I'll join - Im working on sinking funds and a reno, retirement and paying off the last of a cc.
I have 3 mths living expenses.
Approx 500 emergency fund
I have a small mutual fund that is tagged for retirement, but it is not an IRA; perhaps a backup emergency fund
And 4500 credit card debt
My goals are:
to create a sinking fund (for travel, a roof and a sofa)
kitchen reno fund
open an IRA fund
increase living expense fund to 6mths and then a year
pay off cc
I recently got mad at the debt and moved 2400 from living fund to debt (last month). The rest I will attack aggressively over the next few months.
Last month I redid budget
This month, May, I will reach my 3mth living fund goal and will decrease the amount that goes here re allocate the $$ towards a sinking fund.
Up the cc monthly payment
And start a sinking fund.
I also put 166/mth into a house account for emergency; this is the "emergency fund" for the time being.
I loosely follow DR. But I also recently read an article in Real Simple (I like the financial advise in the magazine) She suggested to first create emergency fund and then living expense fund or sinking fund, open small retirement fund AND then pay off credit card. This way if you have to get something you have the $$. And then tackle the debt, increase retirement fund, etc. I think the big difference with her and DR, is getting a little more cash on hand before paying of debt.
Kitchen reno may be way down on a list but it is an investment/increase value of home for me. Its currently gutted right now and I will start saving towards the new stuff in the fall (need approx 8000. Getting it gutted before having $$ to renovate, the kitchen was a disaster and I am much happier with it empty them with what it looked like before. Risky perhaps, but sanity is good.
I am able to shift money around monthly to the different goals, depending on my mood. (see moved a bunch to pay of debt)
Retirement fund is also huge on my list. I need 3000 to open fund, so that is a goal for the end of year. And then in 2012
most of my extra money will go to this. (as reno savings will decrease, sinking fund will decrease, etc)
Ill just add that I am 44, with very little retirement money. The job I have pays well, but its contract work, year by year, so it becomes stressful, not knowing whether I will have an income for the following year. So having a big living expense fund is important as well as working on retirement. I have very little extras (no cell phones, no cable etc) car is paid off, but will need a new muffler, house payment is 10% of income. Oh, a biggie expense, is health insurance, 1000/mth. 60/40 ratio. I always consider dropping my portion which is already down to catastrophic (60% of expense). My kids portion is subsidized by the state.
Edited by SunRise - 5/13/11 at 2:28am