That short term savings dilemna. ( 3-6 months saving)

[btthegreat]

I don't know why most people who have trouble keeping that 'emergency savings' account full, don't try this. I used to see that emergency savings as a car fund, a vacation fund, a 'if you really really want it bad fund'

1. I just never buy anything on credit except my home and major unanticipated medical bills so there is no credit card debt.
2. I use my traditional savings as my 'emergency/ Car fund' There has to be enough to buy a cheap used car, or to repair one. We are looking at $ 8-10,000
3, I am always a month or two ahead on all my bills so that my electric bill, trash bill, water bill and my mortgage all have twice as much money as they require to cover the last bill. They each become specialized 'emergency savings accounts' that I can't reach into. The electric bill fluxuates dramatically between seasons. I look at my last month's statement. If I see I owe 300 dollars, I make sure I have 620 dollars credit balance so that if something happens there is always enough to pay two months of billing. I do this with all my bills. If I forget to pay, its already there. If i end up in the Hospital, its already there. If I lose my job, its already there, x 2. In essence there is no bills to pay for two- 3 months and my car fund can take care of the next one and my cash needs.
4, My tax refund is for those large ticket appliance needs. I take that damn refund and buy a big 'thing' we all seem to need to buy at the worst possible time and buy it the day after the refund hits my account.

Is this smart or stupid?

 

[Bok Tuklo]

I put pretty much everything on a credit card and get points. I pay the statement amount every month. No interest ever charged. I get a lot of free stuff on Amazon.

Hey. Their rules. They are gambling I will not pay off the statement amount. And I’m gambling that I will.

 

[mike2810]

For some reason the quote feature is not working for me today. OP is bolded by me.

"1. I just never buy anything on credit except my home and major unanticipated medical bills so there is no credit card debt."
I use my one credit card for most purchases. I just pay off the balance each billing cycle. No interest, No credit card debt.

"2. I use my traditional savings as my 'emergency/ Car fund' There has to be enough to buy a cheap used car, or to repair one. We are looking at $ 8-10,000"
I have paid cash for new cars for decades. I pay myself a car payment into a high yield savings. Maintenance cost is saved in a different savings account.

"3, I am always a month or two ahead on all my bills so that my electric bill, trash bill, water bill and my mortgage all have twice as much money as they require to cover the last bill. They each become specialized 'emergency savings accounts' that I can't reach into. The electric bill fluxuates dramatically between seasons. I look at my last month's statement. If I see I owe 300 dollars, I make sure I have 620 dollars credit balance so that if something happens there is always enough to pay two months of billing. I do this with all my bills. If I forget to pay, its already there. If i end up in the Hospital, its already there. If I lose my job, its already there, x 2. In essence there is no bills to pay for two- 3 months and my car fund can take care of the next one and my cash needs."

imo, you should stive to have a 6 month of living expenses saved up. (Food, utilities, house, etc).


4, My tax refund is for those large ticket appliance needs. I take that damn refund and buy a big 'thing' we all seem to need to buy at the worst possible time and buy it the day after the refund hits my account.

I would adjust your income tax withholdings with the goal of not getting more than a couple hundred dollars back in taxes or owing no more than a few hundred dollars to the Feds or State. By getting a large tax return back each year is just giving the Feds or State a free loan. I would prefer to have the money coming to me.

Not a bad plan. I would do whatever you can to get totally debt free. Pay off the smallest debt first, then the next largest, etc.
Home mortgage should be on a 15 year fixed.

The goal is to get debt free way before retirement. Then save / invest like heck to prepare for retirement.

Is this smart or stupid?

 

[mrjurrs]

Imo, the only stupid thing is to do nothing. If it works for you, tweak it to make it work better.

 

[The Stars Tremble]

Imo, the only stupid thing is to do nothing. If it works for you, tweak it to make it work better.

Hey! Doing nothing is my particular skill. I sleep a lot, and when I'm not sleeping I might as well be.

 

[Ganondagan]

For my short term savings I use VIO bank Money Market Savings Account, current interest 5.7%. Easy next day transfers.

 

[Jkca1]

Did you know you can purchase short-term T-bills?

Treasury Bills — TreasuryDirect

www.treasurydirect.gov

 

[dseag2]

I put pretty much everything on a credit card and get points. I pay the statement amount every month. No interest ever charged. I get a lot of free stuff on Amazon.

Hey. Their rules. They are gambling I will not pay off the statement amount. And I’m gambling that I will.

This. And I get cash back on many purchases.

 

[beefheart]

I put pretty much everything on a credit card and get points. I pay the statement amount every month. No interest ever charged. I get a lot of free stuff on Amazon.

Hey. Their rules. They are gambling I will not pay off the statement amount. And I’m gambling that I will.

I do the same, but pay as soon as its posted, and its an airline card, so, miles!

 

[Checkerboard Strangler]

I'm going to go look at a 66 New Yorker this week...


Saved up for a long time.
Also "this close" to being able to get a 65 300 which I prefer.
It's a bit more money though.



I haven't made any large extravagant purchases of that kind in over a decade so I figure I deserve to treat myself and
wifey agrees for one simple reason: "When's a better time, in another ten years when I might not be able to drive anymore?"

So yeah, get one, enjoy it while I can, and when the time comes I can either give it to my daughter or sell it.

 

[Bok Tuklo]

I'm going to go look at a 66 New Yorker this week...
View attachment 67515388

Saved up for a long time.
Also "this close" to being able to get a 65 300 which I prefer.
It's a bit more money though.

View attachment 67515389

I haven't made any large extravagant purchases of that kind in over a decade so I figure I deserve to treat myself and
wifey agrees for one simple reason: "When's a better time, in another ten years when I might not be able to drive anymore?"

So yeah, get one, enjoy it while I can, and when the time comes I can either give it to my daughter or sell it.

Damn straight!

 

[ModernDiogenes]

I put pretty much everything on a credit card and get points. I pay the statement amount every month. No interest ever charged. I get a lot of free stuff on Amazon.

Hey. Their rules. They are gambling I will not pay off the statement amount. And I’m gambling that I will.

That’s what I do. I run around $50K annually through a 2% cash back card, paying every bill I can through the card - internet, streaming, electric, gas, cellular bills, etc, and that’s my Christmas club for the grandkids. I pay it twice monthly to zero to keep the balance down.

Down load it into Quicken, I know where every cent went.

 

[Bok Tuklo]

That’s what I do. I run around $50K annually through a 2% cash back card, paying every bill I can through the card - internet, streaming, electric, gas, cellular bills, etc, and that’s my Christmas club for the grandkids. I pay it twice monthly to zero to keep the balance down.

Down load it into Quicken, I know where every cent went.

It definitely makes budgeting a lot easier when you have a centralized detail of expenses.

 

[Checkerboard Strangler]

Damn straight!

I used to HAVE a 65 New Yorker, given to me by my old boss Hal Jepsen, it was his mother's car.
But I was poor and on the verge of a divorce and both head gaskets were fried.
Bye bye 65, boo hoo, I did love that car though.

This time I'll do better.

 

[Bok Tuklo]

I used to HAVE a 65 New Yorker, given to me by my old boss Hal Jepsen, it was his mother's car.
But I was poor and on the verge of a divorce and both head gaskets were fried.
Bye bye 65, boo hoo, I did love that car though.

This time I'll do better.

I’ve had a few fun cars. 1983 Trans Am, 1979 Triumph Spitfire, a couple others. My favorite was a 1991 Saab 900 Turbo convertible. I was sad to see it go.

Now I have a 1967 Sunbeam Alpine. It will probably be my last. But you never know.