RandomHandle wrote:I normally mention this, a buffer can act like a mini-emergency fund. You can always go off-buffer if you get in a bind.
Building a buffer that's also an emergency fund when you don't already have cash reserves is likely to be very frustrating, because whenever an unplanned-for expense comes up, you'll feel like you're backsliding. What you want to experience is success, not stress because you seem to be failing to meet your goals
My recommendation is always to establish rainy day funds to cover periodic expenses (or "lumps"). List them all out, set goal amounts for all of them, and budget a set amount to them every budget period. I did this at the same time I started building my buffer. I was able to build up a few thousand in these funds, and because the biggest were more like emergency funds (big car repairs and such), I felt good about dedicating other money toward the buffer.
My buffer is one full month's income sitting in the bank on the first of the month, so I can budget the entire month at once. If I had to 'break' my buffer, I'd put the remainder into a buffer category (that was my method of building it), build it up again, and then re-release it into the budget to do its job.
Assuming you're building rainy day funds or at least have a $1000 or $2000 mini e-fund, it is indeed a matter of what will make you feel more secure and prosperous. A buffer is a great tool because it simplifies your budgeting. A big honkin' income replacement fund is a great tool because it makes you feel secure. Accelerating debt payoff is very satisfying, especially if that $10500 is driving you mad.
Gee, that wasn't very helpful, was it?
"It’s still all about the method. Fancy Cloud Sync algorithm aside...the software is there to help you become more aware (Rule One), anticipatory (Rule Two), flexible (Rule Three), and secure."--Jesse's blog, A Method to Your Madness