towards your goal.
Want a rule for thumb for a goal? Try for a week, maybe two of your take home pay. Any more beyond can be more helpful to you guys in savings.
If you're struggling for ideas on how to come up with that money, you might want to take the 50/50 challenge.
Since we bank with Capital One 360, our buffer is there. As an added bonus, we earn interest (yep- even with a checking account!).
Thoughts on Financial Cushions
You've seen our numbers, I'd love to get yours 🙂 Do you two have a financial buffer? How much do you keep and why?