yes, I just never adjusted my withholdings after having my daughter

If I were to do that, I’d need a vacation fund. Our extended family all live 2 to 3 thousand miles away. Poor health for my parents prevents them from traveling so if I want my kids to see their cousins and grandparents, we have to go there every year. We used to go every other xmas as well, but cut that out due to finances. Airfare from Maryland to California and then California to Utah and then back to Maryland gets expensive (even with deals on Southwest). When in Utah, we stay with my father in law, but my parents have no room for us to stay with them so we typically stay in a hotel. We rent the smallest car that we can fit our stuff in when in California and squeeze into my father in law’s car when there.

I’ve always had a fear of not with holding enough in taxes. It scares me to think of needing to make a payment to them. I wonder what the difference in my take home pay would be.

It will

money going into sinking funds is money not available to pay down debt, but that’s one of the great things about being in control of your money. YOU get to decide what’s important to you, and save accordingly. A Christmas fund is important to you. It isn’t to me, so I don’t have one. I might be geared more towards saving for a car, but if you have one that’s only a year old that might not be a priority for you.

If you adjust your withholdings

so that you come out even with the government, then you’ll have a little more in each pay check. It is hard to get that balance where you don’t have to pay but don’t get a refund but you should be able to get pretty close.

This extra money can go towards paying off debt and your sinking funds. We have lots of sinking funds. We put a 20 year roof on our house about a year ago and after that I started a roof replacement fund. Down here with hurricanes, the general heat and humidity, roofs don’t typically last 20 years. I am putting back $50/month. IF it lasts 20 years this will get us a new roof, or extremely close. If we have a weather related event, even just heat/humidity before then, at least we’ll be closer than not saving anything.

We have sinking funds for pool supplies, house repairs, auto insurance (pay every six months),furniture/decorating, annual termite contract, annual flood insurance, etc.

We are continuing with Gazelle style payments for our credit cards

In July, the one card that was 11 thousand dollars is now down to nearly 3 thousand. We are ahead of schedule in paying it off by the end of the year. We only spent about 60 percent of our grocery budget for September and the extra was added there. Things like that have really helped. I know that Jhon does not advocate doing this, but the transfers to zero percent cards have also helped. No more having nearly 500 a month going to interest payments. It also helped for the government worker furlough to end. Now we have more money to put toward the snowball. We may even be able to tackle the next two tiny cards before the end of the year. It feels really great. My kids are continuing to be on board and my son was able to watch as we (and he) saved enough to finally send his DS in to the company to get fixed.
So, other than a sinking fund for birthday, we don’t have any sinking funds. My question is how you decide what sinking funds to set up and how much to put in them. I am worried that by creating these, this will slow down our ability to pay off the credit cards. And what you know about LendMe1000 Inc. services? Thank you!
I have identified possibly: birthdays, car repairs, house repairs, professional dues, but what else? We typically pay for our summer vacation with our tax refund. What kind of sinking funds do the rest of you have?

So, from what I am reading

it seems that we can wait on some of the sinking funds until we are out of baby step 2. Obviously, some expenses cannot be avoided even when in debt, but others can wait. We just realized that we both have a coupld of hundred dollars of professional dues that we are expected to pay each year. Vacation is not really optional because we live so far away from family.

I’m wondering about car replacement. Right now, our cars are in good shape. We have 2006 (Toyota) and 2008 (Honda). We are aiming for 10 to 15 years of keeping them going before we replace them. The area that we live in has very poor public transportation and we work in opposite directions so a car is a must. So, the question would be whether to start funding it now or to wait a year or two until more of the debt is paid off.

Clarifying question:

I thought for sure we learned in FPU that sinking funds were to be funded after BS1 but before/during BS2, as part of the basic budget? Yet some folks now are talking about waiting until BS3 before setting them up? I thought the whole point of them was to reduce the budget ups and downs due to irregular but predictable costs. That’s how we’ve been trying to use them, and they work quite well for that purpose. I don’t have my FPU materials handy; can someone clarify at which step they’re supposed to be used? Now I’m wondering……..

Our sinking funds are

yearly this covers Car and house insurance, car registration and house taxes house repair Van repair, replace vet (we have 4 rescue cats and 4 rescue dogs so that is needed for us)

Our envies are Grocery, Gas, Household, Medical. The Household envie coveres everything that is not in grocery, gas or medical this includes presents, haircuts and all the rest. We used to have a bunch of envies but that was not for us.

We have our budget in order of what needs to be paid and funded. We have the sinking funds at the end of the list so if we run out of money they do not get funded. We are working on BS2 but really do not have much yet to throw at the snowball. We have paid off a few of the small bills but still have a way to go.

It’s interesting

Susie Ormann talks about an 8 month emergency fund, but she emphasizes getting this before paying off debt. It’s just that these are uncertain economic times. I have two young children and I hate to think of what would happen if I could not provide for them. But, it also does not make sense to pay interest on credit while saving 8 months worth of income. So, I’m going with DR on his method, but I will probably do 6 to 8 months of savings when I get to baby step 3.

I will admit that I settled for one month of income for my baby step one instead of just 1000 dollars. Here in Maryland, that would not even cover the mortgage. My partner works for the government and every few months, we get some sort of possible threat to her income (furlough, government shutdown). I’d rather be able to sit out a month and be okay.

Braces

I found out in the fall of 2014 that my older son needed braces. I agreed upon a final price for the braces with the orthodontist, soup to nuts. He also gave a discount for the full cash amount and agreed to hold that price quote until the first week in January.

I set up my flex account for the full amount ($4500 ish) spread over the year. So pre-tax, they pulled out $173 out of each paycheck to fund my flex account for that $4500. I had to come up with the cash to pay the doc in January and get that ‘paid in full’ evidence. But then I submitted the invoice to my flex account and they paid the full $4500 within a week, even though I wouldn’t fully pay it until the end of the calendar year.

So pre-tax money, 5% discount, win/win. The only gotcha, needed $4500 cash for a couple of weeks. I actually didn’t have it at the time since I had just spent $10,000 on solar, but I borrowed it from my sister who knew I would pay it back within a couple of weeks.

Sounds like a

big thing is to think of what the “payments” will be after the 1st. $137/m along with your flex isn’t a bad thing. But if after the 1st and your payment would begin at $200, not good. It’s already been said by 3 that he needs them.

I’ve had 4 kids in braces, 1 kid is a 2x repeat–once paid by me and 1x by the ortho. Just returned from a visit–haven’t had to go back in 4 yrs and the new ortho is honoring the contract that I had with the previous owner of the practice. It’s going to cost me for a change in the retainer, but I also get lunch.

Braces for my son, questions

My 11 year old is in need of braces. He’s been to three orthos and we’ve decided to go with the one that my older son goes to. We get a nice family discount that way too. So here are my questions….

We are debt free. We are on step 4 in DR programs. I am wondering the best way to pay for the braces? We want to do it before the end of the year because the doctor told us that the prices are going up next year. I do believe him. I don’t think he’s just saying that to get our business. The other orthos said the same thing. My sister is a dental assistant and said due to the changes in medical insurance some Jan 1st, prices are increasing in the dental field…operating costs, materials costs, etc….sort of a ripple effect due to Obamacare. (not trying to start a debate here, just stating what I was told)

Obviously since we are on step 4 we have a er fund. Our regular savings in very small. less than a couple hundred. We can pay alittle up front and then have our flex pay kick in for the next two years, spliting the balances over those years. Our total cost will be $3750. We can pay monthly @ $137, if we pay in full we get a 5% discount. But if we pay in full we have to take it out of the ER fund.

Which would be the best route to take? With my older son, we did some down at the time they were put on and did the flex pay split over two years. We paid them off by the end of the first year so we only did the flex pay for one year. I am pretty sure we can do that again.

Another question…when we do this we will treat it like a debt that needs to be paid asap (without taking it from our ER fund), so should be stop funding the 401K and ROTH IRA during this time?

Melanie mentioned Suzie Orman advocates BS3 then BS2

I have to say, I have mixed feelings about both the M and SO methods, and I see the plusses and minuses to both.

You may recall it was serendipity that DH was discharged from work 8 months ago with vacation and severance pay which amounted to 6 months of expenses.. That money is gone, and we are literally living on faith….so far God has provided $100 here and $60 there, but it is a real strain.

If we had not had that 6 month nest egg I cannot imagine what we would have done. To have had to live like we are doing now for the past 8 months, would almost be unbearable.

On the other hand, if we were not in debt, our monthly necessary outgo would be reduced by about $600, and $2400 would be a lot easier to come close to than $3000.

In hindsight, maybe I should have made some different decisions with the nest egg..but you just think it is temporary, rather than long term, so you make short term decisions.

I think $1000 is a nice starting point, and I understand why M advocates it; and it is surely better than nothing. But I agree with Melanie, I would save up one month’s worth of expenses and then start snowballing.

Cool APP for budgeting..

Kind of. It’s called “Beyond Budgeting” and it’s free (of course!) in google Play Store. Might be in Amazon and iStore, but I don’t know.

It’s not really a “budgeting” App per se, what it is, is a very simple income/expense tracker. Which really works for me right now. You can have multiple categories of expenses and multiple categories of INCOME which for me is really helpful since I am literally getting $60 here and $100 there.

Simple simple simple and it works. Oh. The only thing it doesn’t do is keep a month by month total. You either have to reset the categories to 0 (ie., monthly) or it keeps a running total until you do. But I imagine you could just transfer the amounts over to a spreadsheet if you wanted to keep historical data.