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Money Management System and Savings Plans

November 13, 2014

I’ve decided that we need 5 savings accounts.

  1. Emergency Fund – don’t touch, almost ever.
  2. Planned Spending / Bills: This is basically my personal escrow account for property taxes, insurance, and also income taxes for 2015. Hopefully the need to have income taxes in there will drop out.
  3. Home Maintenance fund: I’ll contribute 1% of our house value per a year to start. I am hoping this will cover major things like new roofs, but not decorating and optional remodels. We’ll evaluate as we go.
  4. Short Term Savings: This is basically a slush fund to smooth out irregular spending, like home decor, travel, etc. This is the number we’ll look at when we are wondering “can we afford it?”.
  5. Targeted Savings: This account will only be crated and used as specific major needs arise. I’m assuming it will usually be one thing at a time. For example, once we do decide we want a new car or a bathroom remodel, this will be the place to do it. It doesn’t necessarily have to have a purpose, but it is for mid or longer term savings goals.

These accounts could be virtual (i.e. just in a spreadsheet) and live in one physical account, but I do have actual seperate accounts for each (under one login on Capital One 360). It makes me happier that way.  I basically have this setup right now, with the exception of #5.  It is the missing link to my puzzle! I also have one of these set up with check writing, so we can pay for large bills as needed.  They are all linked together with easy online transfers.

Day-to-day Management

I downloaded Yodlee’s (rather crappy) phone app and am actually using it to view our spending in key categories.  Mint is likely a better solution here due to the better user interface, but I’m not motivated enough to make the transition.

I’m back to just zeroing out my credit cards on a regular basis, either when I get paid or when the balance is annoying me. I’ll attempt to update our spending and net worth monthly.  This will be easy if I occasionally log into Yodlee and fix the categorizations in advance when needed.  But in general, it is a pretty easy process.

I set up almost all of our bills with auto-pay.  My paycheck goes straight to short term savings, T’s goes straight to the mortgage (the remainder in checking). I pay the credit card from my short term savings. I also finally set myself up with a library card and already downloaded a fresh e-book.  Yay!

2015 Financial Goals did figure out what I want to do in 2015 as far as savings go:

  • 15% minimum to pre-tax savings accounts
  • 25k mortgage prepayment
  • Add 8k to emergency fund
  • Ad 10k to targeted savings for tbd / undisclosed purpose
  • End year with property tax funded for following spring
  • contribute 1% of house value to maintenance fund
  • Double my monthly student loan payment
  • Consider getting a dog.  Maybe this is an anti-personal finance goal?

It kind of blows my mind that I think we’ll really be able to do all of that, without even considering raises and bonuses.  Although it assumes some consulting income for T that may or may not materialize (he has an optional contract, but may not have the time).  It does make me want to push more to pre-tax retirement, but we can always adjust that later in the year.  Cash maybe isn’t the best investment, but it certainly isn’t a BAD thing to have.

I have one long term goal defined, which is to reduce the balance of our mortgage to 20% of its original value by August 2019 (5 years).  Maybe we’ll knock that out of the park, maybe we won’t, but i think it is an achievable goal.

I probably should come up with some retirement account balance goals, but I just feel like we are really on track there.   Maybe a net worth goal would be inspiring too.  We’re definitely on track for $1M in some time frame, but… not a close enough time frame that I feel comfortable putting a goal out there.

It feels good to have a plan.  We have been winging it, but I’m finally feeling comfortable with where we are at and where we need to be.

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5 Comments leave one →
  1. November 13, 2014 8:06 pm

    Plans are excellent in helping keep one on track, I do the same! Best of luck!

  2. November 13, 2014 10:04 pm

    Yay for plans! I finally realized I can’t really make any firm ones for 2015 until I start my new job :/ I want to get a dog too! It probably won’t happen until 2016 or 2017 I think at least.

    • November 13, 2014 10:46 pm

      Yeah, our job situations aren’t well set up for a dog right now anyway – we are often gone for >12 hrs in a day :/ It probably won’t happen, but maybe.

      Yay for the new job! I mean, it sounds like you have some pretty cool plans coming up (boy moving in!), even if you can’t yet attach firm dollar amounts to it!

      • November 13, 2014 11:23 pm

        Very true, I just really like planning and making spreadsheets and it’s driving me nuts that I can’t be very specific with them! But yes boy moving in is very exciting! 🙂

      • November 14, 2014 12:10 am

        Oh! I finally told my boyfriend about my blog and now he’s reading from the beginning. He seemed sort of surprised, sort of not? And not against it at all. Now to get his permission to blog about joint stuff! 😀

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