Money, Explained From the Inside

Tools / Save & grow / Chapter 7 · Resilience

Buffer calculator

A buffer is money you can reach quickly, so a shock does not become a debt. The right size depends on how steady your income is.

1 · The idea

Buffer target

Months of cover rises with income uncertainty and with the number of people who rely on you. The gap is the target minus accessible savings; dividing by what you can add each month gives the time to close it.

The formula

Target = essential monthly costs × months of cover

Essential costs
housing, food, utilities, transport, insurance, minimum debt payments
Months
3 for steady pay, up to 6 or more for irregular income, plus 1 with dependants (a rule of thumb)

2 · A worked example

Essentials $2,400 a month, mixed income, one dependant: target 5.5 months = $13,200. With $3,000 saved the gap is $10,200, closed in 3 yr 5 mo saving $250.00 a month.

3 · Now use your own numbers

Change anything. The result updates instantly.

Try an example

Housing, food, utilities, transport, insurance, minimum debt payments.

Suggested buffer
5.5 months$13,200
You have
1.3 months
Gap to close
$10,200
Time to close the gap
3 yr 5 mo

What this means

This is a rule of thumb: three months for a steady income, more as income gets less predictable or more people rely on it.

Build the buffer before investing. A market dip is far less frightening when a car repair does not force you to sell.

Illustrative, not personal advice. Inspired by Chapter 7 · Resilience of Money, Explained From the Inside. Your figures stay in this browser. Real products add terms, taxes and conditions that this simple model leaves out.

4 · Take care

What this tool can’t see

  • A rule of thumb, not a prescription. Consider your own risks: a sole earner with a specialised job needs more.
  • Keep the buffer where it is safe and reachable, not invested in assets that could fall when you need them.

5 · Go further

Where this fits

See it in a life:

DavidIncome without wealth SofiaBuffers and irregular income

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