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No. of Recommendations: 1
I have been using this method for about 3 years and it has made all the difference in the world for me.
I have budgeted for adding to an emergency fund each month up to having $1500 total. That should cover surprises that suddenly happen around the house.
I also have another budget for 3-6 months of living expenses. That would be bare bones for what it would cost me to get by. Not for eating out, entertainment, extra clothes and more. Just covering the "needs".
I have an extra savings account that I put $400/month in. That is for homeowner's insurance, car insurance and property tax. That way I always have the money on hand when the bills come due.

It has been interesting because each month I tweak it a bit as my expenses change in the categories. It actually gives me peace of mind to know what I am dealing with and not caught off-guard.

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