Dear Friends and Family,
I'm meeting with my financial planner this morning so money is on my mind. If nothing else, he keeps us honest about staying on top of it. In addition to retirement savings, I'm a firm believer in keeping three piles of money in semi-liquid funds.
Pile #1: Taxes. We don't escrow which means we do our own property taxes. Every month, the bank automatically takes a certain amount of money and puts it into a separate account so that when Mr. Tax Man comes knocking, we're ready. Last year we paid it out of our daily use money because we hadn't built up the transfer process yet. Now, we're all set up and should be ready to go come tax time.
Pile #2: Just in Case Fund. I like to keep one year's worth of spending money in a semi-liquid account. It means, if either Mr. mouse or I get laid off, we have a cushion to live off of before we need to dip into savings. Actually, I'm pretty conservative. If one of us gets laid off, we can live off of the other income - it just means we stop saving aggressively for retirement until we're both gainfully employed again. It's only if we both get laid off simultaneously that we'd need to draw from the Just in Case Fund.
Pile #3: Rainy Day/Shiny Bauble Fund. This one covers two completely different scenarios. It's money set aside for car repairs and furnace repairs and stuff. But, can also be used for vacations and toys and stuff. Either way, it's cash on hand for unplanned, larger ticket item purchases.
Mr. mouse and I have been using the year to rebuild our reserves after we spent it on mouse house repairs and renegotiating our mortgage. Currently, the tax pile is in place; the other two are works in progress. We've got about 56.25% of our just in case pile saved. That still equates to six months, so it's within the realm of decent. I hope to save the rest of it my end of year. It's aggressive. We'll see. And, the rainy day/shiny bauble pile hasn't been established yet. That's my 2008 goal.
Happy Friday, everyone.
Cheers!
mouse
I'm meeting with my financial planner this morning so money is on my mind. If nothing else, he keeps us honest about staying on top of it. In addition to retirement savings, I'm a firm believer in keeping three piles of money in semi-liquid funds.
Pile #1: Taxes. We don't escrow which means we do our own property taxes. Every month, the bank automatically takes a certain amount of money and puts it into a separate account so that when Mr. Tax Man comes knocking, we're ready. Last year we paid it out of our daily use money because we hadn't built up the transfer process yet. Now, we're all set up and should be ready to go come tax time.
Pile #2: Just in Case Fund. I like to keep one year's worth of spending money in a semi-liquid account. It means, if either Mr. mouse or I get laid off, we have a cushion to live off of before we need to dip into savings. Actually, I'm pretty conservative. If one of us gets laid off, we can live off of the other income - it just means we stop saving aggressively for retirement until we're both gainfully employed again. It's only if we both get laid off simultaneously that we'd need to draw from the Just in Case Fund.
Pile #3: Rainy Day/Shiny Bauble Fund. This one covers two completely different scenarios. It's money set aside for car repairs and furnace repairs and stuff. But, can also be used for vacations and toys and stuff. Either way, it's cash on hand for unplanned, larger ticket item purchases.
Mr. mouse and I have been using the year to rebuild our reserves after we spent it on mouse house repairs and renegotiating our mortgage. Currently, the tax pile is in place; the other two are works in progress. We've got about 56.25% of our just in case pile saved. That still equates to six months, so it's within the realm of decent. I hope to save the rest of it my end of year. It's aggressive. We'll see. And, the rainy day/shiny bauble pile hasn't been established yet. That's my 2008 goal.
Happy Friday, everyone.
Cheers!
mouse
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