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Can we talk $$
without all the specifics... I'm looking at our savings/emergency fund which I guess should be 2 different things to begin with? I have heard that you should have 3-6 months worth of expenses set aside just in case, but how do you do that?
We have so mnay expenses and granted we do have a savings account, and I thought it was a good buffer, but when I really looked at the number it was more like 1.5 months worth of expenses AND we have plans for a good piece of that money for baby stuff and to use to top up my mat benefits next year. We both have relatively safe jobs but I don't want to just bank on that for a reason to not save enough.
I guess my question is this... do you have a savings and e-fund or just one? And how confident are you that it is enough.. sorry if this is too personal, I just feel sometimes that I'm the only one who spends way too much time trying to figure this all out!
Re: Can we talk $$
We have both, the emergency savings is 6 months of expenses and we just forget about it for the most part. Then we have another savings account that we build up and use as we want to make big purchases - vacation, furniture, travel, etc.
I'm comfortable with this finally but it took us some time to get up to this point. Our key was to pick an amount to go into these accounts each month and put that there first, so we treated the deposits as a bill we had to pay. Then when we got to the next pay period we took any month left from the previous pay and put it in one of these accounts. It actually started to build fairly quickly once we did this.
And I can spend hours trying to tweak our budget so you're not alone there
We have a few different savings funds (house, vacation, emergency and general savings). We have 10 months in our e-fund right now. We used to only have 3 months but after Joey being off work for 8 months we upped it. You just do not know what can happen and how long it can take to find work.
In our budget spreadsheet we have things broken into fixed and variable costs. The fixed costs get taken care of first (mortgage, food, cars etc). Then we take what is left and divide it up into our variable costs (eating out, clothing, savings funds). So each month money is going into each of these savings accounts. We stopped topping up our e-fund when it hit 10 months.
Do I think that we have enough in our e-fund? I do now, but I know that we didn't before. We were lucky as we can live off of my salary and didn't need to touch any of our savings while Joey was off. But if this was not the case then the 3 months we had in our e-fund would not have been enough.
IMO 1.5 months is not nearly enough. I would look into bulking that up. Also, I would have separate accounts (doesn't need to be physically separate just track how much of your account is for what type of savings) so that you do not touch your e-fund unless it is for an emergency.
I'm with you on this one. I have no idea how some people manage to have all these savings and still have a life and pay all the bills. For us to save 6-8 months work of expenses I estimate it would take me nearly 50 months.. that's like 4 years... hardly seems worth it.
To me, I'm more determined to pay off the debts we have so that once those are gone then I can put money aside in savings. The way I look at it (and yes this is probably wrong but I don't care) if I can pay off my credit line quickly (within the year) and not save.. if anything happens then I have my credit line to tap back into even though I don't have savings. If I don't have to tap into it, then I'll start a savings fund.
But that's just me.
I'm not a fan of a million accounts. I just find it makes working less worth it to split up money in these minute amounts that mean nothing at the end of the day. Two accounts is all we have... Chequing and savings. We're trying not to use our savings, but it means that our debt is just going up for when we need to buy things... so I guess in the end.. it's not really worth having that savings account.
I totally agree that 1.5 is not enough! However if only one of us were to lose our income we would have enough for 3-4 months, but I would feel better covering both our incomes. We have no consumer debt (minus one car loan), I think it's just my percentages of what goes where needs re adjusting... I keep thinking of that show til debt to us part and thinking that maybe the cash/jars system would help me figure it out even though I'm pretty detailed in my tracking on the spreadsheet at home.
I could probably benefit from having another account, I was just worried that it would become too much if I did it that way, but maybe it will make things easier..
Gail has a great spreadsheet on her website that will actually calculate how much should go into each jar based on the other numbers you put it. You should try it.
http://www.gailvazoxlade.com/articles_f/article31-3.htm
Actually we only have one account ? our checking account. We have a good amount of savings in there, possibly even enough for six months, but I'm hoping to use most of it on a downpayment on a home sometime in the next year. I don't imagine we will ever have a separate emergency fund, certainly not one that would get us through six months.
P.S. I've been nagging DH to figure out a better system for our $$. He's supposed to research and possibly set up a TFSA ASAP. We're also going to set up some sort of savings, RESP or not, for DS.
DH and I have a Savings account together that was originally for the Wedding and such but since the wedding it has not been used and sits with no money in it;
I on the other hand have always has a chequing and saving(high interest savings now) and DH's pay looks after 90% of our expenses.
So my pay generally goes to food and car insurance and whatever debts I have(student loan, credit cards)
So the day before I get paid I take whatever was not used that previous pay period and sock it away into my savings; In not time I have large amount that I put onto our line of credit, Dh and I feel that if we get that paid off then we will begin really saving in an actual account.
DH is luck that he has the military to fall back onto if anything were to happen to is job; but we like to think our jobs are both fairly secure.
we only have a savings and no e-fund, but now I'm thinking it might be a good idea! (i'm always late to a party)...
Thanks for the link to gail's chart!
We have savings, which is for e-fund. And then chequing for main expenses.
I find that even if I have enough for a year of expenses, I am always going to feel nervous that it is not enough, but that's just because I am paranoid like that.
When I found out how much I'd be getting on mat leave, I started tallying up the cost of everything we'd need for the nursery (without taking into consideration any shower items).
In fact, I bought a lot of stuff as I saw it on sale. I think once you buy the big main things you don't have to worry so much.
We have just one account, our savings account. There is definitely not enough in it right now.
I think I'm definitely going to check out that link.
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