Fiscally conservative?

[LivingAlmostLarge]

Are you fiscally conservative? Do you sit and plan out large expenses and save for it? Do you mind spending it when the time comes?

I typically plan an annual budget. I plan on spending 1% of our home price on home repairs a year. We have an 1880s victorian, and we can't afford all the repairs at once, but every year we can do pretty major project, which is what we budget.

I also budget travel and my DH's tuition and student loans. Most recently, I budgeted a car. We have around $15k for a new car, and yes you know we can't decide on which car.

But we decided to shelve the issue this summer when it first arose in July/August because we decided we weren't ready to blow $15k on car before the baby arrives in February. We felt just in case we should have a larger than normal EF.

We have somewhere between 4-6 months of cash depending on the market.

Is this normal? Do you find yourself doing this or do you just spend it as soon as you budget it?

I find myself wondering is it being fiscally conservative or a cheapskate?

[kanjoh]

I absolutely keep a cash cushion and budget everything carefully. I certainly do not think you are being unreasonable; this is far better financial planning than most people go through. Keep it up!

[kork13]

I'll say that I budget month-to-month with a year-long perspective. I concern myself with what I spend each month, and wipe the slate each new month. However, I also save regular, moderate sums of "undesignated" money which I know will be needed eventually. I might plan specifically for an expected expense, but otherwise I sort of just lump everything together. If what I want/need can be covered between my monthly income and what I have saved, then I'll buy it whenever I decide the time is right. Travel is the best example for me... I know that I'm taking a couple weeks' leave in November, and I'll be spending about $700-$1000 dollars. I know that my savings will have plenty to cover it, so I'm not doing anything special to prepare (financially) for it.

In the end, it's really just a matter of what you're comfortable with. I think the way you plan your finances is perfectly valid and reasonable, so go with it if you're comfortable with it.

[GREENBACK]

I'll say that I budget month-to-month with a year-long perspective. I concern myself with what I spend each month, and wipe the slate each new month. However, I also save regular, moderate sums of "undesignated" money which I know will be needed eventually. I might plan specifically for an expected expense, but otherwise I sort of just lump everything together. If what I want/need can be covered between my monthly income and what I have saved, then I'll buy it whenever I decide the time is right. Travel is the best example for me... I know that I'm taking a couple weeks' leave in November, and I'll be spending about $700-$1000 dollars. I know that my savings will have plenty to cover it, so I'm not doing anything special to prepare (financially) for it.

In the end, it's really just a matter of what you're comfortable with. I think the way you plan your finances is perfectly valid and reasonable, so go with it if you're comfortable with it.

That pretty well describes my philosophy.

[MonkeyMama]

Definitely fiscally conservative - and I haven't seen a downside.

[Vytautas]

You are definitely not being a cheapskate. Having sound financial budgeting shouldn't be something frowned upon. Some people don't like this route because they can buy fewer or smaller toys initially but it can be a life saver in case of any issues that arise. People with poor financial planning get hit hard by problems while people like you have planned for it and can continue living their lives like normal with only minimal setbacks.

[LivingAlmostLarge]

I think a problem is, we can't agree on a car. If we "financed" a car there would be no arguments. We'd just buy a car on credit.

I'm honestly not sure if we're ready to start ourselves on that lifestyle.

[disneysteve]

I think a problem is, we can't agree on a car. If we "financed" a car there would be no arguments.

I don't understand this. Why could you agree on a car if you financed it but not if you bought it for cash?

[jasonnoguchi]

the thing is, do you REALLY need a car? I don't own a car even now that I have the cash to buy quite a few upfront without need for credit. I just don't see the need with public transport so convenient.

[LivingAlmostLarge]

Because DS, we could buy a super expensive car without caring about the price or how to pay for it. Sort of like, I'd let my DH get a lexus SUV, I think it's big and he likes it. Can we afford it? No.

Jason, yes. We probably soon enough need a newer car.

[zetta]

How big of a price jump would you need to make in order to agree on a car? What is the going rate on financing?

We're mostly fiscally conservative -- keep a budget, plan for big expenses, and pay cash for almost everything. Our emergency fund is 3 months income or about 5 months "needs" expenses. We also have a large investment portfolio that I avoid touching.

When we decided to replace DH's car, the cash we had budgeted was $7k short of what we needed for the car he really wanted. I didn't feel comfortable taking that much from the emergency fund and didn't want to sell any investment. The dealer was offering 1.9%, so we decided to take a 36 month loan for $7k. In the long run I figured it was better to use a loan to buy a car that DH would be happy with for 8-10 years than to force him to settle for something he would lobby to replace in 5 years. In the end I think we only paid something like $300 in interest charges, and the $227/mo payment was not a huge burden to us.

It sounds like you have your financial house in order, so if a $5-$10k loan would make the difference and the interest rate is acceptable, it might be worth considering.

[LivingAlmostLarge]

Zetta more than $5-10k. Probably closer to $15k. We also have to pay off our student loans, which is in the works. I am not saying that one day we can have any car we want, but I think right now we should stick to what we can afford and I know my DH agrees. So unfortunately choices do have to be made.

I think $7k sounds like a reasonable amount.

[Pitman]

I budget EVERYTHING. Every penny spent is calculated, and if I do buy something "off my budget", that purchase won't affect the money I have already set aside for bills, savings, etc. Once, or sometimes twice a month, my budget allows me to do a little shopping for something a want, but my needs must be beyond fulfilled for that to occur.