Guide

Build a cash buffer for slow months

Set a target reserve so a bad month doesn't turn into a crisis.

8 min read·4 steps

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Set a target based on fixed costs
A common starting point is one to three months of fixed costs held in reserve. Adjust up if your income is seasonal or unpredictable.
Keep it in a separate account
A buffer that's mixed in with everyday spending money tends to quietly get spent. Keep it somewhere slightly harder to touch.
Build it gradually
Set aside a small, consistent percentage of income each month rather than waiting for a big windfall that may not come.
Only use it for genuine gaps
The buffer exists for a slow month or an unplanned cost, not for funding a new project. Refill it as soon as you dip into it.

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Set a target based on fixed costs