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Jan 13, 2015    |       10 comments

Budgeting

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I want to share with everybody how I’ve been doing my budgeting now for several years. Debt

Here’s a sample month of mine for August of 2014. I know what my weekly (net) income is and put that under Job Income (obviously, lol). I base the month on 4 weeks. Below I have listed all my recurring monthly expenses, which will give everybody a good idea of what my minimum payments are. I explained to Ashley back in September that I “pay myself” $70 per week for misc. groceries (my GF typically buys these) and gas, so what I do is allocate $40 per week gas and $30 to groceries.

I have a really good idea of which payments I need to make with which paycheck of the month. I use this to determine how much of a payment I can make on my loans the day I get paid. When I take cash out for gas/groceries, pay the recurring bills and use the remaining money t0 pay my student loans, I’m often left with $0 in my checking account the day after I get paid.

Now I’m sure you’ll quickly notice is I don’t budget for non-recurring/surprise bills, ex. ER visits, ER pet visits, car repairs, travel and, honestly, I don’t even try. Most of time I have a pretty good idea the day I get paid, or the day after, expenses I’m going to incur that I don’t have specific line items for. When this happens I just lump it in the rest of my bills and use the rest to pay my student loans, like normal. When a surprise expense happens that I had no way of knowing, I pull out of my emergency fund (which currently holds just over $3,000). When the fund drops below my personal threshold of $1,000, I refill it using a month’s or so of extra income.

Compared to what I’ve seen on this site and other sits for budgeting, I’m very loose with it in the sense I don’t have lines for car repairs and travel and going to the movies and stuff I do to keep me busy. I don’t know if that’s a good or bad thing so I’m looking for feedback here! Don’t pull any punches, lol!

 

Jan 12, 2015    |       13 comments

Emergency Fund

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I don’t know why it’s taken me so long to write about our EF. I guess it just seems like a boring topic to me??? Or also because I know the popular opinion is going to be to get rid of it (throw the excess at debt). Probably a little bit of both.

Remember when I first started blogging, we had a pretty decent-sized EF. Although, I hadn’t officially called it an EF. I simply called it “assets.” See here.

At the time (March 2014) we had $11,750 in assets.

  • $4,00o in checking/savings account
  • $1,750 in Capital One 360 Savings
  • $6,000 in a money market account.

Since then there have been a few changes.

First, I ended up shuffling money around a bit.

I started some dedicated savings accounts in my Capital One 360 account and moved all the money from my checking/savings into Capital One 360 (<<that’s a “refer a friend” link). Instead of one general savings, I have lots of savings for separate purposes.

My current savings are:

  • $200/month toward car repairs/new-to-us car fund
  • $125/month to dental/vision/health
  • $100/month to annual expenses
  • $100/month for Roth IRA
  • $25/month for 3-6 month expenses
  • $25/month for travel/Christmas fund
  • $10/month for girls’ birthday expenses

You’ll notice I don’t actually have an account called “Emergency Fund.” I consider my 3-6 month expenses account as an emergency fund account. It should be noted, however, that if there were a true crap-hit-the-fan emergency, I wouldn’t hesitate to dip into my other savings accounts, as well, in order to avoid going into debt. BUT, I like having each separate savings account for its own specific purpose. And in the meantime, I hope we won’t have any true crap-hit-the-fan emergencies! Yikes!

Currently, our 3-6 month savings account has nearly $4,500 in it.

What’s happened to the rest of the money?

Well, it’s been spent!

Way back in April I put $1,000 toward debt. This was an intentional spending of money, as many readers expressed that they thought our current savings were too high.

I’ve also had 2 months where we’ve been over budget. Once was only by about $20, but the other time was by $640! Ouch! Both times I dipped into the EF to cover these expenses.

I still have my money market account, which is separate and has not been touched. And, finally, I’ve been saving $25/month (ever since I first started blogging), which is automatically deposited into my 3-6 month savings every month.

So there you have it. Almost a year after starting to blog, and after having to dip into our EF a couple of times, our net assets are still nearly what they were at the beginning of my blogging journey. Savings has always been a bit of an issue with hubs and I (because we BOTH are natural savers and want to stockpile money like the apocalypse is coming). I know this is a large EF for someone in as much debt as we have and many will say to continue throwing it at our debt. But having this safety net makes us feel…well, safe. Plus, we’ve actually had to dip into it a couple times so I’ve been glad its there. And I haven’t rushed to refill it or anything (just the same old $25/month we’ve always done), so I feel okay with that, particularly since hubs’ income is variable and we have young kiddos.

So there you have it. The deets about our emergency fund.

Do you have an Emergency Fund? If so, how much did you have in it while you were in debt?

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