In the Buffer Zone

Last month we reached a goal that at times and to many seemed unreachable - we stopped living paycheck to paycheck. We obtained our buffer. Our awesome budgeting software "You Need a Budget" commonly referred to as "YNAB" defines buffer as "Your YNAB Buffer is the equivalent of one month’s income which, once saved, will allow you to use paychecks received during the current month for the following month, removing you from the “Paycheck to Paycheck” cycle." It's part four of YNAB's four rule methodology. Rule four "Stop Living Paycheck to Paycheck" is "A money management methodology that removes you from the paycheck to paycheck cycle and allows you to live on last month’s income. Income earned in the current month is not budgeted or spent until the following month." To learn more about YNAB's methodology, check out the method page. Rule Four will explain how to use YNAB to stop living paycheck to paycheck.

Obtaining our buffer wasn't easy. It only took 26 months!  It took that long because of various reasons- I didn't understand how to use the software properly until I started taking the classes (YNAB has killer support). That put me on the right track after a few months. But my balances were off, until the error checking feature was introduced and that fixed my balances. Then I was unemployed for 5 months and spent all my emergency fund savings to pay my bills and feed my family. Finally, with a tax refund and three instead of two paychecks in March (thank you bi-weekly pay periods), I was able to finally get a buffer.

Two months in and it ain't all flowers and kittens. We've overspent our budget the past couple of months. But we're still living on last months income. The best part is we never look at our bank account balance anymore. We use our budget to determine if we can buy something. However we are constantly moving money around categories to balance the budget, something YNAB users affectionately call "whack a mole".

Few people like living on a budget. It's a struggle, but once you get in the "buffer zone" it's liberating. The monkey is off my back.