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Suggestions? Improvements?

We don't have specific percentages that we break down our budget. Instead, we funnel all of our money into our checking account.

When the checking account is above $2k (subtracting expenses using the forecast chart in Quicken), we transfer the extra into a tax free money market account.

When the MM account is above a certain amount, we transfer any extra into two federal tax free municipal bond funds (vwahx & vmltx earn between 3-5%).

When the muni account is above a certain amount, we transfer the extra into an index fund (vtsmx).

So, instead of having several buckets and putting a few glasses of water in each bucket, we put everything in the first bucket and let it overflow into the next bucket then the next bucket and so on down the line. Currently, any extra cash goes into the index fund since all of our buckets are full :)

If we need money for a car or other big purchase, we'll increase the amount in the MM account prior to the purchase or pull from the muni account.

In your situation, the tax free funds probably wouldn't be the best option.

A couple reasons I like this method over your proposed method:

-You have to adjust the percentages as you reach certain goals (efund level at goal, for example).

-You should probably build up your efund prior to putting money into long term investments.

Perhaps a downside to my approach is the temptation to spend any extra amount in your checking account. To this, I would say the key to FIRE is replace that temptation with the satisfaction of putting money away. A spreadsheet to track your progress towards FIRE can help with this.

Bottom line, I won't say my or your approach is better, just that I prefer my approach. Both approaches should help reach the same goal.

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