starter cushion
Also called: mini emergency fund
A first, small emergency fund, enough to pay for one typical surprise such as a broken appliance without borrowing, built before the full cushion of several months.
A starter cushion is the first milestone of an emergency fund: a modest amount, often around one surprise's worth, kept apart from everyday money. Its job is narrow: the next broken fridge, dental bill or urgent repair is paid from it, not from a credit card.
It matters most for households that are paying off expensive debt. Sending every spare hryvnia to a card at 3% a month makes sense on paper, but with nothing set aside, the next surprise goes straight back on the card and undoes months of progress. A small cushion breaks that loop.
Once the starter cushion is in place, the saving can grow toward one month of essential costs and then the full target of three to six months, or part of it can go to the debt. Build it automatically, on payday, in a separate account with no card attached.
Example
Sam's family owes 52,800 UAH on a credit card at 3.2% a month and saves 1,000 on every payday. Their starter cushion target is 10,000: about ten transfers. Until it is there, the 1,000 keeps going to savings; after that it can go to the card, and the next broken appliance is paid from the cushion, not added to a debt that costs 45.9% a year.
Common mistakes
- Skipping it to pay debt faster. The next surprise lands on the card again.
- Treating it as the full cushion. It covers one surprise, not months without income.
- Keeping it on the spending card. It gets spent without anyone deciding to.
- Never moving past it. Once it's there, the next step is one month of essentials.
Learn it in the course
- Emergency fund: how many months of essentials · How much should an emergency fund be? Size it from essential costs and from how likely, and for how long, an income could stop.
- Case: Sam's way out of debt · A credit card and two installment plans, one fixed budget: compare paying the costliest debt first with paying the smallest first, and write the plan.
- Building it without pain: pay yourself first · Pay yourself first: automatic saving on payday instead of saving what is left, with a fixed sum for a salary and a percentage for irregular income.