Savings

[dawnwes]

Just a general question.

Do most of you have sinking funds for various areas (college for the kids, car replacement, etc...) or do you have a general savings fund and lump it?

This is AFTER 6 months or more of EF is saved and retirements is an ongoing savings so that isn't in the equation either.

Dawn

[skydivingchic]

On top of my EF I have sinking funds for car maintenance, cat care (covers food, litter, and vet appointments), gifts, several smaller annual expenses, clothes, medical expenses, and vehicle registration. I also have what I call personal savings, which gets a monthly contribution plus any extra money that comes in or any money left over at the end of the month. This covers things like vacations, a new to me car, and larger one off expenses like new furniture. Thus far I have not broken the personal savings down into categories, but am contemplating doing so.

[dawnwes]

I do already have small sinking funds like you are talking about. I have a set amount for car repair. I have repairs for other things as well. I also have a vacation fund (which is going down from where it has been. We need to be saving more.)

I was really thinking about the longer term savings like college and car. I am sure there are more, but those are the two what I can think of at the moment.

Dawn

Originally Posted by skydivingchic

On top of my EF I have sinking funds for car maintenance, cat care (covers food, litter, and vet appointments), gifts, several smaller annual expenses, clothes, medical expenses, and vehicle registration. I also have what I call personal savings, which gets a monthly contribution plus any extra money that comes in or any money left over at the end of the month. This covers things like vacations, a new to me car, and larger one off expenses like new furniture. Thus far I have not broken the personal savings down into categories, but am contemplating doing so.

[snafu]

It can be helpful to divide intermittent expenses by your 12, 24, or 26 pay cycles for a linked savings a/c to insure they are covered without stressing finances.

[kork13]

Originally Posted by dawnwes

Do most of you have sinking funds for various areas (college for the kids, car replacement, etc...) or do you have a general savings fund and lump it?

Yes.

I sort of do both.... I have a single account that I use to save for any/everything that needs to be saved up for (retirement and house DP are separated though). However, I do use an excel sheet I built to keep the money in that one account all divided based on the purpose. Whether EF, new car, "fun money", or whatever else... That way I know what I have available for a specific need without accidentally (for example) dipping into my car fund.

[Gary Barzel]

I have a sinking fund that are used for the inevitable short term expenses that constantly arise, that I contribute to regularly, and I have a fund for other expenses that aren't for now (college etc) but only gets updated when there's a little bit of extra lying around.

[Redraidernurse]

At one point I opened several different savings accounts titled "Vacation, Tithe, Home Improvement, etc" but in the end I have just found it easier to have one big savings account and lump all the $$ in there. Maybe it's a less organized way of doing things but we have enough positive cash flow between both our incomes that it works for us.

[disneysteve]

Other than retirement, the only separate account we have is our daughter's 529 plan for college. Everything else is lumped together.

[bjl584]

I lump it into one account and basically just keep track of what's for what in my head. EF, car fund, etc.

[cypher1]

Main EF/car fund is tied to ING account, and short term savings for home/auto repairs, hobby is in regular local savings. Everything broken down by Excel spreadsheet.

[MonkeyMama]

Lump it together - even the emergency fund. (Some of it doubles as emergency fund. For example, if I need to seriously dip into emergency fund for job loss, then I could significantly decrease the purchase price of my next car, to make up for that. That is how I double it up. I am currently saving for next car assuming I am gainfully employed and so will purchase something a little more expensive, though I could buy a car for $1,000 or $2,000 if I had to).

In excel I keep track how much is earmarked for emergency, short-term savings, and mid-term savings, etc.

Emergency = 3 month's expenses

Short-term = all non-monthly expenses expected within the year. We save 1/12 of the annual amount, monthly, to cover. (insurance, property taxes, vacation, car repairs, sports, etc.)

Mid-term = longer term expenses like car replacement, home repairs, insurance deductibles, orthodontia, etc. (or can use for emergency).

Medical - I just try to keep the medical deductible sitting in cash at all times - since it is a large amount.

I actually don't have any taxable non-cash investments at the moment. When we get to that point - will be long-term savings for things like college. I won't keep college money separate from our other savings. The kids probably have enough saved for college (gifts, in their name), so though we will save more in case they need it, we will use it for other things if they don't need it.

As you see, I like flexibility. I like to think ahead and plan for any forseeable scenario, and do have savings goals, but I am not into rigid savings categories. What I do keep track of is to make sure I am meeting goals.

[cypher1]

Originally Posted by MonkeyMama

Lump it together - even the emergency fund. (Some of it doubles as emergency fund. For example, if I need to seriously dip into emergency fund for job loss, then I could significantly decrease the purchase price of my next car, to make up for that. That is how I double it up. I am currently saving for next car assuming I am gainfully employed and so will purchase something a little more expensive, though I could buy a car for $1,000 or $2,000 if I had to).

In excel I keep track how much is earmarked for emergency, short-term savings, and mid-term savings, etc.

Emergency = 3 month's expenses

Short-term = all non-monthly expenses expected within the year. We save 1/12 of the annual amount, monthly, to cover.

Mid-term = longer term expenses like car replacement, home repairs, orthodontia, etc. (or can use for emergency).

Medical - I just try to keep the medical deductible sitting in cash at all times - since it is a large amount.

I like your break down for the different term savings. Otherwise I always forget to factor Medical due to HSA.

[Angelynne]

Originally Posted by dawnwes

Just a general question.

Do most of you have sinking funds for various areas (college for the kids, car replacement, etc...) or do you have a general savings fund and lump it?

This is AFTER 6 months or more of EF is saved and retirements is an ongoing savings so that isn't in the equation either.

Dawn

My dad used to have for me and for my sisters. but i wasn't really able to use it since my school's tuition wasn't that expensive. they just withdrew it anyway

[GREENBACK]

I lump my general savings together. I don't see any reason to seperate a bunch of different accounts. It's not like you're gonna pay less for anything.

[StellarSaver]

Basically, I lump it all together, although I do have a couple different money market/savings accounts at different institutions. The way I see it, having separate accounts earmarked for specific uses is more of an administrative hassle than it's worth for me. I simply take money out of my general bank accounts whenever needed. This method has always worked well for me... probably because I'm fairly frugal and therefore save a lot of my income by nature.

[dawnwes]

Thanks. We have just been lumping it as well for major savings. I do have some separate ING accounts. One for each child for just general savings for them. One was to save for a computer, which we got last month. So, small savings for specific items in ING and a large general account for major savings.

Dawn

[photo]

All cash is lumped together. I keep a few thousand in a checking account for bills and simply add to it from a money market when needed. Paychecks are directly deposited into the money market. The only way for this to work well is to maintain a frugal attitude towards spending, so that way we never overspend.

[BMEPhDinCO]

I keep it separate for several reasons:
1. at quick glance, it's easier to see how much is left in each account so if we are planning a fun purchase, we don't get excited at the higher amount, or get tempted to "just take a bit more"
2. when transferring money around, it's easier to not hit the 6 transaction limit when you have multiple accounts to pull from
3. I don't have to worry as much that all the money could disappear due to bank error or fraud, there are several accounts...

But I do think, however it is done, multiple savings buckets are a must for a good budget.

[Fizgig]

I keep separate funds:

1) Emergency fund that I refuse to touch unless the sky is falling. It's important to me to keep this sacrosanct and not get into the habit of dipping in.

2) House account, for taxes, insurance, and repairs. I do not escrow because I'm creeped out at depending on other people to pay my bills correctly.

3) Splurge fund, for toys, vacations, charitable giving, etc. I have a hard time giving myself permission to spend on nonessential items, and designating this account as my "go crazy! have fun!" money makes it easier to not be such a scrooge. I can spend this money on absolutely anything I want, while knowing that my important priorities are already taken care of.

I intend to start a car replacement fund (my car is 3.5 years old and has been paid off for years), but haven't done so yet.

[photo]

There's one thing I don't quite understand. I can't imagine that most people have static expenses. One month may produce an expensive repair (or taxes due or to fill a large propane gas tank, etc) yet another month may require very few expenses.

For those who are strict budgeters, where do you put the money from a low-expense month -- leave it in your checking account or add the money to your emergency fund?