The Buffer and why it's needed

By Retirement Commissioner Diane Maxwell

One of the roles parents and grandparents play is to give the next generation great advice.

They may not always want it, or listen to it at the time, but maybe more sinks in than we realise.

And when it does, it can make a big difference to the lives of those we love.

Diane Maxwell in green on stairs

Here's something I'm going to be telling my daughter; she's only a teenager now but it's something I want her to take into early adulthood.

It’s the power of The Buffer, otherwise known as the Emergency Fund or Rainy Day Savings.

It's a sum of money that will cover the unexpected, pays the rent or mortgage after a job loss.

It's the money that enables you to leave a terrible job, or a bad relationship, or gets the car back on the road after a failed WOF.

It saves you from having to borrow fast and often expensively, or choosing costly options to get by.

In the US, people who can’t afford a new set of tyres can rent them.

After a year they have paid the full cost of a new set of tyres, but they still don't own any tyres.

Then they have to spend more. It only takes a few of those life events to keep you down and keep you struggling financially.


Research from New Zealand, the US and the UK tells us that having rainy day savings determines our financial health, and that it's a mindset.

I talk to lots of 20 and 30 somethings who are comfortable 'running on empty'.

The plan is to borrow for the unexpected, or there's a belief that 'something will come up'.

That 'something' is often relying on parents or grandparents to step in, or going to a bank or payday lender.

Many readers will be thinking, 'I know this, I grew up understanding the power of The Buffer'.

Well, it seems that some of the next generation didn't get the memo, so they need your wise words and the time is now!

Rainy day savings tips

  • Start small and stick to a plan
  • Put savings aside each payday
  • Aim to save up the equivalent of three months’ expenses – but every little helps
  • Keep your ‘rainy day’ fund separate from savings and everyday accounts
  • A buffer offers you choices otherwise not available
  • Pass on this advice to grandchildren or other young people

Editor's note: Views expressed by contributors are not necessarily those of the Office for Seniors