I got my Google/AdSense payment today. After taking out 10% for tithing I transferred the rest to the EF.
$3569.33 Balance Forward
+__99.95 Deposit Added
$3699.28 New Balance
This leaves me with $300.72 to go to hit my next mini-goal and $36,300.72 to go to hit my ultimate goal.
Viewing the 'Emergency Fund/Coin Jar' Category
I got my Google/AdSense payment today. After taking out 10% for tithing I transferred the rest to the EF.
$3541.33 Balance Forward
+__28.00 Amount Added
$3569.33 New Balance
The $28 is what was left in the grocery envelope and the household envelope, before I refill them today. I have $430.67 left to go to hit my mini-goal of $4000 and $2979.91 to go to hit my larger goal of one month's income saved, which would be $6549.24. I know people generally only save expenses and not income for their EF, but for us, we need to save income due to the fact that if there is a job loss again, we will have to pay an extraordinary amount for an insurance plan above the month's normal expenses because of our daughter. When we get to 3 month's income saved I will feel good again, but even better when we have 6 months in the bag. Although I'll probably just round it up to $40K in the long run.
I have decided to start saving whatever is left in the grocery envelope at the end of the two week period and depositing that into the Emergency Fund as I am a little concerned about what happens if we do have to pay that medical bill that I think crossed in the time period between out of pocket max being paid and submission. It's not much, but it it is a little bit and makes me feel like I am being proactive. I will also be dumping all of my change at the end of two weeks and rolling it for deposit. I try to use the change as I go, but I don't always if there is a long line behind me.
$3524.83 Balance Forward
+__16.50 Deposit Added
$3541.33 New Balance
$3520.83 Balance Forward
+___2.70 C1-360 Interest
+___1.30 CU #1 Interest
$3524.83 New Balance
Amber was asking on her last post about how much is too much to save in your sinking funds and was it necessary to do that when you had an emergency fund, after listening to some speaker who did not think they were. My answer got so long I decided to just make it into my own post.
As for the sinking funds, they are very necessary. To me the emergency fund is for true emergencies, not the expected expenses that can come up over the course of a year or two. Emergencies like a tree falling on your house, flooding taking out the bottom floor of your house, a car accident that puts you in the hospital due to an uninsured motorist, your car engine just dying for no discernible reason, or losing your job and not being able to find work for six months (or longer). Not for the things you can really plan for.
What a person might do is sit down and figure out how much they really need in each fund. As for the house repair fund, I'd work towards having enough in there to replace your roof. It may be several years before you need to, but those are very expensive. You probably need to eventually have saved up $7 to $10K for that, which should also cover lesser things like painting, faucet or toilet repairs, deck or porch repairs, etc. Maybe more if you want to be replacing your carpets or windows at some point.
The amount in your car maintenance fund should probably be figured by how old your vehicle is and whether or not you have any large repairs that might be coming up. For me, my van is coming up on 8 years old and will likely need new brakes when we hit 50,000 miles, which is 5000 miles away. It is also probably going to need new tires at about the 60,000 mile mark. So I am working towards saving up about $2000 for that over the next two years. We don't put that much mileage on the van. We might need to replace a belt or a fuel pump along the way as we haven't had to so far.
I have an Appliance Fund in case one of those things go out. How old is your fridge, your dishwasher, your stove, and your washer and dryer? Having the money to go for that is a good idea if your appliances are old.
And of course having sinking funds for your car insurance, sorority dues, HOA dues if you have that, and any other six month or yearly expenses is just smart planning.
Having enough in a medical fund to pay your deductible for the year is a tremendous relief. To not get smacked upside the head with emergency medical expenses and have to worry about shelling out a bunch of money you do not have is life-altering. It is so much better than having to scrape for 3 to 12 months to get it all paid off and is worth it's weight in gold.
It is all about being prepared so these things don't destroy your finances. So figure out what works for you. Do not listen to pundits who are there to make a quick buck and may not have the facts and figures to back them up. Use common sense and logic and listen to people who have been there and who have done that instead.
$3516.95 Balance Forward
+___1.30 CU #1
$3520.83 New Balance
So I am going to start at least putting the change into the EF again. I made a deposit today of $15.50 in rolled coin. I am not really saving for the EF right now while we pay off that last debt, but I think if there is any extra money left in the envelopes when it is time to refund them, I will go ahead and sweep that money into the EF. It's not much, but it feels like something.
$3501.45 Balance Forward
+__15.50 Amount Added
$3516.95 New Balance
My next mini-goal for the EF is $4000, so I have $483.05 to go to hit that.
As per usual, I have come down with something a few days after our visit to the ER, a nasty stomach bug. I am on the way back up, though, so fortunately it isn't going to be some long, drawn out thing. My food is staying down today and my head feels better, and I finally woke up feeling well-rested. My tummy is still a little tender, but I think by tomorrow I will be okay. I am supposed to be beta testing a finance thing for someone, but haven't been quite up to it yet. Maybe tomorrow.
We have five days to go until payday. This will be DH's first paycheck as a permanent employee and will have two weeks on it. I have set up my budget for August with two bi-weekly pay periods instead of weekly pay periods. The first week will have 15 hours of OT on it and the second week will have 6. DH was so tired after spending Thursday night in the ER with DD, so I told him if he was too tired to stick it out, not to. OT is nice, but not at the expense of his health.
From now on he is only authorized to get 10 hours of OT a week. He won't be able to set up the 401K until after he gets his first automatic deposit, so the paycheck on the 24th will start the 401K contributions. We have decided to start them even though we haven't paid off the debt yet. We both feel like we are already too far behind on retirement to wait, even though Dave Ramsey says to wait until the debt is gone. It is messing too much with my security issues not to start it up and DH also wants to do it.
I am having DH run the numbers for me on how much to contribute. We are debating 5% and 7%. 5% is how much the company matches. 7% is the break even point on taxes. I just need to see what the end numbers will be. Then we can make a decision and I can do the final tweaks to the budget. The August budget is going to be weird and not be able to follow the budget template, but from September on it'll be set for the rest of the year.
DH will be getting what amounts to a 12% raise, but it is because our insurance premiums will be so much lower in September. He is not getting an actual raise, although his boss did try and says he will try again in 6 months. It will feel like a raise. Also in 18 months another guy is going to retire and his boss says he wants DH to take over his position which would be a promotion and likely a raise with the increased responsibility.
We will not increase our level of spending, though. All extra money will be put in the 401K and to pay off this last debt. Once the debt is gone, then the debt money will go to an EF of 3 months of expenses. Once we hit 3 months expenses, we will split that portion in half. One half will continue to build the EF until we hit six months of expenses. The other half will go towards a down payment fund for a house.
Once the EF hits six months of expenses, we will adjust our retirement savings to 10% and the remainder will go into the down payment fund. We may be saving for some time as I don't want to have a mortgage of more than $200,000.00. I really would prefer $100,000.00 mortgage, but that is not practical where we live.
If MIL gives us the $13K a year, we will fund a spousal Roth IRA with some of it and the rest will go into either the EF if we are still building it and then the house down payment fund.
I probably should start a sinking fund for a vehicle replacement. Right now our vehicles are in excellent condition. The 2011 Sienna has only just hit 40,000 miles. The 2007 Tacoma has a lot more miles, but is in great repair, so I think we have many years to go. But when something does go, we will want to get something nice, a used car in the $20,000 range or less. I reckon the Sienna will last another 15 years, but the truck might not. With Toyotas, though, as long as you keep them up, they last a very, very long time. Both will need new paint jobs, the truck first, and then eventually the van.
I'd like to take a vacation at some point, too. We haven't been on one in several years. So that should likely be one of our sinking funds as well. Hopefully, we will be able to achieve all of these goals in the next six years or so. I would like to get out of here sooner, but I just don't think that is to be.
Well, we've decided to go ahead and put the $5000 into the Emergency Fund until we know what is going to happen with DH's job.
$4117.15 Starting Balance
+5000.00 Amount Added
$9117.15 New Balance
I am hoping to get this to $10,000 by the end of the year.
MIL gave us $5000 yesterday. I have a lot of mixed feelings about what to do with this money. The strongest emotion says to stick this right into the Emergency Fund. That would bring it to nearly two months of expenses. It has been very hard having it down so low. And we still don't know what the future holds job wise. His job with this company keeps getting extensions, but we are living 3 months at a time, it seems.
Another part of me feels like we should throw it at debt, we are supposed to be throwing everything there, but DH and I both feel weird about taking money from his mother to throw at the loan to my mother. Yet at the same time, we both want that debt gone. It has been hanging over us too long and prevents us from saving for our future. I also don't know how my mother would feel about taking that money if she found out where it came from, which I have no intention of telling her, but she's nosy and has a way of finding stuff out. We are not telling the kids about this money. So if we do decide to pay it to her we might stretch it out over a few months so it doesn't come in a big lump.
Another thing we could do is open a Roth IRA. Probably a spousal IRA since I have nothing saved for retirement at all and I'd feel better if some was in my name, too. If we were out of debt, that is likely what we would do with the majority of the money she is giving us, open a Roth for both of us. But we aren't. I know once we are out of debt we can really contribute, so it comes back to that. It always comes back to paying off the loan.
There are a few things we could really use the money for, like I need new glasses, and we need new rabbit cages, and DH would like a new laptop or at least to have the money available to get one when his laptop gives up the ghost, which it has been threatening to do for the last year or so. It would also be nice to get DS into a driver's class so he can actually learn how to drive. DH hasn't had the time to teach him and my brain hasn't been in the right place to do it, either.
But I know we can get by with the old cages and that we have started a fund for the laptop. We need to find the time to teach DS to drive even if DH has to do it on the weekends. The glasses I can probably afford to buy outright in another month out of our medical fund, but my eyes are really, really bugging me and my prescription has changed a lot so the temptation there is strong.
So maybe we put $4000 into the EF and I get my glasses, and the rest of that $1000 we put into the laptop fund. Then when we know for sure what the situation is long term with DH's job, maybe we can take the remainder to throw at debt.
I do know that MIL plans to give us another $7000 this year. She's given us $6000 so far. I am not sure when that will happen, though. At that point we will have to figure out what to do with that money all over again.
Maybe with the momentum we make on debt in these next several weeks with all the overtime, it'll hyper focus us on getting the loan gone, or maybe it'll make it easier to keep it in the Emergency Fund.
I really don't know how people manage to stay gazelle intense on debt payoff if they are worried about future employment. We've got to figure it out though, if we ever want to be done with this and save up for a house and contribute to retirement. Right now buying a house again seems so far out of reach.
I'm not sure what we are going to do. I think for now just let it sit in savings until we are more sure of what we should do and have had a chance to discuss it more.
What would you do, not knowing if you had a job past the end of August, but things seemed somewhat promising? Wait until September? That probably makes the most sense.