There are many reasons for having a buffer. It’s not only that it will release you from having money stress. If something bad happens in your life, you won’t get stressed out immediately. When I was working in my accounting and tax office the following happened.
There was a company that didn’t do so well. I could tell because I was preparing the financial statements and doing their taxes. One day the owner wasn’t able to get another financial rabbit out of the hat, he went bankrupt. He putted all his money in his business and he also had to let go of all his staff.
One of his staff members was Jane. She was working at the office, calculating and organizing al lot of things. Most of the times it was related to food and beverages. At that time Jane was years and it was her firs job after she finished her education. She was a loyal employee.
Now the company went bankrupt. She didn’t know what to do, she was completely lost. Within a day she went from a vital and active young woman into a couch potato. She stayed on her couch (and in bed) for about a week. Then she started to re-focus on what she wanted to do with her life.
Jane started asking around, what other people think she was good at because she didn’t have a clue anymore. She also did a lot of online tests and went to a career coach. Funny thing is that she discovered that the area of her education never ended in the top three, always around place 5-6-7-8. This explains why she liked her job, and also why she was lost after the bankruptcy.
About a month after the bankruptcy she figured out what to do. She wanted to know more about healthy food and exercising, helping others in establishing a healthy lifestyle. She did an additional three months training to get to now more about it. After that she did some kind of internship for a month.
Now it’s five months after the bankruptcy. The only question she had to answer for herself is if she wanted to do her new found job as an employee or as a small business owner. She decided to start her own business. It took her a month to set up a proper business plan.
The conclusion is that Jane needed about half a year to change her career. She wouldn’t have made it if she didn’t have a buffer. This is just one of the many reasons to have a buffer of considerable size.