I do have a suggestion. Do not trade in your van, instead sell it yourself. You will get more money. Put this money with what you have saved and you’ll be in a good position to bargain for your van. I’m not familar with your states tax laws but here in Geogia if I buy a vehicle from an individual I do not have to pay sales tax.

Trent, I’m going to have to think about starting an opportunity fund too. I can see how that can really be a benefit. For example, buying something in bulk might require more money now, but can save a lot more in the future. I can also see it if I need to go back to school and take a class or two on a skill that can significantly increase my income.

Great advice like always!

Shogun:
Whats the “2 page impressions X a 2% CTR X 25cents”. How did you arrive at that numbers?

@14 Julia
Exactly what I do for dinners/hanging out with friends. I budget a certain amount every pay check that I allow myself to use. Therefore, unexpected expenses are accounted for and not going into savings.

@21 Matt J
Are those actually 7 separate accounts? or are you splitting 1 giant account into 7 separate “piles” in the speadsheet?

It’s not so much about willpower or paying off debt (my only debt is a mortgage right now) but about bookeeping and budgeting. I’m saving for a car – I can see at a glance how close I’ve gotten to my goal. I have a separate bucket for large non-monthly bills (car insurance and tags) so that I don’t have to deplete my long-term savings to pay them. Another bucket is for Christmas gift and travel money. I have a ‘Misc’ bucket that I can spend on whatever I like. My next purchase out of that bucket will be a new bed.

Bascially, it said that no matter how much money you make, you’ll still spend it.

Well, to me, that’s a bunch of crap. It demonstrates a complete lack of discipline.

A perfect example–in two months, my wife’s car will be paid off. That’s a monthly $227 bill I no longer have to pay.

So, what are we doing, figuring out now how were going to spend the extra $225 or so we’ll have every month?

Absolutely not…I can’t wait to enjoy the fact that I have that much less in monthly bills, and will more than likely invest most of it.

Why? because its the right thing to do at this point in our lives…

I too am a fan of funds, way beyond what is necessary. I guess I just like to make my monthly budgets as smooth as possible, so if I know I spend an average of $100/month on car stuff, I just create a fund and put $100 in it. Then when I need a $400 repair, it doesn’t affect my budget. It helps me think about how much I really have to spend and how much I really have saved (versus money that is just waiting to be spent).

[note that I don’t actually create accounts, I just track it in my budget spreadsheet)

Co-mingling is temptation everyday. If you have say $500,000 saved up in cash, you will be tempted to spend it in one bank account and fund. But if you sock it away in another bank and never see it, temptation goes away.

Shogun

Am I in the ball park? If so, I don’t think you have to worry about an emergency fund, or paying off debt no?

Someone please correct me if I’m way off. I’m just curious, and i’m sure many others are too.

Thnx

I guess I technically have three funds of savings. I love the idea that the emergency fund is separate from everything else and only gets touched when there is an actual emergency. My savings fund is simply my savings. I have a third, much smaller fund that I tap into for small, unplanned expenses like dinners or day trips with friends. I don’t keep it with savings because I do like to keep track of exactly how much I am spending on it so that it doens’t get to be too much.

Where as some people would rather just lump everything together and go from there.

-Gen Y Investor

I’ve always been a saver, and took many “frugal” steps (emergency fund, generics, scratch cooking, seldom using AC) even before I started thinking about seriously saving. Since then I built up six months’ emergency fund, have a separate account for the regular large but infrequent expenses (vet bills, my deductibles, termite treatment, car insurance lump sum, etc.) and set aside $1200 to have someone *else* besides me sand and refinish my floors. (I wasn’t lazing; I retiled the bathroom, installed a pedestal sink I got from Freecycle, and repainted the kitchen, hallway, and spare room.)

But I have also had a constant set of minor emergencies which have drained a month out of my emergency fund. New bifocals ($500, not fancy frames, but it is a tricky prescription) because my old 8 year old frames disintegrated. $1500 of car repair and maintenance (it’s a Subaru, only 175K on him, and has been maintained). A very sick cat ($1200). Refrigerator repair, roof repair, and a new fence … none of it planned, all of it necessary. The 401K isn’t getting much funding this year, and while the Subaru’s going to last for quite a while yet (God willing and the crick don’t rise), the New Car Fund also needs some attention.

So I’d like to know more about what happens when you face a period of sustained draining of your resources. How do you handle it? What strategies do you use? How do you keep from kicking the floor and screaming when everything you’ve worked hard for drains out in a flash? (I look at it as 1) not nearly everything, and 2) think how bad it would have been *without a cushion!)*

That being said, mine is spread out in two accounts. One pays one-tenth of a percent more than the other, but the one that pays less is easy to access online. The other one requires an in person visit.

I like the way ING direct allows us to set up specific accounts, and I’ll probably add a few accounts as motivators later on.

Don’t even think it!

It’s easier for me to spend less and live with what I earn and already have than to try endlessly to earn more and more income to support my current lifestyle

In response to people not understanding the purpose of parsing money into different buckets: humans do better with organization and reminders of goals. When you have the money you’re allowed to spend in a checking account, and the money you’re trying to save for various goals in different savings accounts with automated contributions, you will meet your goals faster.

The exception to this is if you are a black belt tightwad, ala Amy Dacyczyn of the Tightwad Gazette. In this case, you’re not wasting a penny any way. But even Amy and her husband would wait until they had enough extra money and then purchase CD’s. Obviously they did that for extra interest benefits, but it also helps to not have it sitting in there.