saving

what i will be talking about today is liquid savings, as in an actual savings account.

we don't follow dave ramsey's method exactly. technically we do the 10-10-80 budget (10% tithe, 10% savings, 80% everything else), and beyond that we apply dave ramsey's basic principles, with a little suze orman thrown in (we follow her advice regarding credit -- dave says no credit, suze says protect your credit). dave says to put away an emergency fund of $1000, and then don't save any more until you have all debt paid off. but we save anyway.

if you'll remember from my budget outline, we actually save 5% and invest 5%. we feel it is wise to do both of those things, but we can't afford to save 10% and invest right now (we do put 10% of my "net" pay into savings). tomorrow i will talk more about investing.

we define "net" as being after our tithe too. so we take jake's take-home pay (the actual amount on his paycheck), subtract the amount we tithe (see yesterday's post for more info), and the amount we're left with is our "net". so multiply that by 5%, and that's how much we save. similarly to yesterday, we had to set a specific amount for this category, since we aim to end up with -0- after we have paid all our "accounts" (see our budget outline). it sure doesn't feel like much on a monthly basis. but we don't touch that money, and it adds up -- slowly, but surely.

once we have transferred the specific amount to our savings account, we have some mini-"accounts" within savings that we keep track of (for separate line item on our budget list, we have a spreadsheet we keep up with). we aim to have certain amounts in each of the following savings categories: emergency home repair, emergency medical, car replacement, and unemployment. so when we are tempted to take money out of savings to buy, say, a new coach purse, it's a pretty big deterrent to see that money coming out of the "car replacement" fund (knowing we desire to NEVER again have a car payment).

i know i didn't explain this very well. so seriously, please ask any questions you may have! hope this has helped :)