I received several questions about the $200 budget item towards savings that I listed in my last post. The answer is a bit complicated. We currently have have several savings accounts that are for irregular expenses…with the idea that we could also use those accounts as an emergency fund in a true emergency. These funds are currently auto-drafted into the savings accounts every payday. Each category receives $20 a month added to it. However, the original thought was that some categories are close to being “fully funded” and then that money could be reallocated to other categories until they need “refilled”. Here’s how I have things divided:
|Irregular expenses (auto registration/costco/ AAA)||39.53|
- The work expenses category covers things like continuing education, licensing and replacement items for Hubby’s work. Once we reach $500 this will be considered fully funded.
- Home improvements will never be considered fully funded.
- The Fun/holiday fund covers everything from fireworks on the fourth of July, extra grocery expenses for Christmas baking, campground fees, and the occasional movie date night.This will be considered fully funded at $100 while we are still reducing debt
- Gifts are a hard one. I will have to think about what I would consider fully funded.
- Clothing I will consider fully funded at $100, mostly because we do not have expensive clothing needs.
- Whereas we have an older dog and an older cat that at some point in the future will need a greater amount of vet care, I would not consider this fully funded until we reached $1000
- The replacements category is actually very new to our budgeting, inspired by needing to finance a fridge when ours died. This is meant to be money for when an appliance dies, or a new mattress etc. is needed. I am not sure where I would consider this fully funded, most likely at $1000+
- The auto category is pretty self explanatory. We currently own one vehicle out right and have a loan on our second. These funds are used for maintenance and hopefully will eventually grow enough that we can replace a vehicle by paying cash.
- The Annual expenses category covers things like AAA and costco memberships, and car registration. I would like to grow this to be able to pay for six months of auto insurance at a time in order to receive the prepay discounts.
- The final category is yard/garden. I LOVE veggie gardening. We just moved into our home last summer, so this will cover soil amendments, hardscaping, seeds and repairing the disaster of a sprinkler system that currently exists. It also covers pest control to come out four times a year to treat for voles and the giant wolf spiders that we get here. After this coming summer, the amount going into this account should be able to be reduced significantly as some of the much need landscaping is completed.
Obviously, If I wanted to keep putting money into these categories until they were all fully funded, I would be saving forever, and that would impact my debt payoff. I am currently leaning towards continuing to save in them at my current speed until I reach a total of $2000 across all the accounts. At that point I would simply add to the accounts if I had used the funds.
What do you think? Am I making a mistake by combining my savings categories and emergency fund? Is there something I should be saving for that I am not?