Revolving Savings

[annibe11e]

I don't know what other people call it, but I have a few savings accounts just to save for future expenses.

I recently downgraded from a car I bought new in 2009 to a 2005 Dodge Neon and I'd like some feedback regarding how much to set aside monthly for repairs, maintenance and new tires.

I'm also curious how much other people spend on clothing. I'd like to buy some good quality clothing and do the bulk of my shopping 3 times a year. I live in MN, so the clothing is very seasonal.

I also have a category for my son's visits/Christmas and one for vet expenses.

What savings categories do you guys have, as far as future expenses and how much do you contribute to each?

[Petunia 100]

I think the best way to know is to start saving, divvy up the dollars, and see how it goes. If you find you have too little set aside to cover car repairs as they come up, then increase the amount you are setting aside monthly. If you reach a level you feel is plenty (say 5k), then stop adding more until a repair depletes your repair fund somewhat. Divert that money towards some other savings goal in the meantime.

[cardtrick]

I don't really categorize anything. I just have a set amount that I save every month. I set this amount, so it's very achievable. Then, I'm frugal with the rest of the money. So, if anything is left over, I'll just put that in savings as well. I'll take that extra out, when needed for unexpected expenses.

Categorizing and tracking every small purchase is too time consuming. I have plenty of more interesting things to do with my time.

[bjl584]

That's a hard question to answer concerning the car repair issue. How much do you know about cars? I know a fair amount and do most of my own repair work. It's saved me countless thousands over the years. It also depends what kind of shape your current car is in. If you keep a couple thousand set aside that should be plenty though. If a repair comes along that is more than that on a 2005 Neon, then it may be worth it just to get a different car.

[annibe11e]

I don't really categorize anything. I just have a set amount that I save every month. I set this amount, so it's very achievable. Then, I'm frugal with the rest of the money. So, if anything is left over, I'll just put that in savings as well. I'll take that extra out, when needed for unexpected expenses.

Categorizing and tracking every small purchase is too time consuming. I have plenty of more interesting things to do with my time.

How did you decide how much to save every month?

I tend to spend whatever I have, unless it's specifically assigned to certain categories. I would love to do it more simply, but I would find things I "need" to spend the money on. Usually new dishes, pans, small appliances. That's my "it looks like a need because it's household stuff, but really it's an excuse to shop" trouble area.

[humandraydel]

How did you decide how much to save every month?

I tend to spend whatever I have, unless it's specifically assigned to certain categories. I would love to do it more simply, but I would find things I "need" to spend the money on. Usually new dishes, pans, small appliances. That's my "it looks like a need because it's household stuff, but really it's an excuse to shop" trouble area.

Save as much as you can. If you can save $200 per month towards a car repair fund maybe after a year you could slow down. Of course, if you can save $200 per month for 5 years, you could just about buy a new car with cash.

Here's my "short term savings" funds per month (for me & my wife):

- $100 - Travel (2 plane tickets per year, gas money for holidays and vacation)
- $100 - Car repair fund
- $75 - Gifts ($900 per year for gifts)
- $100 - Medical (glasses, dentist, doctor's visits)

[cardtrick]

How did you decide how much to save every month?

I tend to spend whatever I have, unless it's specifically assigned to certain categories. I would love to do it more simply, but I would find things I "need" to spend the money on. Usually new dishes, pans, small appliances. That's my "it looks like a need because it's household stuff, but really it's an excuse to shop" trouble area.

I did this a bit when I was younger. I understand how it can be tough to make that distinction of needs vs wants. At some point, I realized that cash and liquid assets are king and I wanted to hoard as much of this as possible so I can always do the things I want at every point in my life without worrying about finances.

I have a pretty basic rule. When I go shopping, I only do it when I need something specific (except for groceries that I'm not frugal about). If I see something else that I "need/want" and if it's over $20, I will leave the store without buying it, go home and sleep on it for 2-3 days. If I still answer that I need it, I'll go ahead and buy it. But usually by day 2 the excitement about the product goes away and i start to think more logically and realize that I never needed it in the first place.

I have this little voice that tells me over and over again that I need to save as much as I Can. So, that helps too.

Maybe, make a general budget and commit to not take out the savings money unless it's an emergency? Then, you can buy whatever you want provided it fits into your budget. And you commit to only buy when you have cash to pay for it? So, if you want to buy something for $500, you have to run surpluses for the next x number of months before you can buy it. Usually by then, you'l probably not want it anyway. A good way to save even more money.

[kv968]

What savings categories do you guys have, as far as future expenses and how much do you contribute to each?

Your first savings category should be YOU.

Make sure that you're taking a percentage of your pay and putting it towards a general emergency fund (typically 3-6 months of expenses). Once that's done, or at the same time, you should also be contributing to a retirement plan of some sort.

[snafu]

Some people call it personal escrow funding a no fee savings account by working out sums need for anticipated expenses and taking a percentage from each pay. Others work out an affordable sum like $ 100. [clothes], $ 40. [auto maintenance], $20. [gifts], etc per pay. Those sums are transferred to chequing as needed. Alternatively, when sum is gone, spending in that category ends.

It helps to be a 'list' person. Following principles of 'capsule wardrobes' we need summer/winter/fall& spring combo business + formal and casual outfits. At seasonal change out, I note anything worn-out & pitched for replacement + accessories for next year. Every 3rd year gets an extra funding if a new coat is needed. I sell clothes for credit to a quality consignment store as well as buy some items there.

If I need to replace tableware, I buy it at a yard sale or charity outlet. I like the brands that can go from oven to table.
Your Neon's manual details maintenance based on mileage adjusted to meet winterizing requirements. We do oil changes every 3,000 mi using coupons from Quik Change type places, tires according to wear; workout your mileage and google details to work out how much to fund transportation. If you get brake pads as 1st squeal the rotors aren't an added cost. Our family tradition requires we make most holiday gifts so we need to complete funding by September for Christmas. If DS flies, divide costs by remaining pays. The point is to stay ahead of the curve.

I really like Petunia's idea to fund $ 5,000. and merely subtract from individual category totals.

[marvholly]

I move money from checking to a money market account every month to cover big annual bills (real estate taxes, home insurance, auto insurance), vacation savings and general savings.

Right no I am holding thi 'extra' in my regular checking account as ALL my annual bills come due in July & Aug. I can 'write' the checks for all right now.

[BMEPhDinCO]

I am a bit obsessed with this type of thing... so here goes:

We have:
personal fun each
mini-ef (immediate fund access)
monthly bills
monthly consumables (gas, groceries, household)

Emergency fund
travel
misc (ie, electronics, nice dinners out, gifts)
house
auto
pet
taxes
savings #1 (for DH)
savings #2 (for me)
medical
school
professional expenses

I try and make sure taxes has enough to cover any bills - DH is partially self-employed so this is a big deal. I put around $500 a year into pet for food, medical, litter, etc. I put around $2k into travel if I can. I put around $1200 into Misc. I put around $2400 into house and car and medical - if we have a big expense coming up or have recently spent a lot, I will put more back into these. Professional expenses is around $600 a year and school is just a drain right now.

For auto, I would put in enough to cover registration, inspections, repairs/check-ups and 10% over this (at least) for the next car.

[bigdaddybus]

We have the following accounts in addition to our std savings and checking. I like it this way alot as it does not cost me anything extra, and the organization is worth it to me.

1. emergency cash $14,000
2. Heath plan deductible $3000
3. RV annual storage $700
4. Kids Christmas $1000
5. Anniversary trip (currently populating with a target of $7500)
6. vacation fund (4000 a yr)
7. Auto fund ($3000)
8. home maintenance (currently empty)I guess I will close this account as I tend to pay for things around the house as they come up.

we keep another 4 months of emergency fund money (and any additional funds) in a trading account at scottrade.

[mrpaseo]

Here is a list of my monthly bills, the top half is monthly, the bottom is allotted monthly but paid quarterly or annually. Family of three (40, 40 and 16 y/o)

Monthly bills:
Upromise, College fund (Auto deduction)
Water
Electric
Electric (TN) extra sent to EF: I allot a certain amount, the overage is sent to the EF to cover the extreme (Cold/Hot) months.
HELOC Payment (Automatic payment)
HELOC Principle Payment (Manual Payment)
Netflix
Cable/Internet
Cell Phone

Monthly money set aside for annual bills
Umbrella Insurance
Vehicle Ins. Bi-A (Both)
Motorcycle Insurance
Homeowner's/Hazard Insurance (Travelers)
Life Ins. Q
Real Estate Tax (City)
Real Estate Tax (County)
Health (Co-Pay and Meds)
Trash Service

Vehicle Fuel: $200 (Monthly)
Food: $750 (Monthly)
Entertainment: For Month $200 ($50 per weekend) (Monthly)
Clothing: $100 (Saved up monthly until clothes are needed)
His Allowance: $50 (Monthly)
Her Allowance:$150 (Monthly, yes, she gets more than me, she spends more than I)
Child Allowance: $100 ($25 per week, she earns this though chores)
Christmas: $150 (Saved up)
Vacation: $100 (Saved up)
Vehicle Maintenance: $100 (Two vehicles, 1994 and 2007, saved up)
Motorcycle Maintenance: $50 (2011 Harley, saved up)
House Maintenance: $100 (Saved up until needed)
Emergency Fund: :150 (Auto set up)

We also have investments not listed.