Saturday, April 28, 2012

Our "Freedom Account" and Savings Update

       I stumbled upon this blog all about how to live as a family of 6 on less than $28,000 a year!  The first post I read about was regarding her "Freedom Account". She got the idea from Mary Hunt's Debt Proof Living. A freedom account is a checking account that you set up for irregular expenses. The point is you have planned ahead and the cost doesn't break the bank or go on those never-ending credit cards.

      Irregular expenses are the thing that kick John's and my tooshes when it comes to budgeting. We have gotten really good at managing our monthly expenses and are finally ready to expand out and start saving - but as soon as I'm ready to hit that "send" button and move money from our main account over into savings something "comes up".

      I say "comes up" in a sarcastic tone, because usually we knew it was coming - or should have known. Like last months sudden car expense, well the check engine light had been on for a while so I should have known... *roll eyes here*. Fortunately it was a cheap-ish labor bill and the fix was even cheaper, but we also found out that we will soon need to replace a $200 part, but it bought us time. And I can go ahead and say that next month we'll have the "surprise" of needing to register the car. Like that doesn't happen once a year?!?

    Off the top of my head I would say that we should save for the following events/issues/bills in our Freedom Account.(Wedding/Shower gifts, Baby shower gifts, Car Registration, Car Inspection, Routine Car Maintenance) I'm sure there are more, but we'll have to figure it out as we go. Basically, you add up all these expenses and divide it by the number of paychecks you get a month, in our case 4. I hope it helps with the unexpected!

    Regarding our other savings... we haven't made it far, but we're working on it! : )

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