Just proving that this blog is as entry level as you can get, here’s the first problem I’m looking to solve:
We SUCK at cashflow. We spend less than we make, but we spend it at the wrong times. Therefore, while on paper our monthly budget looks great and makes sense, I’m constantly having to move money out of savings to prevent potential overdraft. It’s a mess. Part of the problem is that I really struggle with budgeting by the month — matching up the overall spending for food, for example, with the checking account balance is difficult for me. I’ve tried more flexible systems, but then found that it was too easy for me to just move money around to cover overspending. I love the rigidity of the monthly budget for discipline purposes, but we’ve been riding the lightning on overdrafts way too many times recently.
After doing some reading, it appears that the answer to the cashflow problem, if not the budget issue, is a checking account cushion. If you’re a follower of You Need a Budget, they call this the “buffer.” The buffer is essentially one month of expenses saved ahead, so that you aren’t spending money as it comes in, but rather spending dollars you earned last month, and holding on to this month’s dollars to pay for next month.
While we are still pursuing debt freedom, and that’s the primary goal, I don’t want to keep having to shuffle money around to cover my disorganization. Therefore, while my goal is not currently to put a full month into our buffer, I would like to have one bi-monthly paycheck’s worth put away.
Therefore, GOAL ANNOUNCEMENT. In the efforts of better cashflow management, I will be putting away approximately $3000 as a checking account buffer, to keep myself from stupidly overdrafting.
Breathing FI 