The cushion

What I've discovered is that I like a nice, fat cushion. The cushion is my term for the money that is left in the bank at the end of the month before your paycheque electronically flies into your account.

The absolute thinnest cushion that I can handle is equal to one month's rent. The money for the rent HAS to be in the account before I get paid. It absolutely MUST because my cheque is not enough to cover the rent and I can't ever have a day where I'm not POSITIVE that I can make the rent.

I am working on building that back up to one month's rent and bills and enough food in the house for a couple months. This is really where the bare minimum should be. A comfortable place for me is three months rent and expenses. (This does not include other, long term savings and retirement money)

Plenty of people have said to me in the last year that they don't have an emergency fund and they can't afford to save for one. I say you can't afford NOT to save for one. Dh did get EI, but it took EI twelve weeks to send him a first cheque. If we hadn't had that money in the bank we would have been homeless. We did have more than we needed in the bank because I was working, but my income only covers about half of our expenses. We really were living on savings for three months.

If your family only has a single income or you are self employed or have seasonal employment then you *NEED* a very fat cushion for times when there is no work. The only money you can count on is already in your bank account- not in future earnings, property, investments or government assisstance.