Emergency Funds / Rule 4
I have 3 months worth of emergency funds to cover bare essentials (rent, food, utilities, cell phone, internet etc...not the variable expenses/subscriptions that i can remove). Is the buffer considered 1 month of expenses from the emergency funds, or would it be something completely separate? How do you make it work? I browsed the forum a little and couldn’t quite find an answer. Apologies if a similar post already exists.
Hi GL !
Your emergency fund and your buffer are separate. Your emergency fund should be in its own separate category, while your buffer should be the extra funds you have in your Immediate Obligations or even some of your True Expenses categories.
For instance, if your phone bill is $50 but you have $100 in your Phone Bill category, you're buffered to cover an extra month.
I hope that helps clear things up! :)