Saving for multiple things

[tzolkin]

Even if they are on step 3, they still shouldn't be saving for a vacation or new car. They technically should never be saving for a new car. A used car only.

Which is why many have suggested focusing on the real emergency fund (6 mos, not just $1000) first. That's the most important, then save for the vet, vacation, and car.

Since the OP mentioned that the current car is 13 years old, I would think any used car could be considered a "new" car. I think you're being a bit overly literal about the semantics. And besides, just because the OP is familiar with DR doesn't mean that they are obligated to follow every aspect of his plan.

 

[DisneyMandC]

Have you considered checking out You Need a Budget? It allows you to add categories for things you want to save for. That way you know how much you have allocated to each category without necessarily having to open a bunch of savings accounts. For example, I have a category for a new computer and for a new car. I know that while there may be an extra $200 in my checking account, that is allocated to the computer.

 

[barkley]

I already have the Dave Ramsey $1000 emergency fund set up

If you are following the Dave Ramsey plan, you should not be saving for a vacation or new car.

I was assuming they had no debt and were on step 3-- 3-6mos savings.

Even if they are on step 3, they still shouldn't be saving for a vacation or new car

the (baby step #1) $1000 dave ramsey emergency fund is supposed to be for an urgent emergent need-like to meet the deductible on an auto, homeowners/renters insurance issue, MINOR medical deductibles/copays, a car repair that IS NOT a bad return on the cost....

even if you've finished or skip baby step #2 (paying off all debt other than mortgage) there's step #3 that entails "building a FULL emergency fund" (3-6 months of expenses) that is NOT to be regarded as savings for anticipated/wanted items-it's for full blown emergencies (loss/lowering of income, non covered home damage like replacing an aging roof/heating system, major medical copay/deductibles....). it's only after this is fully funded that 'savings accounts' (with the intent of saving for a desired goal) are even a consideration (and while I don't think it's nescesarily a reasonable expectation with allot of people-this is only supposed to be done with whatever is remaining AFTER a full 15% of the household's GROSS income is being put into retirement investments).


to the o/p's question-we do an auto transfer each month from our checking account into 3 separate accounts we consider 'savings'-one 'long term' (full emergency fund PLUS-we hope to never need to touch), one 'reserve' (known/anticipated expenses over the next calendar year like property taxes, home/car insurance, heating fuel, normal car maintenance, normal pet care-regular checkups, shots, licensing, even budgeted amounts for Christmas, birthdays,....) which gets 1/12th of the anticipated yearly amount deposited each month, and 1 for 'short term/wants' (pretty much the amount we've got left over after 'reserve' mandates it's set amount and 'long term' is funded at a rate we're comfortable with). the short term/wants gets ideally used as we want to for vacations, non essential purchases, some essential but not pressing purchases, but priorities change so if a car repair/replacement came up it would take precedence over vacation, emergent medical need for our pets over car/vacation...


do what works best for you-when we first started out trying to organize our finances I tried different accounts for vacation, car replacement...but for me I always felt torn when i saw how much was sitting in vacation/how much i was throwing at it knowing the car issue was a looming concern (so it's all in one-priority given to whatever is most pressing).

 

[SharonZ]

Honestly, for the dog's surgery, I'd open up a CareCredit card which most vets accept. They offer interest fee payments over a 6, 12, or 18-month period.

 

[maxiesmom]

The dog issue is a need, the car will be a need and a very well funded emergency fund is a must. The vacation is a want and shouldn't even be considered until the other three are well taken care of.

I appreciate the advice, but there have been many things that have happened lately that have driven home the point that none of us are promised tomorrow. One of which was a co-worker who was waiting to retire to travel the world with her mom. Less than a year before she was set to retire, her mom was diagnosed with cancer and died. Heard a lot of "If onlys" before she did retire. I'm not going to put my life on hold until I am debt free. I won't add to any debt that I have, and I am also paying it down, but nope. Not going to stop enjoying life in the meantime.

 

[ozliz]

I wouldn't worry about what others say about the 'new' car. Whether you end up buying a new or new to you (used) car the reality is that now is a good time to start thinking about it. If your current car is 13 years old then having a few years to save for the next one will take the stress off significantly when it does finally die. Just because you reach the savings goal for the car doesn't mean you run out and buy right away. Like the 3-6 months of expenses savings accounts, saving for things before they are essential is a wonderful place to be in, especially if like me you live in a place where a car is pretty much essential.

 

[barkley]

I appreciate the advice, but there have been many things that have happened lately that have driven home the point that none of us are promised tomorrow. One of which was a co-worker who was waiting to retire to travel the world with her mom. Less than a year before she was set to retire, her mom was diagnosed with cancer and died. Heard a lot of "If onlys" before she did retire. I'm not going to put my life on hold until I am debt free. I won't add to any debt that I have, and I am also paying it down, but nope. Not going to stop enjoying life in the meantime.

I agree that you shouldn't put your life on hold-but I really encourage you to stick to paying off the existing debt and building a larger emergency fund asap even if that means forgoing some larger more costly enjoyments in favor of lower cost ones that speed up the debt repayment/savings building.

I say this b/c the enjoyment dh and i get out of our day to day life by virtue of not being in debt to anyone is unlike any other enjoyment we've ever experienced. I'm on the budget board allot b/c I enjoy learning new ways to cut costs/save but being in a position where it's something I do out of enjoyment vs. necessity/worry/concern is incredibly freeing and something I would hope everyone experiences at some point.

I totally understand the 'none of us are promised tomorrow' mindset but along the same line I also believe that none of us are promised the same life day to day, and if that life has an unexpected negative change it can be much less stressful/painful to deal with absent the added burden of trying to continue to meet financial obligations that were hard to meet in the best of times. dh and I could be poster children for this-both totally disabled (w/in about a 6 year time span of each other) in the prime of our careers w/2 young kids to provide for. we weren't debt free when it happened to me but thankfully we REALY tightened our belts and were when it unexpectedly happened to dh. did we miss the big vacations we took in years prior to my disability-HECK YES, do I regret not taking them-HECK NO, not when dh became ill and unlike during my illness we weren't having to call creditors to negotiate smaller payments, give us extra time....


good luck on your financial goals-there's lots of great advice on ramsey's site as well as others. pick what works best for you/your family.

 

[kathy884]

I keep a Net Worth spreadsheet and have all monies I have allocated for different goals. My spreadsheet lists assets/investments in once section and funds in another. Each asset/investment is allocated to one or more funds. I also have a savings budget of dollars from each paycheck that go to various goals including an extra fund for anything miscellaneous that comes up. When I have dollars that I can save left over when I get my next paycheck, I put extra monies where I want to.

Right now big goals I'm saving for are: (I have a consistent budgeted amount that goes to each, each paycheck)
--Retirement
--More college/get started money for DS
--My next car to purchase -- I just replaced my car and my son's car in 2014 and plan to replace these again in 2024 and have already started putting money aside for that (I do the cash thing rather than car loans)

Big savings goals already funded
--emergency fund
--next property tax/insurance payment fund

Smaller savings goals (I have a set budgeted amount that does to an excess fund and to vacation each paycheck. Often if I have extra left over, I will put that toward vacation too, meaning a slightly higher end vacation or perhaps an extra mini get-a-way. So I have my basic vacation funding that I always do and if there is extra in the budget I enjoy upping this a bit. I also have a budget for monthly charitable contributions.
--excess fund (I keep a little extra balance for higher than normal monthly expenses) // This goes up and down monthly, but is part of my budget.
--A trip to Colorado this summer -- already funded
--Adopt a family money for Christmas (more than my monthly charitable contribution budget - already funded)
--A trip to LA/Disneyland in January -- not funded but on track
--A trip to South Dakota summer of 2017 (not funded but on track)

Wish list but not funded with any monies at the moment (so far this year, I've added extras to my vacation budget rather than put monies toward either of these)
--backup camera (after market for my existing car)
--extra mortgage payments

Tracking everything for a bean counter personality like me actually give me permission to spend money on fun things as well as know I am on track for savings goals that are important to me. I update my little spreadsheet every paycheck.

 

[barkley]

I keep a Net Worth spreadsheet and have all monies I have allocated for different goals. My spreadsheet lists assets/investments in once section and funds in another. Each asset/investment is allocated to one or more funds. I also have a savings budget of dollars from each paycheck that go to various goals including an extra fund for anything miscellaneous that comes up. When I have dollars that I can save left over when I get my next paycheck, I put extra monies where I want to.

Right now big goals I'm saving for are: (I have a consistent budgeted amount that goes to each, each paycheck)
--Retirement
--More college/get started money for DS
--My next car to purchase -- I just replaced my car and my son's car in 2014 and plan to replace these again in 2024 and have already started putting money aside for that (I do the cash thing rather than car loans)

Big savings goals already funded
--emergency fund
--next property tax/insurance payment fund

Smaller savings goals (I have a set budgeted amount that does to an excess fund and to vacation each paycheck. Often if I have extra left over, I will put that toward vacation too, meaning a slightly higher end vacation or perhaps an extra mini get-a-way. So I have my basic vacation funding that I always do and if there is extra in the budget I enjoy upping this a bit. I also have a budget for monthly charitable contributions.
--excess fund (I keep a little extra balance for higher than normal monthly expenses) // This goes up and down monthly, but is part of my budget.
--A trip to Colorado this summer -- already funded
--Adopt a family money for Christmas (more than my monthly charitable contribution budget - already funded)
--A trip to LA/Disneyland in January -- not funded but on track
--A trip to South Dakota summer of 2017 (not funded but on track)

Wish list but not funded with any monies at the moment (so far this year, I've added extras to my vacation budget rather than put monies toward either of these)
--backup camera (after market for my existing car)
--extra mortgage payments

Tracking everything for a bean counter personality like me actually give me permission to spend money on fun things as well as know I am on track for savings goals that are important to me. I update my little spreadsheet every paycheck.

I love your thought process-and you are SO RIGHT, when you know you're on track for savings goals it IS much easier to give yourself permission to do some fun spending


since you list your property taxes and insurance as a savings goal I'm guessing you pay these separately from your mortgage? I found that when we started doing this I became much more aware of how much we were paying-particularly for homeowner's insurance. when I would get that notice of the yearly bill I would look through it to make sure I was getting EVERY discount I felt we were eligible to-and contacting my agent to inquire about additional discounts as I heard about them through various sources. btw-don't forget to hit up your auto insurance carrier when you get that backup camera to see if it doesn't qualify for a discount (I seem to remember when we bought our last car and were mulling different options this was one that took our rates down a bit so it helped offset the cost/ended up a cost savings long term).

when you choose to start putting more towards your mortgage let your bean counter flag fly and start playing around with the on-line amortization calculators. I found that using one on a regular basis provided me a huge push to throw any extra money we had at the end of the month (after covering everything else you've detailed above) at our mortgage. if we had a 'fixed expense' decrease (like insurance, an ongoing prescription discontinued (so no more co-pay for it each month) or what I paid each month on our utility balanced payment plan) I would immediately plug that amount into the calculator to see the impact it would have. cripes-something as little as an extra $30 a month thrown at principle can take months to years off the life of a mortgage! if we got a little boost to our income, I figured we weren't used to having it to spend so it got thrown into the mix. since ours was through my credit union and it was super easy to throw even a one time extra payment at it on-line it got to the point where if at the end of the month I had spent less than I had budgeted for groceries I would look to see what that one time amount would shave off time wise and then transfer it to the mortgage (we did this as well when on the rare occasion we spent less on a vacation than we had budgeted).


LOVE that your adopt a family is a budgeted part of your plan! a few years ago I set up an account that I consider my own form of a 'Christmas club'-instead of just budgeting what we are comfortable spending on Christmas gifts I crunched the numbers to include all of the holiday expenses I like to cover (gifts, stamps for holiday cards, thanksgiving AND Christmas increased/extra food costs, but more so for the different charitable efforts that seem to make a big push around that time of the year-adopt a family, coat drives, food pantry drives, the bake sales that the school choirs/bands do at their holiday concerts...). I like to help charitable groups on a regular basis but it's nice to be able to up it when there's an accelerated need.

 

[TwoMisfits]

I'm wondering how others go about saving for multiple large expenses at the same time. Right now I'm trying to save for:

Knee surgery on my dog
A new car
A Disney trip

In addition I already have the Dave Ramsey $1000 emergency fund set up. Now I'm trying to figure out what left over money to put where. I have over $1000 in another fund that I tell myself is my New Car Fund, but might have to end up being Dog Knee Repair start up fund. And then another $550 in a Disney Trip savings account.

So tell me, how do you decide where to put what money, when you are trying to save for multiple things?

For me, I'd start saving for the new car...and I'd start saving for a "bare bones" Disney or drivable vacation...and I'd look at alleviating the dog's condition (if possible) and not save for that yet. Life is for living and my parents never regretted having a single vacation per year with their kids (1 week at the NJ shore was the usual, with a bigger, slightly more costly vacation every 3rd year when extra savings built up, at an offsite condo in Disney - NJ beach was drivable, ate most meals in the small condo or fast food, enjoyed beach and discount all-you-can-ride passes through my dad's work - biggest splurge was nightly custard cones - so very barebones for 2 out of 3 years, but very fun). My dad died at 53 before he would have gotten the joy of extra income from kids all being through college and on their own and having zero debt. The memories we made are priceless, and the tightness of the family probably is aided in large part to these really happy, close memories...

But note, I do say "bare bones." When you are dealing with debt and low savings, it's not the time to travel like Bill Gates.

 

[barkley]

biggest splurge was nightly custard cones - so very barebones for 2 out of 3 years, but very fun). My dad died at 53 before he would have gotten the joy of extra income from kids all being through college and on their own and having zero debt. The memories we made are priceless, and the tightness of the family probably is aided in large part to these really happy, close memories...

I lost my dad when I was 19-and it's the memories of the little things that have really stayed with me.

your vacations sound identical to ours-we went to a beachside place in California with all you can ride passes. stayed in an inexpensive place-ideally one with a small kitchen so mom could bring most of our meals, if not then there was sure to be a cooler in our motel room w/drinks, fruit and milk so we could do cereal for breakfast (and a box with chips, cookies and such).

you remember the nightly splurge on custard cones-for me it was the nightly corn dog. I've had many corndogs in my life but I swear that the memories of the ones I had on those barebones vacations cannot compare (and with few exceptions I probably could not name a single food item we enjoyed on our fairly infrequent trips to Disneyland).


thank you for sharing this-it brought back some great times.

 

[yaddakal]

I'm a hospice nurse. In my opinion a vacation is a need. No worries! We have the carecredit card it actually works for humans and animals and 0 percent interest if you pay it off in time. ( my acl last year and my dog)
You can always make money. You can't always make memories. Just a flip side opinion. We have emergency, and we have disneys vac deducted automatically too. We have a spreadsheet where I can see the whole
Picture. We won't be financially free ( besides house) for two more years, but vacation is the only time we all connect and relax in that way so for is its happening.

 

[Kiersten]

I am fortunate enough to not have to pay rent yet (my parents are wonderful people) but I am paying a student loan and for a car. Once I set aside money for those payments, I keep a little for fun money and the rest goes into my credit union's vacation club account I set up. I try to put $50-$100 a paycheck into the account.

 

[barkley]

a vacation is a need. No worries

We have the carecredit card it actually works for humans and animals and 0 percent interest if you pay it off in time. ( my acl last year and my dog)

You can always make money

respectfully-

'needs' are shelter, food/water and clothing. ideally there are additionally-sanitation, education and healthcare.

I can say after multiple decades of professional health, education and social services work and administration that I have NEVER encountered nor heard of a single circumstance wherein an individual or family was found to be 'in need' by virtue of lacking a vacation; likewise, any person(s) responsible for a child/disabled individual/the elderly even REMOTELY considered by protective services to not be providing 'needs' due to the absence of vacations.


a person can ALWAYS make money? really???? tell me how I could have when I had multiple strokes, was aphasic, had partial paralysis/blindness/loss of hearing. how about when my dh was having repetitive uncontrolled seizures due to his TBI?

absent a disability-my friends and neighbors who lost their jobs due to the economy and outsourcing. applications everywhere-no jobs. fast food and other minimum wage jobs wouldn't hire- 'over qualified'. many said 'take a job, ANY job-do yard work, work for neighbors...."-when there are no jobs and your neighbors are in the same boat-there is no 'any job'.


lastly-before anyone jumps on board with any credit card-RESEARCH IT. with the 'carecredit card' I did a simple google search. interesting reading on the $34.1 million in settlements they were ordered by the feds (after a 4 year intense investigation) to pay out to consumers just over 2 years ago on deceptive enrollment practices. yeah-it's great if you're able to pay off your entire balance in time-but if not they should follow the law and tell consumers it's actauly a deferred interest card that racks up almost 27% interest retroactively.

 

[Nayan]

Agree with Barkley 100%. Vacations, no matter how you try to justify them, are a luxury not a need.

A very good real-life justification to have a large emergency fund happened to me yesterday. Driving back from the grocery store, my car started stuttering to the point I thought we wouldn't make it home. After some internet searching an a couple trips by a generous friend to the parts store it's running again, but it cost me close to $900, which I put on my CC and I will go to the bank and pay it off Monday.

Some people would cry if they had to pay out that much at once, but having the emergency fund makes a huge difference.

 

[Kiersten]

Agree with Barkley 100%. Vacations, no matter how you try to justify them, are a luxury not a need.

A very good real-life justification to have a large emergency fund happened to me yesterday. Driving back from the grocery store, my car started stuttering to the point I thought we wouldn't make it home. After some internet searching an a couple trips by a generous friend to the parts store it's running again, but it cost me close to $900, which I put on my CC and I will go to the bank and pay it off Monday.

Some people would cry if they had to pay out that much at once, but having the emergency fund makes a huge difference.

I know how that feels. Just had to dole out $1200 for a new transmission on my car. It would have cost me more to buy a car than to replace it though.

 

[crisi]

You won't be doing them all at the same time, so prioritize them. It sounds like you believe the dog's knees are most important (but I'd make sure to evaluate other options), then the car, then the trip - so save for them it that order, knocking each one off your list. If the dog is in pain for a year because you keep simultanously saving for the vacation, you might as well not fix his knees at all and just recognize that the vacation actually is a bigger priority.

Just like you snowball debt, snowball through the list of things you need to spend money on and get them knocked off the list.

 

[Colleen27]

Honestly, I just don't think of it that way. I stick to our budget, save what is leftover, and allocate it as necessary. I'm not a particularly organized person so I don't like messing with different accounts for different purposes unless there's a tangible advantage (ie tax advantaged retirement and college savings). For me, it is easier just to know that the balance in the savings account is $XX and prioritizing our big-ticket spending based on that number. Sometimes it means a vet expense demands a trip be postponed, and right now it means a "rebuilding phase" because we ended up replacing my van 6 months sooner than we expected and want to increase our cushion to compensate, but I just find keeping the short-term savings all in one "pot" to be more manageable and more rewarding than having a bunch of accounts for a bunch of goals and slowing progress on all of them by dividing our efforts. Kind of the same psychology as Dave Ramsey's snowball method - getting the quick "win" is more of an incentive than making slow progress on every goal.

But I'm also slowly loosening my grip on my no-debt thinking so I might not be the best person to ask if you're a DR fan. I have my first car loan of my entire life right now, even though we had the cash in the bank to pay cash for an acceptable vehicle (though not as nice as the late-model used van I bought), because we'd like to take out a home equity loan for some major home improvements and our cash-only years have made it so that we need to do some credit-building before that can happen.

 

[chris31997]

I'm wondering how others go about saving for multiple large expenses at the same time. Right now I'm trying to save for:

Knee surgery on my dog
A new car
A Disney trip

In addition I already have the Dave Ramsey $1000 emergency fund set up. Now I'm trying to figure out what left over money to put where. I have over $1000 in another fund that I tell myself is my New Car Fund, but might have to end up being Dog Knee Repair start up fund. And then another $550 in a Disney Trip savings account.

So tell me, how do you decide where to put what money, when you are trying to save for multiple things?

We list our savings goals by priority. Then throw all extra cash towards that until target number hit.

So for you it might be
Dog: need money in 2months about $2000
Car: need in about 1yr about $3000 plus what current car is worth
Disney: want in about 2yr about$5000

If you concentrate all money at one goal, then the next, You will hit the goals faster.

 

[dreamin_disney]

There is 2 month a year that I don't work so I have my job deduct from my paycheck and out it into credit union acct automatically each month.

vacation- we save all of our change, rewards $$ from credit cards rewards- Sam's club sends me a rewards check every March I recently got a $144 (I earned it in a year) I also have 2 other credit cards cash rewards all that is just for vacation fund. I payoff my card every month. Last two years we've gone on budget vacation with other family members timeshare so no hotel. Food we had giftcards from bdays and xmas. Last year we went to a hotel/casino 4 nights less than $100 for 3 of us. plus we got 2 free dinner tickets, 2 breakfast buffet tickets we used our gift cards for food. We don't gamble

Medical stuff- daughters glass/contact, RX's , over the counter meds or Medical/dental stuff I have a FSA so I have my job deduct before taxes $160 a month= $1600 for the year

in the past if we had a big home improvement or needed big appliance we did home depot, Lowes or Best buy 0% financing for 18-24 months just made sure to pay it off