Emergency Replacement Funds

[PRICEPLUS]

I have created a seperate fund just for major household appliances. The idea is to have enough in it to replace the stove, refrig., washer, dryer, etc., should they they break down.

Does any one else here have such a fund just for replacement of major appliances? Where do you keep the money for best results?

[jacquelynrose]

I remember in one of the Money Savings Game is to pretend you have to pay to do your laundry and start a little piggy bank fund and use that money towards buying new household appliances.

I think it is a great idea!

Jacquelyn

[Armywife]

My car has been going through its little troubles here and there (last inspection brought a few unexpected expenses to light) so i've adopted the Money game's idea about paying money whenever I go somewhere. That way in case something should go wrong, at least I'll have some money to prepare myself

[jmjj215]

Priceplus,
In answer to your question, since you're talking about saving for appliances, those are pretty big-ticket items. I'd use ING for a savings account to get a bit of interest. That's where I'd stick my money like that.

[Russell]

All my money is currently sitting in ING (more on that later).

With ING you can open as many sub-accounts as you want. One of mine is named 'car repair funds'. We have 3 cars (one is my race car which hasn't been used for over a year and I really have to get rid of it since I can't afford to go racing anymore). I can do most of the car repairs myself, although having recently moved to an apartment and no longer having access to a garage (well I do get a tiny garage but I'm not supposed to work on the cars here) I think these funds will come in handy since the repair costs can be pricey. I've been putting $25 (auto-deposit) into this fund for a couple of years. I can use the money for some other repairs too if needed but we don't really have any other appliances right now (fridge, washer, dryer, dish washer, microwave are all furnished by the apartment complex - they'd better at $1700 a month ).

Anyway, although I'm earning some interest on my money via ING I really want to invest part of my money where I can earn at least 5-10%. Even EDs 3.25% is just barely keeping up with the inflation...

[34saving]

Have you ever heard the expression "There are three types of jobs: Good, fast, and cheap . . .you can have any two"? My inventment corollary is: "There are three types of investments: Profitable, liquid, and secure . . .you can have any two."

Regretfully most of us are trying to get all three. If anybody has any hints for Russell (and the rest of us) on getting all three let us know

[Russell]

I'll take secure and profitable

I have a decent emergency fund that should cover anything unexpected. For the left over money I want to invest something that earns more than the inflation rate. Lately, I've been looking at the index funds. VICEX seems like a strange animal in an interesting sort of way. Although I'm still researching my options...mainly from the taxes stand point at this time.

[34saving]

You're right secure + profitable = index funds, but they're not very liquid since to get the profit you need to be in for the long haul. I'm still trying to find _anything_ that can hope to compete with Healthcare or college inflation!

As far as taxes go . . . do you have a Roth?

[Russell]

Yes, I have Roth IRA but that doesn't help with the taxes up front. Traditional IRA helps with the taxes but we don't qualify for it. Uncle Sam thinks we make too much money. We're in a weird situation since the living expenses in CA are so high the salary is usually higher than most other states. This puts us in a higher tax bracket and now that we don't have the mortgage interest to write off (for next year, since we just sold our house) we're gonna be paying taxes through the nose. Which is very strange since I'm paying more rent than what my mortgage was but there's no credit for rent. That's why owning a house helps in so many ways...the other thing that helps a lot is the 401k. My 401k is already maxed out though.

Sorry for the hijack of the thread PricePlus...

[jmjj215]

The more I look at investing, being able to retire very comfortably, rising health care costs, the more I'm convinced that I'm going to have to make a lot of money - and save a lot of money if I want to live the way I want to live (which is to live comfortably on purely passive income).

[Tree0164]

Jesse,
My Dad just retired and he has been spoiled all of his life by his union paying most of the health care costs. Now that he is retired to get coverage going to cost almost $1000 a month to cover him and my Mom. Yikes... got the mortgage paid off but now need another huge bill.

Back to the original quesiton:
We have a household/car fund nothing separate out but about $2000 set aside so if one of the car breaks down we can dip into it. We had to use it last year.

Remember to keep your emgerncy funds liquid in your bank or ING. If you need it within 2-3 years you want it liquid.

Longer than you can put it in the market. Bond funds more security, growth and income are balanced (combo of stocks and bonds) Stock fonds are more risky but you can do an index fund which as less risk than one that invests in small companies. Remember people are going to still have to brush their teeth and shave their faces (think Gillette Proctor and Gamble which would stocks in an index fund)

[PRICEPLUS]

Well, I am trying to establish a 6-8 month emergency fund. The appliance replacement fund is separate. Wow! It is hard to get ahead. Every time I get money together their is something else like car repairs, etc.. I am going to keep plugging away though.

[terry1156]

Originally Posted by jacquelynrose

I remember in one of the Money Savings Game is to pretend you have to pay to do your laundry and start a little piggy bank fund and use that money towards buying new household appliances.

I do this with several of our appliances and it does add up quickly. It also makes you use them a lot less. We do a full load of laundry less a week now.

[robex]

We have a similiar account. It came in handy two years ago when our dishwasher had a leak that completely damaged the kitchen floor, resulting in a whole new wooden floor and sub floor having to be laid, our hot tub needed a new motor, and our hot water tank having to be replaced. This was all within 3 weeks in December...I was never so happy to have an appliance account as I was that month! Since then we've also replaced the oven. Now I'm waiting for the dryer and fridge to go and then we'll be able to start all over again!

[Bluezy]

That's an excellent idea to have a separate emergency appliance/household replacement fund. THat way you would not borrow from your survival fund for a new fridge, etc.