Our Savings - Short and Long Term Fundsby Michelle Vandepas | More from this Blogger 18 Dec 2006 10:28 AM
Now, as part of our family money makeover, a little bit of our monthly income goes into a savings account, detailed on paper, broken up into different categories. Our account includes having a short term emergency fund, a longer term fund and a savings account for budgeted items. We want the long term emergency fund to grow until it reaches six months worth of expenses for our family. We won't touch it unless we really have an emergency - out of work, illness, hurricanes, floods, war or famine - any other unexpected disasters that usually hit every family at some time or another during a lifetime. The purpose of this fund is to give us peace of mind. We'll have enough for any emergency (more or less) so we won't lose our home. This cash stays liquid, so we can tap into it pretty quickly. If needed, we can gain access to the money in just a few days. Do we have this now? Yes, but there is only about $200.00 in it so far. But that is $200.00 more than we had in a fund like this a few short months ago. We are working towards building this fund a little bit each month. The short term emergency fund is also growing. We keep this in a typical bank savings account which we can access the same day if we need to. The account is building to $5,000.00 although we started at $1,000.00 - a typical amount. Hubby and I spent several days agreeing what items are acceptable to purchase from our short term emergency fund. Car repairs. Yes, - we both agreed. Refrigerator, stove, or other major appliances that need repairing or replacing? Yes we agree. What about our Television? Ah.... No said Hubby. Really? Are you going to miss The Amazing Race or that guy that likes to be stranded in weird places, show? What about the Tour de France this year? Faced with the prospect of having to play games, read, or talk with me every night, TV went on the OK list. If need be, it'll come out of our emergency fund. As you can tell, it's important to pre-decide what you are going to use these funds for.... Better to have the discussions before you are in ultra stress mode when the DVD player, Fridge or TV, blows up. What if Hubby needs new tires, but instead of replacing the tires with the same type, he wants ultra fast, high speed racing tires that cost a lot more than his old tires? If you've already talked this out it'll save the arguing and the dagger stares later. Believe me. Talk it out now, or argue later. Your choice. WE chose to talk it out. So far, the TV is holding out. And so are his tires and our brand new fridge. It's nice having an emergency fund for ...well.. just emergencies. ~~ Stay tuned for how we save for Birthdays, Vacations and luxury items! Other Interesting Reading: Learn more about Michelle Vandepas  In a previous life, Michelle was president of a medical manufacturing company, and then in private practice as a holistic business consultant. Relevantmoney tags User Comments Grandad (105) 20 Dec 2006 10:23 AMAll very sane, but oh so boring!  Michelle Vandepas (579) 20 Dec 2006 10:28 AMBoring.... The writing? The Topic? A new TV? Oh please keep reading anyway! Misshalftogether (5) 24 May 2007 12:06 PMDo you know of any local(St. Louis, MO) money clubs/support groups?? Kind of the same as blogging, only the old fashioned way, in person?? Always good to "hang-out" with those who have come from where you are and are on the same path to get to where we all want to be financially. Thanks Community Tags Emergency Fund, money, savings, savings account, spending Discuss this article
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Hubby and I used to have a savings account many years ago but like many families, tapped into it and never refunded it. Those days are gone.
