So. It’s that time of year again (fall) when my husband and I recommit ourselves to our financial goals by eating at home, saving money, and paying down debt. For some reason we fall off the wagon over the holidays (okay, not “for some reason,” obviously) and then spend spring saving up for a summer vacation, but here we are again, recommitted.
It’s our thing.
This year we’re better off than last year in some ways (only debts are cars and houses, I got a $15k raise in February, we’re happy with our vehicles) and worse in others (my husband’s job is dying a slow death, we’re needing to add “tuition” to our savings plans) but we generally feel pretty good about our money situation.
Last week I asked us a simple question: how much money would we need to have in order to not worry about money? Rather than answer in terms of income, as we might have in years past, we both answered in terms of savings. Me: $10k as a starting point. Him: 3 – 6 months’ expenses.
Our goals look like this (in no particular order):
- $10k e-fund: $10,000 (yea, duh)
- Pay off cars: $8000
- Big anniversary vacation: $5000
- Travel (smaller trips): $2000
- Tuition: $2000
- Baby fund (thinking ahead): ??
- Fun money: ??
- Buffer savings: ??
Lots of goals. Limited funds to allocate. We’re therefore grappling with one question: do we do one thing at a time (and throw all our money towards that one goal until it’s tackled) or spread our savings across many things?
We’ve had good experiences with focusing on one goal at a time (a la Dave Ramsey’s baby steps) but then we fall off the wagon when we do or need anything else. Not good.
On the other hand, I lack the patience to see a bunch of balances increase (or decrease) incrementally over time. Which reminds me: this year’s personal goals need to include “cultivate patience.” But along with cultivating patience, allocating money to different accounts automatically means we can save on auto-pilot. This is a good thing. The less I think about money, the more successful I am at living in abundance rather than scarcity.
So, how do you save? Many accounts getting bigger in increments or one thing at a time? How many savings accounts do you have? (We have three – four, which drives my husband nuts… but our local banks won’t let me subdivide savings so I use ING Direct, too.) What percentage of your income goes to savings v. debt repayment v. fun money? I’m particularly interested in fun money, because I think we give ourselves much less than most people – and then we buy something expensive and fall off the wagon.
EXTRA CREDIT: Other Helpful Money Posts Across the Internets:
Emergency funds: Pantomime Papers
Living Within Your Means: Nodakademic
Hidden Costs to Home Ownership: FortyTwentyFour
Why Rent When You Can Buy? US Meets UK
Affordable Groceries: That Wife