How much buffer should sit in our bills account?
Enough to cover the lowest point your bills account will reach over a year, plus a small safety margin. Even when your fortnightly transfer is exactly right, big bills bunch together and drag the balance down for a few weeks. Map a year of bills, find the lowest running balance, and put in that gap plus a margin once.
The short version
- Without a buffer, Tom and Mei's bills account bottoms out at minus $555.85 on 12 April 2027, even though their transfer is right for the year.
- A one-off $860 buffer keeps Tom and Mei's bills account above $300 all year.
- You put the buffer in once. If your transfer is right, the account comes back to about where it started at the end of each year, buffer and all.
You did the maths. Every bill turned into a fortnightly amount, one transfer set up, all sorted. Then rego, car insurance and the home and contents renewal all landed within six weeks, and the bills account went into the red anyway.
That's frustrating, but it doesn't mean your numbers are wrong. Over a year the transfers and the bills match. It's the timing that bites. A buffer is the fix, and you can work out exactly how big it needs to be.
Why an even transfer still dips
Your transfer goes in at the same rate all year. Your bills don't come out that way. Some months are just phone and streaming. Other months bring the car insurance, rego and a water bill all at once.
So the balance climbs through the quiet months and drops through the busy ones. If the busy stretch comes before enough has built up, the account goes below zero, even though the year's total is spot on.
Moneysmart's budgeting guide tells you to include irregular or unexpected costs. A buffer is how you make sure those costs can actually be paid on the day.
Find your lowest point
- List every bill for the next 12 months with its amount and due date. Don't forget quarterly and yearly ones.
- Work out your transfer per pay: total for the year ÷ 26 for fortnightly pay.
- Start with today's bills account balance and go through the year in date order. Add each transfer and take off each bill, writing down the running balance.
- Find the lowest number. If it's below zero, that's your gap.
- Your buffer is the gap plus a safety margin.
It sounds like a lot, but it's one sitting with your bills and a calendar, and you only need to redo it when something changes.
Worked example
Tom and Mei's busy autumn
Example only. Tom and Mei's bills (the same list as in our monthly bills article) come to $9,650 a year, so they move $371.15 into the bills account every second Thursday from 2 July 2026, starting at $0. Phone and internet ($160) come out on the 5th of each month, streaming ($40) on the 12th, power ($620) on 20 August, November, February and May, and water ($280) on 15 September, December, March and June. Their car insurance ($1,300) is due 2 March, rego ($850) 20 March and home and contents ($1,500) 10 April 2027.
| Step | Sum | Result |
|---|---|---|
| Balance at the end of February | after the transfers and bills from July to February | $2,660.70 |
| March: two transfers in | 2 x $371.15 | $742.30 |
| March: bills out | $1,300 + $850 + $280 water + $160 phone + $40 streaming | $2,630 |
| Balance after the 25 March transfer | $2,660.70 + $742.30 minus $2,630 | $773.00 |
| Early April | $773.00 + $371.15 (8 April) minus $160 phone minus $1,500 home and contents minus $40 streaming | minus $555.85 on 12 April |
Without a buffer, Tom and Mei's bills account bottoms out at minus $555.85 on 12 April 2027, even though their transfer is right for the year.
Illustrative bills. Dates follow the real 2026-27 calendar for a Thursday fortnightly payday.
Set the buffer
Round the gap up, then add a margin for bills that rise, a payday that's a day late, or a bill you forgot. A margin of a few hundred dollars, or about one fortnight's transfer, is a sensible place to start.
Worked example
setting Tom and Mei's buffer
Example only. Their lowest point is minus $555.85. They want a $300 safety margin on top.
| Step | Sum | Result |
|---|---|---|
| Round the gap up | $555.85 to the next $10 | $560 |
| Add the safety margin | $560 + $300 | $860 |
| New lowest point | $860 minus $555.85 | $304.15 on 12 April |
| Balance at the end of the year | $860 minus 10 cents of rounding | $859.90 |
A one-off $860 buffer keeps Tom and Mei's bills account above $300 all year.
The 10 cents comes from rounding $9,650 ÷ 26 down to $371.15. Rounding the transfer up to $372 would cover it.
A buffer isn't an emergency fund
They do different jobs, so keep them apart.
- Bills buffer: covers known bills that bunch together. It's usually much smaller than an emergency fund, and it lives in the bills account.
- Emergency fund: covers urgent or unexpected costs like a car breakdown or losing work. Moneysmart suggests a good target is enough to cover three months of expenses.
If you raid the emergency fund every time rego is due, you'll never feel like you have one. The buffer stops that happening.
When to top it up or trim it
- A bill goes up, like a higher insurance renewal: redo the transfer and check the lowest point again.
- You add a new bill or move a due date: rerun the year.
- The account dips below your margin: top it up, then find out why.
- A full year passes and the lowest point never got near your margin: you could trim it a little, but there's no harm leaving it.
Moving due dates can shrink the buffer you need. If two big renewals land in the same month, ask whether one can move to a quieter month.
Key numbers
| What | Figure and source |
|---|---|
| Moneysmart says to include irregular costs in a budget | Include irregular or unexpected costs Moneysmart |
| Emergency fund target | Three months of expenses Moneysmart |
| What an emergency fund is for | Urgent or unexpected costs Moneysmart |
| National Debt Helpline | 1800 007 007, free and confidential National Debt Helpline |
| Day by day bills balance for the example, Thursday fortnightly pays from 2 July 2026 | Lowest point minus $555.85 on 12 April 2027, end of year minus $0.10, with $860 buffer lowest $304.15. Assumed dates: phone 5th, streaming 12th, power 20 Aug, Nov, Feb, May, water 15 Sep, Dec, Mar, Jun Our calculation from the calendar |
Free official help
- Moneysmart: How to do a budget
Budgeting basics, including irregular and unexpected costs. - Moneysmart: Save for an emergency fund
What an emergency fund is for and how much to aim for. - Moneysmart budget planner
Free planner that takes each bill at its real frequency. - National Debt Helpline
Free, confidential financial counselling on 1800 007 007 if bills are getting on top of you.
Questions people ask
If my transfer is right, why do I need a buffer at all?
Because the transfer is right over a year, not on every day. When big bills land close together, the account can dip below zero for a few weeks before the transfers catch up.
Is a bills buffer the same as an emergency fund?
No. A buffer covers known bills that bunch up. An emergency fund covers urgent or unexpected costs, and Moneysmart suggests aiming for three months of expenses.
How big should the safety margin be?
A few hundred dollars, or about one fortnight's transfer, suits most households. Go bigger if your bills change a lot or your pay sometimes lands late.
Do I need to work this out every year?
Only when something changes, like a new bill, a price rise or a moved due date. Otherwise the same buffer keeps working.
Can I just use a credit card for the busy weeks?
You can, but it's easy for that to become debt you carry. A buffer means the money is already there when the bills arrive.
Get the free pay check sheet
Type in one fortnight's pay and bills and see where it all goes. Works in Excel and Google Sheets.
Keep reading
Sources
- Moneysmart: How to do a budget. https://moneysmart.gov.au/budgeting/how-to-do-a-budget, accessed 2026-10-16.
- Moneysmart: Save for an emergency fund. https://moneysmart.gov.au/saving/save-for-an-emergency-fund, accessed 2026-10-16.
- Moneysmart: Budget planner. https://moneysmart.gov.au/budgeting/budget-planner, accessed 2026-10-16.
- National Debt Helpline. https://ndh.org.au/, accessed 2026-10-16.