Creative Financing

[Starport Seven-Five]

Never had a vacation account. If we don't have the money in savings for a vacation, we don't book it.

The vacation account is a savings account though? It's just earmarked money.

 

[tvguy]

The vacation account is a savings account though? It's just earmarked money.

I guess the best way to describe our budgeting process, is we have no budget, no earmarked money. Never have. There isn't money in there reserved for a vacation or anything else, but if there is enough money there for a vacation we book it.

 

[ruadisneyfan2]

Deleted

 

[Starport Seven-Five]

I guess the best way to describe our budgeting process, is we have no budget, no earmarked money. Never have. There isn't money in there reserved for a vacation or anything else, but if there is enough money there for a vacation we book it.

How do you handle sudden emergencies? Our large maintenance items?

 

[tvguy]

How do you handle sudden emergencies? Our large maintenance items?

Pay for it. I think the biggest sudden expense I had was needing a new roof. Had enough in the account to handle.

 

[georgina]

That's basically what we do also. Put everything into one savings account and spend as needed for house maintenance, travel, whatever comes up. I've never made separate savings accounts, unless it was a special tax benefit account like 529 for kids' college.

 

[kathy884]

I get paid bi-weekly. Although, the money is all in the same checking account, I keep a certain amount in my short term balance for discretionary and normal weekly spending and put the rest in a longer term balance into various funds. For me those funds are extra discretionary, charitable, clothing, car replacement, property taxes and insurance, and vacation. Note that retirement savings, health insurance, and HSA (health savings account monies) come off the top. I already have an emergency fund funded, but if that would drop or need to be used, I would funnel some that is discretionary right now into that regularly. I just have everything in an Excel spreadsheet that I update every two weeks after I am paid. I also update it quarterly to track investments (retirement savings allocations, etc.)

I plan vacations way ahead of time and note what they will cost and what month's of monies will go toward them. Right now I am funding a Moab, UT trip (see Arches and Canyonlands national parks) for early May of 2021. It's good to plan ahead, as for example on this one I bought airline tickets already and had to put a deposit down on a condo which I did with monies already in that fund. If I want to do a vacation that is sooner than the time to fund it or an extra little trip, I may shoot some discretionary funds over that way.

 

[kathy884]

I get paid bi-weekly. Although, the money is all in the same checking account, I keep a certain amount in my short term balance for discretionary and normal weekly spending and put the rest in a long term balance into various funds. For me those funds are extra discretionary, charitable, clothing, car replacement, property taxes and insurance, and vacation. Note that retirement savings, health insurance, and HSA (health savings account monies) come off the top. I already have an emergency fund funded, but if that would drop or need to be used, I would funnel some that is discretionary right now into that regularly. (My vacation set amount budget is $600 a month or $6600 a year.), Although I get paid bi-weekly I budget for twice a month and that gives me the occasional extra paycheck (sometimes three pays a month) that is kind of like a discretionary bonus.

I plan vacations way ahead of time and note what they will cost and what month's of monies will go toward them. Right now I am funding a Moab, UT trip (see Arches and Canyonlands national parks) for early May of 2021. It's good to plan ahead, as for example on this one I bought airline tickets already and had to put a deposit down on a condo which I did with monies already in that fund. If I want to do a vacation that is sooner than the time I need to fund or an extra little trip, I may shoot some discretionary funds over that way.

 

[disney212]

Its in our yearly budget. We have 6 months expenses saved and if we dip into that we deduct a portion out of the vacation budget to replace it. We are DVC and SO so WDW is a cheaper vacation for us. We fly on points, use our DVC and get 30 park days from our APs spread over 2 calendar years which we purchase every other year. It also helps that my DH works for a major hotel group so our mom DVC rooms are $35 a night.

 

[JenBush]

I have a pretty standard budget, but I also like to do “frugal challenge weeks”. I love a good game/challenge so I’ll meal prep and be creative with leftovers and then save the money that I normally would have spent on food and put it towards vacations.

 

[MickeyMouseCD524]

I have automatic transfers set up for different savings goals every time I get paid. But any extra money I make from OT or eBay I send to a specific goal for the year, and when that goal is hit I start moving the extra money to the other goals and start moving down my list of financial goals. But if I get a Visa gift card or something I'll use it to buy a gift card toward a "fun goal" like Disney or Apple if I'm saving for a new phone or something.

 

[tink89]

I have an auto transfer to our vacation account. I actually only do $50 monthly transfer. I have auto transfers for everything. I have auto transfer for our personal savings, , joint savings, vacation savings, bills account, DD college, retirement. So by the 5th of the month I already know how much spending money we have for that month to buy groceries, gas, ent, eating out.

All that will be paid for with credit cards which i will earn points/ rewards/cash and that is how i actually "save" for our vacations. Hotels, flights, car rentals are paid for with the points./rewards i earn. I also will do swag bucks and other sites like that and transfer any money earned in to our vacation account. And if we have any money left at the end of the month I will transfer between the savings/vacation accounts.

 

[tzolkin]

Pay for it. I think the biggest sudden expense I had was needing a new roof. Had enough in the account to handle.

I think you're missing what that poster was asking. You stated that you have never had any money in savings earmarked for a specific purpose and you also said if you have the money in savings, you book a vacation. They asked about emergencies or large items for you to clarify how this works for you.

For example, Do you have a minimum balance you would keep in the savings account as an emergency fund? Or perhaps you know you need to have at least $X in January to pay your property taxes so you can't drop below that amount so it will be there when you need it. To me, those two examples would still be "earmarking" or budgeting the money in the account for a specific purpose.

 

[tvguy]

I think you're missing what that poster was asking. You stated that you have never had any money in savings earmarked for a specific purpose and you also said if you have the money in savings, you book a vacation. They asked about emergencies or large items for you to clarify how this works for you.

For example, Do you have a minimum balance you would keep in the savings account as an emergency fund? Or perhaps you know you need to have at least $X in January to pay your property taxes so you can't drop below that amount so it will be there when you need it. To me, those two examples would still be "earmarking" or budgeting the money in the account for a specific purpose.

Most of our bills are paid out of our paychecks every two weeks, even unexpected expenses. We live within our means. Last time we dipped into savings for an unexpected expense that was beyond our means was 6 years ago when we needed a roof and I did't have $10,000 in the checking account. The back up easy to access savings account has 6 months expenses in it.
My next "expected" unexpected expense will be when my 29 year HVAC system dies. That could come today, or not on my lifetime. I base that on the fact that my parents ran their Lennox system 53 years without replacement, and I talked to the new owners recently and the system is now 60 years old and going strong.
And my water heater is 21 years old, and while the cost of water heaters and installation and permits has soared, I might be able to swing it out of our paychecks.
Oh, we bought a car Saturday and THAT normally would have come out of the savings account, but with zero percent financing, we decided to get the loan instead.

 

[imbatman]

I donate plasma twice a week

I've never needed it, but thank you for your donation that might help save lives.

 

[wishuponastar1984]

Pay for it. I think the biggest sudden expense I had was needing a new roof. Had enough in the account to handle.

How do you handle sudden emergencies? Our large maintenance items?

I would say that this person is using this post as a humble brag. "look at me, I make so much that I just zip my card without a care in the world." Not all of us are so uncouth. They didn't really want to contribute to the conversation, just make others feel envious. Budgeting is a personal matter and every person has to do what works for them. I too can afford the "zip the card approach" but because I grew up with good money habits I still have a budget that I reconcile every quarter to see how I am doing. I always like to do a hard reset after the Christmas holidays as that is when things seem to get off track. Budgeting also helps with my bottom $ line and my waist line as I see how much I overspend at times on dining out and alcohol. Just remember you can make $500K and still be poor and can also make $100K and be rich because you prioritize and strategically plan your spending.

 

[tvguy]

I would say that this person is using this post as a humble brag. "look at me, I make so much that I just zip my card without a care in the world." Not all of us are so uncouth. They didn't really want to contribute to the conversation, just make others feel envious. Budgeting is a personal matter and every person has to do what works for them. I too can afford the "zip the card approach" but because I grew up with good money habits I still have a budget that I reconcile every quarter to see how I am doing. I always like to do a hard reset after the Christmas holidays as that is when things seem to get off track. Budgeting also helps with my bottom $ line and my waist line as I see how much I overspend at times on dining out and alcohol. Just remember you can make $500K and still be poor and can also make $100K and be rich because you prioritize and strategically plan your spending.

Well, my wife and I have never brought home over $100,000 combined income, so if that is "making so much" , so be it. But this is the DIS where some think an individual annual salary of $150,000 is middle class. No, I am NOT bragging. I am cheap* and I make no bones about it. I am also 63 and about to retire so I have had 40+ years to save.
Yes budgeting is a personal matter, but watching the financial shows over recent years, a lot of people don't know the difference between a necessary expense and a luxury expense.

*How cheap am I? Got rid of my family car 2 years ago that I had 31 years. Been in the same house 37 years (instead of the average 7 years, saved me tens of thousands of dollars in real estate commissions).........kept my cell phone 14 years......cut my own lawn, one of the few on my street not spending $100 a month for a gardener. It adds up quickly.

 

[QueenIsabella]

Well, my wife and I have never brought home over $100,000 combined income, so if that is "making so much" , so be it. But this is the DIS where some think an individual annual salary of $150,000 is middle class. No, I am NOT bragging. I am cheap* and I make no bones about it. I am also 63 and about to retire so I have had 40+ years to save.
Yes budgeting is a personal matter, but watching the financial shows over recent years, a lot of people don't know the difference between a necessary expense and a luxury expense.

*How cheap am I? Got rid of my family car 2 years ago that I had 31 years. Been in the same house 37 years (instead of the average 7 years, saved me tens of thousands of dollars in real estate commissions).........kept my cell phone 14 years......cut my own lawn, one of the few on my street not spending $100 a month for a gardener. It adds up quickly.

How much you make versus how much you bring home are VERY different things. Look at all the executives who get stock options and other deferred compensation. And for more regular folks, you can put money into 401ks (well above the company match, the amount varies by company, based on a formula). You can also put money in a Health Savings Account, which some people use as another form of retirement savings. Some companies have (or had) stock purchase plans, as well. I'm not suggesting there's anything wrong with utilizing any of these methods to defer compensation, just that it's very misleading to use them, and then act like you're living poor (or middle class) due to income.

That said, I will freely admit that we no longer need to save for retirement. But, my DH still contributes to his 401k, to get the full company match. We just can't bring ourselves to leave free money on the table. We're also cheap, but my comparing our cheapness to yours would be apples and oranges (we have more kids, 2 are minors, etc.).

 

[tvguy]

How much you make versus how much you bring home are VERY different things. Look at all the executives who get stock options and other deferred compensation. And for more regular folks, you can put money into 401ks (well above the company match, the amount varies by company, based on a formula). You can also put money in a Health Savings Account, which some people use as another form of retirement savings. Some companies have (or had) stock purchase plans, as well. I'm not suggesting there's anything wrong with utilizing any of these methods to defer compensation, just that it's very misleading to use them, and then act like you're living poor (or middle class) due to income.

That said, I will freely admit that we no longer need to save for retirement. But, my DH still contributes to his 401k, to get the full company match. We just can't bring ourselves to leave free money on the table. We're also cheap, but my comparing our cheapness to yours would be apples and oranges (we have more kids, 2 are minors, etc.).

Okay, I guess I'm rich. But you sure wouldn't think so if saw our gross income.

 

[QueenIsabella]

Okay, I guess I'm rich. But you sure wouldn't think so if saw our gross income.

Well, my point was NOT to get you to reveal your income! I really was just trying to point out that people can measure their gross, or their take-home, and either start in very different places, or end up in very different places.

BTW, whenever I get into a discussion of defining "rich", I point out that a family with 4 children and a stay-at-home mom is not focused on acquiring material wealth. If you've got a roof over your head, food in your belly, your family is healthy, and maybe you have some money put aside--you're doing well. No need to quibble over where the commas and decimal points are.