Savings . . . how you divide it?

[Deleted]

So many times posters on here say, "That isn't an emergency. That is something you should have expected to have to pay for." That is usually referring to a new roof, new heating system, maybe a replacement car . . . anyway, you get the idea.

A new roof for me was $7000. A new heating/ac system, we are figuring, is $10,000. I don't know about a replacement car. But there are tons of other stuff that is non-emergency that we should be saving for . . . new tires, the deductible on the house (over $2000), etc.

Do you just save as much as you can, or do you have two separate funds. I will give them arbitrary names. One is "Expected" and one is "Life."

I've gone with two accounts by default. I put DH's (relatively new DH . . .and he is 68 and I am 58 and already owned the home) into a "house" account. It handles house maintenance. The rest of my savings (besides retirement savings . . . an entirely different issue) goes into "personal" savings. I guess that is what is supposed to protect me if I lost my job or something. The house account ($10,000) has a lot more than my personal account does ($8000). By the way, my job is fairly secure since I have tenure, taught there for 13 years, and actually do a good job according to my evaluations.

So how do you guys handle this? One huge pot? I hear some of you guys talking about $ 50,000 or more in "liquid" savings. What does that actually mean? And do most of you have that much?

[Deleted]

I have a few that I track in a spreadsheet. One is for property taxes and insurance (incl. car insurance); another is for house repair; another is charity and another is travel.

Unfortunately, we're having a hard time with house stuff this year. The A/C died and the repair fund was far short of the amount we needed and the other little things keep happening, too (pulling out and resealing leaky toilet: $325). I borrowed $2,500 from our HELOC for that.

We do have over $50K in money market funds between my checking account and our investment accounts, but I don't touch the investment accounts except to add to them.

[swamp]

We keep about $20 tp $30k in a savings account and use it as needed. Taxes, repairs, school tuition, car down payments all come out of it. We also have a brokerage account we can tap as necessary.

[midjd]

I don't really divide our non-retirement savings, just try to save a minimum every month for expected but irregular expenses (heating fuel, brakes/tires/oil changes, car insurance/registration, bar association dues, clothes, etc.) About $350/month usually covers it. Every 3 months DH gets an extra paycheck and every 6 months I get one, so we usually sock away another $500-$1000, which helps us cash-flow most unexpected expenses.

For new car/HVAC/tree on the roof issues, we have a taxable investment account that is a backup EF. For a super emergency, we could withdraw the taxable account plus our Roth contributions (about $50K total), but that would be pretty dire - 2+ year job loss for both of us, major medical emergency requiring home care, etc.

[giramomma]

I've gone overboard with separate accounts for separate things. Part of that stems from the fact that I had a poor relationship with money.

So, we have an EF that's really for job loss only. We also have joint savings for short-medium term savings needs: furniture, air conditioner replacement, splurge opportunities for our kids that I can't cash flow, day trips that I can't cash flow, possible medical copays, etc.

DH and I also have our own personal accounts. My account is ear marked for a few things, but I don't know if DH has a purpose for his.

We also have a vacation account and an account to supplement our income when I go on maternity leave (I bring in 80% of the household income and generally have to take one month unpaid). The ML account will eventually be closed. Cars come out of whatever accounts we agree upon at the time.

We also have a taxable savings account, but that's really meant for retirement.

We have 40K or so in liquid savings (excluding the taxable account) if one adds up all the accounts. I know it's probably a huge no-no to have so much money in savings, but it makes me feel secure.

[InsertCoolName]

Bah. I was gonna do the YM thing and have an account for every.single.thing.that.could.happen. BUT. Then I realize that I do not live my life on what ifs. So I will throw what I can into A savings account. The beauty in being poor by YM rules, is that finding another job isn't THAT hard. And we found out the hard way a few years ago that we CAN survive on 18k per year. Yeah, I know. Hot dogs and water are the nastiest things ever. And it will be a long time before we eat hot dogs.

So 1 account for everything. I promise the sky really doesn't fall with only one. ;D

[Peace Of Mind]

We have one big pot. Hopefully not all things will happen at once. So far none have happened and we just keep adding to it. I don't like the hassle of so many accounts so I just found a decent MMA and keep it in there. As the amount gets higher (due to an inheritance) we need to find better places to put some of it.

[resolution]

We just have everything in one account. The complicated systems and spreadsheets that everyone uses seem too labor intensive for me. We have a set amount that we invest each month and the rest goes into savings to be spent as needed.

[Gardening Grandma]

I do something similar to Athena. Some expenses are predictable, just not monthly. Property taxes, ins, our water and propane bills. I have accounts specifically for those.

In addition, we have expenses that are not predictable (neither the amount or when). I have accounts for emergency vet expenses, house maintenance, vehicle maintenance, and oop healthcare. I keep about $5K in total for those. Then we save for trips (or starting next month - a replacement vehicle).

I know it may sound a bit anal, but I like the system and being retired, it's important to me not to have to make unplanned withdrawals from the retirement accounts. We absolutely must live on our retirement income. There are no bonuses, no OT, no windfalls and no job.

[dancinmama]

We've never sliced and diced our savings into different categories. We've always just had one EF. It has been used to buy anything pricey (cars, home improvement like a roof or windows, vacations, etc.) or pay a bill (usually property taxes) that we could not pay from monthly cash flow. We've never used it to "pay off" daily overspending (such as running up a credit card in any particular month).

[8 Bit WWBG]

...:::"Do you just save as much as you can, or do you have two separate funds. I will give them arbitrary names. One is "Expected" and one is "Life."":::...

The key is starting out whatever you do with the savings already in place. IMO, there are two classes of people who have not had an issue. The most obvious are the ones who did the saving up front (ex. didn't buy a house or car without the prerequisite amount of savings already saved). The others are the ones who were lucky enough not to have an emergency until the funding was there.

Some people love having an account for everything. Others just have one pot and divide it on a spreadsheet. We just kind of toss money into savings and it'll be for whatever we need it for. I don't want the stress of trying to remember whether that $500 deposit was supposed go to the pet fund, the house fund, the car fund, or the honeymoon fund.

Plus, "house accounts" could have dozens of sub-accounts. "New kitchen fund" "new floors fund" "new windows fund". Even if you just had "maintenance" and "upgrade".... or do you need "routine maintenance (ex. gutter cleanings)" "irregular maintenance" (ex. roofing) and "upgrades" (anything from new appliances to an addition...).

Perhaps when we have enough saved, we'll worry about naming it.

[Peace77]

We keep our savings in one account. We expect to use it for job loss, car and home repairs, etc.

It amazes me how people are shocked by expenses such as car and home repairs, moderate medical and dental bills, and gift giving occasions such as Christmas and Easter.

[kittensaver]

We have two accounts: one for putting money away for "known" regular and irregular expenses like property taxes, insurance, 2-3 thousand each year for house repairs, another 1-2 thousand being saved up for the next car (when it's needed, hopefully not soon!), medical copays and expenses (humans and fur critters), car maintenance, gifts and travel. The other one is the EF we don't touch unless it's a true emergency. We laughingly call it our "Shit Happens Fund."

[Deleted]

We just have one savings account and everything gets dumped in there.

[happyhoix]

Neither Dh and I are good with spreadsheets, etc. Well, we're good with them, we just hate doing them.

So a certain amount gets deducted from our paychecks for retirement. When DS was in middle school, I started a 529 that was also automatically deducted from my checks. Every month, a chunk of money from our checking account gets moved into savings. When the savings account gets too big (>20,000) we move some into a more long term savings vehicle.

Not very well planned or thought out, I know we could be doing a better job with it, but neither one of us can stand to do the picky work required to establish a more formal budget.

[cronewitch]

I don't save anything for emergencies but have a 50K HELOC I could borrow up to 38K more on if I needed to. I use it for things like home repairs and cash flow smaller expenses like new appliances and medical bills.

When I was young I had to save up for the rent putting away 1/4 per week and save for car insurance. Now is much nicer just living without worry about when payday is to do things like buy groceries.

[Miss Tequila]

I keep a set amount in a savings account. The rest gets invested. My husband doesn't keep a savings account because he pays down his home equity LOC each month (he doesn't have a mortgage) so that is in essence his emergency fund.

[Anne_in_VA]

DH and I don't pool our money, but I do know that we each have EF savings outside of our checking accounts. I have about 5K in mine but I don't know what he has in his. Mine is used as regular savings for irregular expenses, and so is his.

I rarely tap my EF and put a set amount in it each payday, so it's growing (just not fast enough for me since I'll probably retire in the next year or so). I recently started a new treatment for my eyes, and the medicine is extremely expensive. I'll have to pay a portion of the cost of it although I don't know how much yet as I'm still waiting for the first EOB to find out. Once I know, I'll probably use some of the excess from checking or tap the EF. We'll see.

ETA - we both also have retirement savings which is never touched for anything.

[sbcalimom]

I have our main EF and a short-term EF and then a whole lotta sub accounts at ING. I like doing it that way because it makes it easier for me to keep track of how much we're saving/spending on things. I did however get really sick of all the tracking so this year I streamlined and only track totals based on whether it goes in the short-term category or the long-term category. This seems to be a decent happy medium for me that works. Maybe when we're more settled and don't have to keep such a tight rein on our spending, I'll be able to just use one pot but until then, I like my system.