Author Topic: More common sense than badass, but I am a slow learner  (Read 2166 times)

ACyclist

  • Bristles
  • ***
  • Posts: 278
More common sense than badass, but I am a slow learner
« on: November 30, 2017, 09:50:42 AM »
We have two times a year where large bills are due.  November is property tax time and February is insurance time.  Usually, I would neglect to put anything away during the year to cover this.  Those months end up a "fire in my pants" emergency to take it out of our monthly, or withdrawing it from our taxable savings.  I really don't like watching balances go down. 

I had an epiphany.  Why don't I sock away the amounts to cover these expenses, on a monthly basis?  I set up budgets on mint for these amounts.  No more stress.  When the bill comes, I just pay it from my reserved funds.   

It is so nice to be really organized.  This kind of organization prevents stress and will be best for us in the long run.

This month will be the second month where our savings rate has soared.  73% savings rate this month. I know that this amount may go up and down with emergencies, but still it is epic.

Travis

  • Handlebar Stache
  • *****
  • Posts: 2233
  • Location: Arizona
Re: More common sense than badass, but I am a slow learner
« Reply #1 on: November 30, 2017, 11:08:20 AM »
Congrats and good start.  You can apply that lesson towards vacations, vehicle maintenance, known gift-giving events, and many others to help keep your finances straight.
My Journal: http://forum.mrmoneymustache.com/journals/will-i-or-won't-i-a-home-run-or-a-base-hit/

Unlike some other tech companies or skilled-labor industries, we're always hiring.

www.goarmy.com

Aegishjalmur

  • Stubble
  • **
  • Posts: 133
Re: More common sense than badass, but I am a slow learner
« Reply #2 on: November 30, 2017, 11:18:03 AM »
You claim it's more common sense than badass but from an article earlier this year:"Nearly six in 10 Americans don't have enough savings to cover a $500 or $1,000 unplanned expense, according to a new report from Bankrate"

http://money.cnn.com/2017/01/12/pf/americans-lack-of-savings/index.html

So given that figure I would say it qualifies as badass as you're planning ahead more than the majority of people do. 

Plans are useless. Planning is indispensable.

ACyclist

  • Bristles
  • ***
  • Posts: 278
Re: More common sense than badass, but I am a slow learner
« Reply #3 on: November 30, 2017, 11:24:40 AM »
You claim it's more common sense than badass but from an article earlier this year:"Nearly six in 10 Americans don't have enough savings to cover a $500 or $1,000 unplanned expense, according to a new report from Bankrate"

http://money.cnn.com/2017/01/12/pf/americans-lack-of-savings/index.html

So given that figure I would say it qualifies as badass as you're planning ahead more than the majority of people do.

I am making baby steps, and I figured the pros around here would laugh like "Duh, you should have had an impound account started as soon as you paid off the real estate or took on the responsibility of paying that yourself." 

GnomeErcy

  • 5 O'Clock Shadow
  • *
  • Posts: 98
Re: More common sense than badass, but I am a slow learner
« Reply #4 on: November 30, 2017, 11:29:11 AM »
Nice! This is a super simple thing to do that will make dealin with those bills a lot easier. I started doing this a few years back and it's definitely smoothed the ride. I just set up a separate savings account for periodic payments like that, dump the appropriate amount in there, and am good to go.

Brother Esau

  • Bristles
  • ***
  • Posts: 259
Re: More common sense than badass, but I am a slow learner
« Reply #5 on: November 30, 2017, 05:19:48 PM »
badass worthy

soccerluvof4

  • Magnum Stache
  • ******
  • Posts: 3318
  • Location: Artic Midwest
  • Retired at 50
    • My Journal
Re: More common sense than badass, but I am a slow learner
« Reply #6 on: December 03, 2017, 03:44:39 AM »
Thats exactly what we do.  We have an account in our budget on Mint for Insurance (but its house and Auto) and one for Property Taxes and each month make a payment to that account. For us it just helps shorter term staying in our budget longer term because I always like the challenge of trying to beat it month to month.  Congrats!
" In life you don't get what you deserve you get what you negotiate"

HappierAtHome

  • Walrus Stache
  • *******
  • Posts: 7952
  • Location: Australia
Re: More common sense than badass, but I am a slow learner
« Reply #7 on: December 03, 2017, 04:12:56 AM »
Congratulations on your badassity ACyclist. It's wonderful to see someone join the forum and 'level up' with their finances so quickly :-)

ACyclist

  • Bristles
  • ***
  • Posts: 278
Re: More common sense than badass, but I am a slow learner
« Reply #8 on: December 03, 2017, 12:18:00 PM »
Congratulations on your badassity ACyclist. It's wonderful to see someone join the forum and 'level up' with their finances so quickly :-)

Is there a competition for most improved?  Zero to hero?  :)

We have come a long way from where we were 5 years ago. We weren't even contributing to retirement back then. Add exotic vacations and nice toys along the way.  It's shameful, really. 

There may still be hope for us.  We may not retire as early as some, but we will go earlier than most. Thanks, MMM.

GettingClose

  • 5 O'Clock Shadow
  • *
  • Posts: 74
Re: More common sense than badass, but I am a slow learner
« Reply #9 on: December 03, 2017, 01:48:52 PM »
Why don't I sock away the amounts to cover these expenses, on a monthly basis? 

I started doing this a few years ago, and it really does help with the stress levels.  I get paid twice a month, and put $500 from one paycheck towards the next property tax bill and $500 from the other towards saving for the next car.

Rosy

  • Handlebar Stache
  • *****
  • Posts: 1703
  • Location: Florida
Re: More common sense than badass, but I am a slow learner
« Reply #10 on: December 14, 2017, 05:50:09 PM »
One of the few financial rules I live by - plan for the year and then consider the next five years. Anything over $300 becomes an item on my list - to plan for.

Congrats, it is what separates the stressed out from the folks who quietly go about their business with nary a ruffled feather. Christmas comes each year, cars and appliances die or need repair, it is a given.

Bbqmustache

  • Stubble
  • **
  • Posts: 221
  • Age: 2013
    • Financial Literacy Conversations
Re: More common sense than badass, but I am a slow learner
« Reply #11 on: December 20, 2017, 06:39:10 AM »
The technique is called Sinking Funds, and it's what our grandparents and great grandparents used in the dark days of pre-credit cards.

An article about this method is on my blog, here's the link:

https://financialliteracyconversations.wordpress.com/2014/02/25/using-personal-sinking-funds-to-improve-your-financial-situation/

acroy

  • Handlebar Stache
  • *****
  • Posts: 1686
  • Age: 40
  • Location: Dallas TX
    • SWAMI
Re: More common sense than badass, but I am a slow learner
« Reply #12 on: December 20, 2017, 06:48:32 AM »
Badass I guess :)
I too have a large property tax bill every Jan, almost $5k. I yank it out of Vanguard where it has been making more little green men all those months and pay it. No biggie. Don't let big money sit in savings/checking earning zilch!
SWAMI
1 DW, 7 MiniMMMs, 1 'stache, many bicycles.

ACyclist

  • Bristles
  • ***
  • Posts: 278
Re: More common sense than badass, but I am a slow learner
« Reply #13 on: December 20, 2017, 07:20:45 AM »
Badass I guess :)
I too have a large property tax bill every Jan, almost $5k. I yank it out of Vanguard where it has been making more little green men all those months and pay it. No biggie. Don't let big money sit in savings/checking earning zilch!
I don't love this idea. The idea of the impound account is that the funds will be available to use as the bills come due. Some of you guys talk like there is never a down market. We all know it is coming.
On the same topic, I liked being balanced. 60/40 or 50/50 being even more protected.