what is the most important goal to save for?

We’ve only got so much money to save, so — what’s the most important goal to save for?

Is it college? After all, tuition ain’t cheap now, and it’s rising at an average of 7% per year — best to start saving now!

Or is it retirement? Financial advisors are fond of saying, “retirement first: you can borrow for college, but you can’t borrow for retirement.” Sound words of wisdom, from my point of view.

Or is it paying off high-interest debt? That seems a slam-dunk: it’s hard to beat 14.98% (the current national average, according to creditcards.com) guaranteed return on investment.

But even before that, there’s one thing that I would recommend you save for first: if you don’t have it, you should scrimp and save until you get it. It won’t take very long, and it’s the single best thing you can do for your financial well-being:

One month of income in your checking account at all times.

Or one month’s expenses, if you prefer, and you don’t have a zero-based budget set up. Regardless, you want that money there, in cash, before you get your paycheck, not doing anything fancy. Why?

A buffer is a shield between you and Life. Let’s say you’re looking to turn your life around, ready to dig out of debt and start saving for the future. You allocate every penny you have to your debt…and then you get hit with an unexpected expense, because you haven’t been budgeting for that long. Where does the money come from? Your credit card – or worse, the bank, with a nice overdraft fee on top of it. Dave Ramsey calls the one-month buffer a “baby emergency fund”. He also calls it (and its big brother, the 3-6 month cash reserve) “Murphy repellant”. He says that bad stuff just doesn’t happen as much, when you have a buffer. Now, I don’t know that I agree with that, but I do agree with this: bad stuff feels less bad when you have a cushion in the bank.

A buffer helps you sleep at night. A one-month buffer is the single best thing you can do to ease your financial worries. Why? Because whatever happens, you know you have at least whole month’s worth of expenses to help you tackle it, so you can afford to just handle things as they come and figure out the long-term repercussions during your monthly money check-in. And let’s face it: stuff happens, all the time. Not just big things, but little things, especially when you’re in a family, and especially when you’re just starting out on the whole budget thing. But when you have a buffer, you sit down to review your budget each month, look at how much you overspent, and take that off the top when you’re budgeting for next month. Your buffer is replenished, and you move on. No stress, no muss, no fuss, just constant forward motion, little by little.

Saving up for a buffer doesn’t have to be sustainable. Now, I just talked about constant forward motion, little by little, but that comes after you establish the buffer. That’s the good thing about it – compared to other things you’ll be saving for, it’s relatively small. But it’s very vital. So when saving up for it, you can go crazy, unsustainably crazy. You can work overtime, or take on a second, part-time job. You can cut your expenses drastically. You can sell stuff on craigslist. (Heck, Liz sold her last car on craigslist, did it nearly instantly, and for more than trade-in or Carmax.) The folks at YNAB (the world’s best budgeting program) say that according to their numbers, it takes an average of four months for people to save up a one-month buffer. That’s not too long. And once you’ve hit that goal, you can relax. Start spending again, stop working so hard.

And you’ll have a motivational boost that comes from a quick win, to keep you going through the next priorities, which may take a bit longer!