The Importance of Having a Financial Cushion

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This article is part of the MH4C Writers Challenge. I’d like to see which articles you like the most. If you like an article, please take a moment to ‘Like’ it on Facebook, ‘Tweet’ it, or give it a ‘Plus One’ on Google +. (To the right of the title, you’ll see each of those buttons so it should make your job easier.) The winner of the MH4C Writers Challenge is the article that has the most social media shares.

The following entry is by Roger Pritchett.  Roger is a minister and former missionary in Africa.  He is married to Karen with three grown children and 5 grandchildren with another on the way.

I didn’t think it would matter.  But it did.  My wife and I had been struggling with debt and lifestyle.  I’d been reading books and articles on getting personal finances in order.  Many of the writers suggested that an important early step to make is to develop a cushion (margin) in your finances.  The idea is to save some money so that if an unexpected expense comes up, there’ll be something set aside to take care of it.

I knew that there were always unexpected bills, but I didn’t think that having a cushion would make much difference.  How could I justify the struggle to get that cushion in place when we had so much debt and the interest charges kept piling up?  Wouldn’t it be better to put that effort toward paying off balances?

My wife convinced me to try it.  With so many people recommending it, why not give it a try?  After trying it, if we still didn’t see the value, we could always put it toward one of our many credit balances anyway.

The result was amazing!  Several years later, I look back and think of that one early action as perhaps the single most important decision we made.

It took a few months to develop that cushion.  We chose to set aside $1,500 for the unexpected.  When we had it fully in place, the amount of relief was incredible!  I felt a huge burden had been taken off my shoulders.  Yes, we still had too much debt, but for some reason, having those funds set aside made a big difference.

Upon reflection, here’s what I think happened:

  1. We made an important decision.  This gave us a specific, measurable action we could take.  While it wasn’t easy to save the money at first, it was achievable.  I believe this was the real start to our efforts to seriously get our finances under control.
  2. There was immediate relief.  As soon as we had just some of the funds set aside, we realized that we now could begin to weather some of the unexpected storms that inevitably come.
  3. It gave us confidence.  We had some success.  As one of my college professors often said, “Success breeds success.”  We had saved some money!  We can do it!

Having a “rainy day” fund put us immediately on better financial footing.  More than that, it started us on a roll which has led to more good decisions, and better actions.  We are close to being debt-free, now have some money saved for retirement, and are feeling much better about our situation.

Whenever the topic of personal finances comes up and I have the opportunity, I always recommend setting aside some funds for the unexpected as the beginning point.


  1. Wes Smith says

    Thank you for sharing Roger! We experienced the same relief. It is much less stressful to pay from a savings for unexpected bills than to increase your debt!

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