Welcome to the second week of the challenge! So far in this course, you’ve figured out how much cushion you’d like to build and created a plan to boost savings to make that cushion possible. Today, you’ll learn how to track those extra savings in Goodbudget. 

Let’s get started. 

Use Goodbudget to track your cushion

Goodbudget is a budget tracker that allows you to create a budget using digital Envelopes. We recommend using it to make and manage your budget so that you can also track and build your cushion effectively. 

The first step is creating a budget that’s equal to your regular income. We’ll talk about tracking your savings later on.

Step 1: Create your budget

If you haven’t already, sign up with Goodbudget. Next, review our How to Make a Budget guide to create a budget that is equal to your regular, pre-course income (i.e. your base income, not including your new savings). 

You’ll want to follow along with Option 1 where we’ll walk you through building a budget based on your previous spending. 

Once you’re done making your budget, you should continue using it to track your ongoing expenses, by either adding them manually or confirming your automatically imported ones, to make sure you’re spending in line with your income. If you spend more than your income, you’re already at risk of squashing your cushion so much that it won’t spring back before you need it, or at all.

One extra note: If you’re planning to cut back on spending as part of your savings strategy, then be sure your budget equals less than your income. 

Step 2: Create a Goal Envelope to grow your cushion

Now that you’ve made your regular budget, it’s time to make a place where your cushion can grow. 

To do that, create a Goal Envelope in Goodbudget and call it ‘Cushion.’ You’ll set its budgeted amount equal to the amount you want your cushion to be. And even though the plan is to grow your cushion in 30 days, don’t worry about adding a due date. 

Going forward, when you make money from your new gig or have money leftover in your Envelopes from cutting back on spending, immediately stash them into your Cushion Goal Envelope using a Fill from New Income or an Envelope Transfer. That way, they’re safely set aside in the Envelope, and Goodbudget will help you track your progress throughout the next 30 days. 

Step 3: Transfer your cushion to Available when it’s built

Bookmark this assignment so you can refer back to it in the future!

After you’ve gotten your cushion to the level you want, you’ll no longer have to keep it in a separate Goal Envelope. 

Instead, you’ll transfer your cushion to your Available money via an Envelope Transfer where it will act as your cash buffer to help smooth bumps when paychecks don’t come on time, or when bills are a little higher than you expected. 

That means that on the first day of the new month, you’ll be able to use your cushion to fill your Envelopes to full, rather than having to partially fill them or fill only some of them.

And that’s the beauty about having a cushion! You’ll be able to use that cushion to buy groceries and pay some bills even before your next paycheck arrives. 

Once you do receive that new income, you’ll add that to Available to replenish your cushion. 

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And that’s it! You’re on your way to breaking the paycheck to paycheck cycle by growing a cushion!