Which Umbrella Should I use Today?

FiestyFroggy and I were having a conversation on one of my recent posts. I was sharing the fact that I had a load of expenses come up after setting my really aggressive Goodbye Debt! Plan.

FiestyFroggy’s suggestion was that I create a discretionary spending account that would help alleviate some of these unexpected things that pop up from time to time. Technically I have a savings account for everything. However, I’m  a bit afraid that I won’t use them on the ‘right’ things so I’m rather strict with myself.

It’s as though it’s raining and I’m trying to figure out which umbrella will be the perfect solution to prevent the drops from wrecking my budget.

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Here’s the list of my savings lines:

Line When I use it Budget Allocated
Vacation For planned and unplanned get away expenses e.g. the wedding we’re going to. 2%
Life Happens To purchase things that don’t fit my budget but are really important to me. For example planning my friend’s baby shower or purchasing from the urban garden. 2%
Car Oil changes, maintenance, new brakes and the beginning of a savings for another vehicle for when this one goes to car heaven. 7%
Home Reno We want a new kitchen, though ML has a few other projects he may want moved up. He’s got an eye on putting in a patio beside our deck so this money would go toward that. 3%
Gifts I figured allocating an amount would help keep us on track and ensure that we weren’t throwing ourselves into debt for gift giving occasions. 4%
House Insurance I budget every month so when June rolls around I can pay that fee without taking a hit. 4%
Medical For the things that aren’t covered by insurance as well as to ensure that I’m not paying interest if my insurance payment doesn’t come when anticipated. 1%
Sky is Falling In the event of job loss or catastrophic life event. 5%
Fun Fund When I had money left over from my budget I would put it in here. This is for those things that aren’t neccessities, may not be good investments but are pure fun.

I don’t budget using my income, rather I give myself a set amount of money to pay for necessities, life expenses and savings. The rest of it goes towards my debt. This way when I’m over budget I’m still making a sizable debt payment.

Though I have funds in my Life Happens  account I’m rather careful about using them. I feel more comfortable dipping into my debt repayment for one off expenses than using this account for things that don’t truly align with my goals.  I haven’t been under budget for a bit so the Fun Fund is sitting at $14 right now.

My current savings lines align with  my goals and the life I envision for myself. I’ve found that when I have  more money available to me I say, “Yes!” to things I shouldn’t. I end up cluttering my life and making myself miserable because there is budget room. I go out for drinks with a person I don’t particularly care for, eat at a restaurant I’m not fond of or purchase items that are cute but don’t have lasting value. Keeping my budget a bit tight has helped me, and continues to help me, achieve my goal of simplifying my life.

Once my debt is paid off and ML is debt free as well I’m going to start putting a set amount in the Fun Fund. I can still put leftover money there but it’ll be a great way to save for those little things I want to do.

How do you save for rainy days?

Image by Sira Anamwong at FreeDigitalPhotos.net

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13 thoughts on “Which Umbrella Should I use Today?

  1. tenleygwen

    I started out with a very detailed budget, with individual categories for pretty much every expense. For example, I had individual categories for “Hulu,” “Netflix,” and “Amazon Prime.” (We watch a LOT of streaming video in my household!) I’m gradually condensing categories to keep things streamlined, so that for example I now have an “Entertainment Subscriptions” category that holds all three of those expenses. But I still have a fair amount of categories — twenty or so all told — so that I can be specific about how much I’m saving for Xmas gifts vs. other gifts; car maintenance vs. home maintenance; groceries vs. pet supplies vs. personal care; this summer’s vacation vs. the big trip I’m planning two years from now. But it’s always evolving! I like how you have your umbrellas organized, and I think that everyone’s budget should reflect their priorities and what works best for them. It looks like yours does that so good on you!

    Liked by 1 person

  2. SHaderlie

    “Keeping my budget a bit tight has helped me, and continues to help me, achieve my goal of simplifying my life.”

    I LOVE this! I realized some years back that I am very grateful that we didn’t start our married life with loads of money. I am glad we have had years to practice and decide and fail and try again to figure out just what is most important for us. A tight budget, wether set by circumstance or by choice, has helped us to keep our priorities in order for what we really want in life.

    Liked by 1 person

  3. I like your lines and reasoning. I budget very similarly in regards to allocating a set amount of money, rather than % of income. Obviously right now my income is $0.00 haha. I have have a very fancy spreadsheet and there are 20 lines in my budget, but not all of them I budget for. I just have those categories so if I DO spend money in those categories, I can capture it and see how much it added up throughout the year. Like “stupid tax”. Last year I paid a “stupid tax” of about $3k because I spilt water over someone’s computer and broke it (d’oh) and I backed into someone’s car and I was a good citizen and left my details (d’oh).

    Liked by 1 person

    1. I probably should do a proper % but I only do it here as I still hesitate to share numbers. Plus seeing the % helps me see how my money is being allocated.
      I hide my stupid tax in misc. and life Happens lines 🙂

      Liked by 1 person

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