General Savings?

lifeonthehill

I see it posted here quite often. People put money into general savings. What exactly is that and what is it for?

H and I are goal specific right now. We have multiple savings accounts that we use currently for E-Fund, Car savings, baby fund, and my college fund. We don't do any general savings. Is this something you do when you want to be putting money aside but don't have anything specific in mind for it?

Kahlyla

I guess for us it means that yes, it's not specifically earmarked for anything just yet. Like there are multiple "wants" that we are saving for - hot tub, vacation, house renos - but since they're all wants and not needs, we may decide at any time to put the money toward any one of them. So there's no "hot tub" fund versus "vacation" fund per se - because hey, if we buy a hot tub, we could probably skip the vacation that year, eh? Or we may decide that a kitchen reno would actually make us happier, or we may decide that we want to send our kids to summer camp. And we don't have to forgo something critical to do these things, we just have to choose between them when the time comes.

That's not to say we're not also saving for some specific things, but that's why we have budget line items for "new windows", "RESPs" and so forth, in addition to "general savings". (Physically, it all goes to same place, unless we're talking about investments - we don't have multiple savings accounts.)

I guess in a nutshell, general savings is for "wants" (or a massive emergency).

hoffse

Eh I sort of lump a bunch of categories together and call that general savings.  I go back and forth between splitting them out specifically and just lumping it all together.  Pretty much anything discretionary for us is general savings - home improvements, vacations, "slush" money that we use for random things that come up (ie: that bridesmaid dress I had to buy with no notice), even our "baby fund" is discretionary because we won't be TTC for at least another year, so we don't really need it right now... it's all fairly fluid, so I mentally call it all "general" savings.  I don't feel bad about stealing from one fund to pad another, since it's all discretionary stuff, and every bit of it would come to a halt if we faced a true emergency.   

The only thing I always separate out is a savings account to hold our Roth contributions because I only fund our Roth accounts once a year in a single lump-sum. I hold the cash until I'm ready to make the contribution because I like to keep enough liquid in all accounts (combined) just in case we had a major emergency.  I would deplete our e-fund before raiding the Roth savings account, but it's still there as the ultimate fall-back just in case.

lifeonthehill

This all sounds exactly like what we will end up doing when we have things with school, the car and baby fund squared away. We wont be saving as intensely and will up our retirement but we still want to be saving for things we might want down the road.

vlagrl29

we don't really do a general savings.  we do have an emergency fund savings and a home improvement savings.  DH has been saving separately for a hot tub, but has been putting the cash into our safe instead.

formerlyGDaisy09

yea, we sort of view it as a rainy day fund, we floated a little money from there to cover things this month (pilates reformer, dishwasher) none were needs, we cash flowed some in our budget and floated some from general savings. 

sometimes we use it when we really need a night out and it doesn't fit in the month's budget (often by the end of winter we just need to get out of the house more). we usually only eat out once, maybe twice a month, but by the end of the winter we sometimes find we need to do it more often. 

We've also used this for those times we find an item we've been lusting after for a long time and we stumble on a deal.  Honestly I'm one sale away from buying all my garden seeds and plants for the year and borrowing from general savings to make it happen.  

jessica490

We don't really have a general savings either, just the ear marked accounts.

Wulfgar

With us, we have one savings account called "housing" which is really our housing repairs, emergency fund, semi-annual/ annual bills account.  We have a joint checking/ savings account that is slowly becoming our tuition account for son, some other monthly bills, and what ever is left over is savings for misc that is not ear-marked some other way.

vlagrl29

I forgot we have an "annual" savings which includes money that goes to - property tax on house and cars, car ins, home ins, life ins, xmas fund, personal property ins, and DD's dental exam cleanings (dental coverage for her at this time is too expensive to justify buying it)

cbee817

Our general savings account has no real purpose- it's just a cushion in case one of us loses our job, we have a large home repair bill, basically in case anything crazy happens. Right now, it has 4 months of expenses for our family of 4 (if we kept everything the same). Every 2 weeks, we add $500 to it, however every year, we withdrawl $11,000 for our Roth IRA accounts and last year, we took out $10,000 for the girls' 529 plans. We also dip into it if we need to- for example, one month our day care bill was $2,200 so DH borrowed $400 from it to cover the bill since his checking account was a little short.

Aside from this account, we also have a CD that has about 5 months of expenses- right now, it just sits, but it could be used to help with a DP on a larger home, more emergency money if we were unemployed for a long period of time, etc, etc. Now that we have kids, we want to have the backup in case something happens- I don't want them to feel the pains of financial hardship like I had growing up... it's a feeling no child should experience!

We also have a vacation savings account that has $5,000 in it- we plan to take the girls on some pretty big vacations (Disney world + cruise, London, Hawaii, NYC, DC, Summer trip x-country, Montreal, etc) so we wanted to start that account while they're little and we're not really going anywhere yet. All of our "extra" money goes into there- bonuses, fed/state tax returns, health incentive I get from work, health insurance waiver DH gets from work (he's on my policy), etc.