We're still going strong on our envelope system and LOVE knowing what we spend where. And we've structured our lives so that we can fully live on just one salary and save the other.
So, with the savings that we've uncovered, we decided that we needed to allot our savings to certain things.
1. Our first priority (since we have an emergency fund covered) was my retirement, which I've neglected since losing my company match when the layoffs happened last Fall. So with every paycheck, we automatically transfer money so that B and I can take care of ourselves in our old age. That's a burden we don't want to put on future McKiddles.
2. Then, we started thinking about shorter term expenses coming up. Like replacing my beloved Bug for a more family friendly car down the road. I love that little red car, and I've always said that I will drive it until it won't drive anymore or I need room for a carseat. The first scenario is looking like a likely drive to purchase in the next year.
So, instead of planning to take a big chunk out of our savings when it's time to buy a new car, we're allotting a portion of each paycheck to a savings account specifically for car replacement - without a car payment.
3. The next house. We love our house. If it had one more bedroom and a bigger yard, I could see us here for a very long time. But we figure that in about 5 years, we'll be wanting more room. So that's a big short-term savings priority.
4. The edumacations of those future McKiddles. Rumor has it those things are pricey.
We love watching all of our savings accounts grow. I can afford to retire for about 5 minutes and I'm getting close to being able to replace the Bug with a Vespa and sidecar for Casco. He'll need to use his own savings account to buy his Doggles. Our future looks exhilarating.
I'm obviously not a pink person. Yellow or lime green for me and Scito, please.
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Great post, I love watching our savings grow as well. And I do think it's a good idea to have different savings account for different things you need. Very smart!=)
ReplyDeleteit's so refreshing to see another young couple that's actually saving and not spending like crazy with no regard for the future. and besides, i'm sure casco would really love that sidecar...
ReplyDeleteI am with Claire- it is nice to know see someone else who is not blown away at the idea of buying a car outright. (When our car died last year- we did) If Chris could have his way- he would try to buy a house outright too! But I have been trying to tell him that that is not the best move. Oh well.
ReplyDeleteHow do you budget these categories? Are they actually in different categories/accounts? Or is the money in envelopes at your house?
I agree with the above - it's refreshing to see people buying vehicles outright. Since hubby and I started dating 5 years ago, between the two of us we've purchased a total of 4 vehicles and have bought them all outright.
ReplyDeleteYou are so wise with your budgeting - I really could use a lesson or two from you!
I love this stuff. We are trying to budget for a lot of the same things. It's exhausting but I really enjoy it in some strange way. And I love reading about how other people do it.
ReplyDeleteAlso, I love the term "McKiddles."
Taryn - for these big savings things we have separate accounts (all linked together). We only keep cash around for the monthly spending and the smaller "savings" that we factor into monthly spending - like Casco's "savings account" which only gets about $20 a month after we buy his ridiculously expensive food.
ReplyDeleteI think having goals is such a huge help with budgeting and financial progress. It really helps us stay on track.
ReplyDeleteAnd I hear you about planning for your retirement, so it doesn't fall on your kids. We're a little nervous about the fact that NEITHER of our parents have anything saved for retirement. And I don't mean not enough to live on, I mean nothing. Sigh.
Those are great goals! We have a budget as well and it definitely gives us more freedom!
ReplyDeleteOnce again, I'm totally impressed by your motivation and willpower. I am such a spender ($175 at the Gap today is proof positive, woops!) but luckily the hub is the finance guy and keeps me in check. Hey, at least I'm not putting it on credit is my validation :)
ReplyDeleteDoggles... lol.
ReplyDeleteWow you are good! I wish I was that on top of things. C. would look super cute in a sidecar.
ReplyDelete