tweaking the budget

[LivingAlmostLarge]

Okay I'm getting more into the hang of my budgeting more in depth. I never did this before so it's an odd circumstance so forgive me for having a difficult time grasping many of these concepts. I figured out how to have multiple accounts in capital one and start segregating the saving pots. I have an EF, property taxes, Roth, and Sink funds. I also have a BofA account to pay our bills. Last month I managed to stopped chase from escrowing our account. This was not possible initially because we had to do it to get a better rate on our loan. So along with starting a budget i now again have to segregate my property taxes and insurance.

Anyway I am CC spender who watches the balance and then pays it off in full. There are very few things that crop up that are not paid on the CC. Mostly the yard guy, cleaner, and odds and ends. Anyway the sink funds I am estimating $720/month to cover stuff like car insurance, annual renewals of things like AAA, Amazon, life insurance, certain kid expenses, etc.

But how do you guys handles excess money? Let's say I segregate $x to Roth and hit that goal, then I put $Y into Sink fund. If I have extra I put it in $Y - the sink funds and move it out as needed back into the checking accounts? What do you do with the extra? What if you find you need more or less? I know you are supposed to be "saving" 15% to retirement? Would it be the end of the world if I save 15% and just included college savings into that number?

[Jluke]

My excess goes to taxable investments.

I just know when I’ve reached a point where I have excess and send that difference to the investments.

if my base is 5k for money market and I end up close to 10k there. Then I send 4-5K to be invested.

and start saving again

[disneysteve]

I'm not 100% sure I'm following your question but I'll try and answer it. I know how much our monthly spending is including irregular things like insurance premiums, property taxes, etc. I make sure I keep enough liquid to cover those things either in our checking account or Ally savings account. When there is extra money accumulated, it either goes to Ally to further build our cash cushion. As I approach retirement, I'm working to get our cash up to at least 2 years of expenses. I will also put extra money into our taxable Vanguard account.

Are you also asking if the 15% for retirement includes college savings? If so, the answer is no. It's 15% for retirement. College savings is separate.

[terri77]

Last month I started moving the monthly surplus to my savings as my checking account balance keeps growing. There’s not much interest being paid in savings, but it’s getting me to my goal much faster than I had predicted.

[breathemusic]

My excess just goes into a general savings account. I already put aside a % of my income into retirement accounts, so I generally keep building up my savings because I know that over the years I will spend that down on projects. We're doing a major kitchen renovation now, but in the future, we need to replace the gutters, our driveway needs to be redone in a few years, etc. All these things take big chunks of funds so I like to make sure I have a sizable amount of cash in savings for major expenses that I know will happen over the years. If my cash savings really grew to be more than i knew I needed to cover even projects, I'd start moving some into investment accounts, but so far that hasn't really been the case beyond what I already set aside.

[bjl584]

I've been moving excess to a savings account.
I have been trying to beef up my cash position, so that is the reason why currently.
In the past I've moved extra towards my taxable investment account.
I've also used excess for debt repayment at times.

[Nutria]

But how do you guys handles excess money?

I have no "excess" money, because it's all "spent" -- in that I know where it's all going -- at the BOM. (Even fluctuating bills like electricity have a fixed amount because Iook back at the previous 12 bills and take the average. That average goes into a general sinking fund account, and then the bill is paid from the sinking fund.)

[quote[What if you find you need more or less?[/quote]

Unspent grocery and "miscellaneous" money are rolled into the next month. Therefore, even on day one, I know that my budget will be zeroed out at EOM.

I know you are supposed to be "saving" 15% to retirement?

That's the hypothetical ideal for winding up with $1M if you start young.

Would it be the end of the world if I save 15% and just included college savings into that number?

I didn't start saving 15% until a couple of years ago, and the world is still spinning. I did start with 6% at age 30, and -- even after sending a big chunk to my ex-wife in a QDRO -- am well above the growth path required to have enough money to retire on. (Note that part of my calculation is that I expect to die in my 70s.)