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.
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?
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