new to mm

frugalliving80 · February 2016

I'm Emily! I wanted to say hello to everyone and introduce myself. I am married with 2 wonderful children and we live in Georgia! I also have a MM question for all of you. I decided to look through my online banking to see how much we spent last year on Emergencies/All of a sudden crap happens just because it was slow at work and OMG from car repairs, to a clogged up A/C and other things that came up, we spent over 3000.00! Does anyone else keep track of this? I am thinking about setting a 'BUDGET' starting next month when I do our monthly budget and give us a set limit of 3000.00 this year from ,March to December just to use for Car repairs, home repairs, etc...

Does anyone else do this?
what are you guys yearly emergency fund?
do you use the cash in your account or credit card?

als1982 · February 2016

We've never tracked this sort of thing, but it would be really interesting to do so! We personally just cash flow emergencies as they come up. I'd rather pay down debt and thus pay less interest on that debt, than earn little to nothing by stashing away a big emergency fund in a traditional savings account.

hoffse · February 2016

We ran into a lot of this last year because we had just bought a house and H was beginning his law practice.

We had over $1500 in emergency home repairs and over $4,0000 in other cash-flow emergencies related to getting his practice set up. Oh and clothes. We spent a small fortune on clothes last year, none of which was budgeted for.

This year we started a $500/month sinking fund for annual dues. It includes everything we have to pay for (I'm an attorney as well and have my own fees). Yes, it's very high. Our profession is expensive. More than half of it goes to obligatory charitable donations though, so we get a good bit back at tax time.

We also started a $300/month clothes sinking fund. That might end up being high because we actually haven't spent any of it so far in 2016, but we tend to do hundreds at a time when we have to buy new suits, etc. This is our first year doing a clothing sinking fund, so we'll see if we gauged it right at the end of the year.

brij2006 · February 2016

Welcome! This is a great board to be on.

We do sinking funds for various things like house and car repairs. We budget $1,000/year for tires (have 5 vehicles), and then we put about $150/month aside for house repairs and $150/month for vehicles.

We have an emergency fund of 6 months of expenses, but we do not add to that. If we have an emergency, we re-work our budget for that month and try as hard as we can to fit it in by making a ton of cuts. The Efund is a lifeline to me, so I would rather only touch it in the event of a job loss.

We're anti-credit cards. So it's cash, check, or debit card only in our house. But we follow Dave Ramsey's principals.

short+sassy · February 2016

Hi Emily and welcome! I'm Jenny and live in New Orleans, LA. Married, but no kids (by choice).

Most of the other PPs have sinking funds like you are talking about. Overall, I think they are a great idea. I personally don't use one, but that's only because I'd rather pay down my Home Equity Line of Credit instead of putting the same money in a savings account. I'm able to cash flow most emergencies/large purchases within the month but, if I can't, I can fall back on withdrawing from the HELOC.

However, if it wasn't for having that large a line of (relatively cheap) credit at my disposal, I'd definitely keep a substantially larger e-fund for home/car/health costs and annual expenses. As it is now, I have a $1,000 e-fund.

I usually pay with a credit card, if I can, for the points. But then I pay my credit cards off every month...unless I am in a zero interest promo.

CuriousKiddosMama · February 2016

Hi! I'm Autumn and I live outside Houston tx. We use a zero based budget so if I really wanted to I could go back and see what we spend on car stuff or whatever every year. We use the sinking fund method another poster talked about. For car repairs I believe we put away 200 a month and just use it as needed. We have several sinking funds and this is where a good chunk of our budget goes to every month. That way we aren't tempted to dip into our emergency funds by things that really aren't an emergency (if you own a car, it's eventually going to need work!) We also do a mix of cash envelops and debut/cc. Cash envelops are for the day to day stuff, so honestly most of our budget. Cc is for things like the monthly bills (cell phones, heating, and gas for the cars because I hate paying cash at the pumps). We end up putting very little of our budget on our cards generally (like 10%). I like cash even though we have a good budget program because it's a good fall back. If dh doesn't put a transaction into the budget (which happens probably once a week) he still spent the cash so once it's gone, it's gone. When we were using cc for everything it was a lot of combing through the card at the end of the month to make sure the statement matched with what our budget software said is should be, and then copying over all the missed info. Anyways, hope that helps! Welcome to the board!

blondie42107 · February 2016

Welcome! We try to cash flow those things but if needed we can pull from our emergency fund.

jessica490 · February 2016

Welcome! If an emergency comes up we just take it from our e-fund and pay it back afterwards.

emily1004 · February 2016

Welcome Emily! I'm Emily!

We don't usually keep track of "fun money" but this year, after the fact, I did. Especially since we both made more money. One, it pushed us into a higher tax bracket, and we spent and donated a lot. More than what we would usually be comfortable spending on just so-called crap. We are in the process of starting a wine collection and the next project is a wine cellar under our basement steps. Not in anyway MM or practical for that matter, but we enjoy it. Plus, we will be getting new windows this spring. That is obviously more of a necessity for the house then the wine cellar.

As for an emergency, that what an e-fund is for. That seems to be what your describing IMO in your OP, as an emergency and necessities. Anything that comes out of that account is like what PP jessica said, it gets paid back afterward, so yes, that is tracked.

cbee817 · February 2016

Welcome to the board! I have 2 little ones as well- DH and I both work. Our emergency fund is split up right now- about 4 months of expenses are available immediately (savings account) and about 5 months of expenses are in a CD ladder of 1-5 years. We also have a vacation fund that has over 1 month of expenses in there if we needed to pull from that. I tend to over save for emergencies because we have 2 kids and DH has had several lay offs in the past but is now at a much more stable school district (English teacher). We tend to pay for everything with credit cards- easier to track for us and to dispute if there is an issue. We also use the points for gift cards, free amazon prime membership, etc. We pay our balances in full every month and the only debt we have is a mortgage and 1 car payment. DD#2 has 1.5 years left of day care- after that, we're considering moving a larger home in a better school district (DH's district he teaches at now).

LillibetteV · February 2016

Welcome! We keep a sinking fund for expected, but irregular, expenses such as home repairs, car repairs, quarterly water bills, and annual insurance bills. A lot of the time we're able to cash flow these things so we leave the sinking fund alone to build up for bigger repairs down the road (and with a house built in 1869 there are always bigger repairs down the road!). This isn't tracked in any overly detailed way - but we also don't ever use it for anything but it's intended purpose so their isn't much need.

The emergency fund is tracked more closely and getting it repaid after money is used from it is priority number 1. Emergencies for us are true "omg no one could have seen this coming, wtf life, I can't believe this happened" moments that can't be covered by cash flow. I don't count home and car repairs as emergencies because if you have things you have to anticipate that they will break so that's what the sinking fund is for. We have only touched our emergency fund ONCE and it was to pay for emergency vet bills when our dog was hit by a car last year. We paid for everything on a credit card (because they won't do anything for your furbaby until you pay) and then paid off the card with the emergency fund. At least we got a huge amount of cash back on the cards right?

labro · February 2016

Welcome! Like others, we try to keep a sinking fund for expenses that aren't frequent but will end up costing a lot like car repairs, car replacement, major home repairs, etc. It's just a line item in our budget where a certain amount is allocated every month but we don't spend that money until something comes up and we need it. I'd rather not pull from our e-fund unless we don't have enough actual cash to handle it in our account.

PurpleBookmark · February 2016

Welcome

. At this point the majority of our extra expenses are co-pays and car repairs. We don't have sinking funds for these at this point, we try our best to cash flow or it comes out of general savings. I hope to have sinking funds at some point, definitely on the financial goals list!

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