Monday, June 23, 2014

Rainy Day News

News today on Americans lack of savings.  Since our emergency fund has taken a hit this year (more on that later), I can relate to this news.  Our emergency fund is down to less than 3 months of expenses, which causes me great consternation.

Most of the time we are able to plan ahead for expenses, meaning that if we have a house project, like our recent new roof, we save up for it and then we incur the expenses.  We were not able to do that with the roof because we had to replace the roof prior to the rainy season here in Florida.  We had a recent family vacation, planned by family, that we were similarly not able to plan for (and our vacation savings fund was depleted due to a prior planned for vacation).  And now, we've got car issues (more on that later).

But, putting all that backward slide aside, we generally do well with our savings because we have a system in which we put savings first on our list of expenses.  Which means we pay ourselves first and second.  First is our pre-pay savings, meaning the 401k.  And, second is our automatic savings which goes for things like the emergency fund, the travel fund, annual and semi annual expenses like taxes and insurance, etc.  But, our automatic savings is based on planning and when our planning is either wrong or we have unplanned expenses we run into trouble - which is where we are at now.

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