Protecting Your Checking Account Buffer

Dear amor,

How much money do you have in your checking account right now?

How much of that money are you willing to spend?

And how much of that money are you committed to not touching? 

The amount in your checking account that you are committed to not touching is what I call your "Checking Account Buffer." 

I work 1:1 with my clients to decide what the size of their checking account buffer should be. Everyone chooses a different amount based on how many checking accounts they have, their monthly expenses, and how much they prefer to keep in a savings account instead. 

Currently, I have two checking accounts. One checking account to pay my credit card bills in full each week and one checking account to pay my rent and utilities. 

The checking account that pays my credit cards bills in full has a checking account buffer of $500. I chose this amount because I have $500 in expenses that I do not charge to a credit card and always want to have the cash to cover those expenses. 

The checking account that pays my rent and utilities has a checking account buffer of $5,000. I choose this amount because one month of my rent and utilities costs $5,000. 

Now some people would say "$5,500 in a checking account instead of a savings account?!? That's $88 a year of 1.6% interest you could be earning! You have too much money in your checking account." 

To which I would respond "Not all of my money is making money in my sleep some of it is giving me the peace of mind so I can sleep." 

The same skills it takes to pay off debt, build an emergency fund, and meet your annual investment goals will be the same skills you will need to protect your checking account buffer. 

This is why I like to monitor whether my clients have their checking account buffer because most often than not if someone struggles with protecting their checking account buffer, they are struggling to pay off their debt and struggling to maintain the extra cash flow to build an emergency fund and meet their annual investment goals.

I went several years maintaining my checking account buffer until Quarter 2 of 2022. 

In May, I found myself sick and tired of my living arrangements so I decided to spend money to fix it up only to realize that it was costing me too much emotionally to do so. By the time I made that realization, I had already used what used to be my $3k checking account buffer.

In order to move homes, I would need to using my emergency fund to cover my first month's rent and security deposit. I made that decision knowing I have the skills to rebuild my emergency fund. Once I got my new place, I decided I would continue to use my emergency fund to furnish it because I found myself caring more about home decor than financial security.

I share this story because I want you to know that I understand how emotionally challenging it can be to protect your checking account buffer.

I don't want you to hoard money, I want you to use money to give your present self and future self options. Just like having a checking account buffer and an emergency fund gave me the option to move so quickly. 

Money will continue to your come way and you can always start to save, pay-off debt, and invest again but it's so important you understand your spending triggers in order to save, pay-off debt, and invest in the first place. 

You want to be curious with your spending triggers NOT judgmental. You want to know the REAL reason behind your urgency to spend money. Don't try to convince yourself not to spend the money, instead get to the root thought that creates the emotions you want to pacify. 

"I have kids, I need to furnish my new home ASAP." 

"I'm at a thrift store, if I don't buy this right now, it may not be here later."

"I haven't been there for my partner lately, let me take them out to a fancy dinner." 

"My low-income child self now has the money to buy the things they always wanted." 

There is nothing wrong with any of those thoughts UNLESS you find yourself taking actions that are not aligned with your financial goals AND being upset about your financial status.

Only when you can nurture different thoughts about a circumstance, then will you be able to feel and act differently. It's always a choice. 

Sometimes we choose patience and adjust the deadline of a financial goal and sometimes we choose a different thought that makes us decide not to spend the money after all. 

You only get better at making these choices by practicing thought work. So if you are struggling with your current financial results, I hope you will join me this Wednesday, August 17th for my FREE "Thought Work Group Coaching Session." Sign-up here.

Todo con tiempo, 

Announcements + Reminders 

• On Tuesday, August 16th at 5:30pm PST/8:30pm EST I will be going live on Instagram to talk about how I use "More than Enough Days" to maximize my extra cash flow. I hope you can join me live or watch the replay. 
• If you are interested in working with me 1:1 for six months to create a plan for you to become work optional, apply to work conmigo here. 
• Current clients have access to the replays of all of my 2022 workshops. Login in to your coaching portal here if you are a current 1:1 coaching client.
• Watch the replay of my IG Live on "The Power of Thought Work" here. I shared how your thoughts may be impacting whether you move your money into a high-yield savings account.
• Every Monday, I posted on LinkedIn. I encourage you all to follow me there and to spend time on that platform. The best time to look for a job is when you do not need a job.