True expense funding limits
Hi everyone! I'm asking for your input on how much to save for each true expense. It seem that as soon as we have some money saved in there, it gets spent.
A couple of mine are:
I try to put money in each to save up for future spending, but it seems as though it's 'now' spending and I have to save it up again.
How do you all keep money in these categories? How much is enough? When do you shift from saving in these categories to then putting that money to pay down debt?
I also found that I was spending the money in my everything vehicle and everything home categories, so I split them up. I now have more categories, and a whole group that I call No Pilfering. In that group I have categories for Home Emergencies, Car Emergencies, Next Car, Appliances, and that sort of thing. Those aren't the categories I use for buying light bulbs or oil changes, etc. For me, it wasn't about how much to put in those categories, but I needed extra clarity around what the categories were for.
I like this question and have given it some thought in my budget. It’s a big question, one I’ve wrestled with through the years. Initially I just funded my best (wild) guess about these true expenses categories. Over time I got my clarity about what I needed, in part by doing what Marissa suggested and breaking them into more granular categories. Our dishwasher went out and we didn’t have funds to replace it. I thought — ah ha! We need a “Major Appliances” category. We funded it eventually up for $2k, and naturally since we have it we haven’t had to use it. We started a New Roof category for the inevitable within 5-7 years, a Fencing category for the fence we want to build, a Furnishings, Home Improvement, Flooring, and Hot Water Heater category. All of those (and a few others) were split off over time from the main Home Repairs category, like so many little feudal lords rising after the fall of the Roman Empire. The Empire was way too big and ungainly for us to make sense of. But a hot water heater? We know how much that costs. A fridge, got it. A roof, new furniture, new furnace… you get the idea. Multiply that approach out with Transportation, Personal funds (clothing, etc), Business, Giving, Celebrations, and you have our major True Expense categories. (As you can tell, we favor granularity and the huge number of categories it creates for us over a less tentacled but also less insight-producing budget approach).