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Author: Hyperborea Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 726526  
Subject: Re: Just starting to save Date: 5/21/2004 11:55 AM
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1) My car will probably just sit during the week, so I can easily get 10 years out of it.

2) Now we don't have to dedicate any of the extra $800 to her car.


If you can walk to work and it will sit idle then why do you need a second car? Is there any way that you can use only one?

4) We want to be able to take advantage of savings on purchases when you pay up front. I saved a huge amount on car insurance two days ago by paying the entire six month premium (for both of us), instead of paying month to month.

5) We both have family that are out of state, and would like to visit at least each once a year. We have to fly to get there, so we're going to dedicate some of the $800 to a travel fund (on paper).


Yeah, this is a very good idea. Some people call this a "freedom fund". What I've done is set up a number of accounts at ING to handle irregular expenses - house costs (insurance/taxes); car costs (insurance/repairs); vacation (XMas trips to my or my wife's family and real vacations); etc. Doing this will leave you with none of the usual scrambling that people do when the bills come in. Much more relaxed way to operate. However, does this have to come from your $800 savngs? Why? If your budget already included these budget items then you are just arranging to pay for them earlier. You might need some of the $800 for a few months to get them started but why forever?

6) The rest will be split between a down payment, our emergency fund and some a DRIP fund. The DRIP fund will stay small for now - probably about $100 a month.

If you are not maxing out your 401k accounts then as long as yours have no funky fees or extremely bad funds then this would be a better place for your money over the long run.

Hyperborea
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