This is great! I have posted about this also. My and my fiance have about 7 or 8 joint savings accounts at ING all with different purposes. They cover car repairs, insurance, gifts, clothing purchases, furniture and household items......a lot of different things. It was rough to get this started, but now it works out really well.
I really really really strongly advise you to go a little bit high on this saving. You calculate it up to be $125 a month for such expenditures, but there will almost always be something you didn't think of that comes up. You should set up the deposit to be $150 if at all possible, more if you can. That way, when bills come, you don't have to panic or completely destroy that month's budget.
I like it. I think the 60% solution is...difficult, at best, to implement. I am gradually working my way into it by increasing savings percentages (retirement, short-term and long-term) as my income increases. That way, I don't really feel the bite of trying to get down to 60% committed expenses all at once. Still, since you and I are both young, we have enough time to actually ease into this if we commit to it.
For myself, January I will be increasing my retirement contributions to 12% of my base pay, and bumping up my Roth IRA and short-term savings as well. Basically, every time I get a pay raise of any kind, I just try to keep my committed expenses THE SAME, while raising the bar for everything else. Seems to be working.
Wish I got a match on my contributions though...that would be nice.
That is just about exactly what we do for all of our non-monthly bills - insurance, property tax, vehicle registrations, membership fees, holiday shopping, etc. Works great, and sure makes those temporarily forgotten bills a ton less painful when they arrive.
I'd go so far as suggest you give your partner's XMas idea a go as well, though you'd probably be a little late to start this year! We put ourselves on a holiday budget last year and saved throughout the year, and holiday shopping was blissful. Once we spent the budget, that was that, we were done. I know schadenfreude is probably not the most appropriate holiday feeling, but for entertainment we would just lazily stroll around and watch the almost-panicked masses trying to squeeze more onto their smokin' credit cards. And be very thankful that that was no longer us...
I love this idea. My partner and I have been very good about minimizing expenses to less than 60% of our gross but so far have not really tabulated yearly, expected expenses and planned accordingly. That's one of the things we will discuss in January in a "his/hers/ours" summit.
I am joining the chorus on this one. It is a great idea and once you have a short-term spending account you will wonder how you ever lived without one.
I have managed to set-up my savings into retirement, emergency fund, and spending account and have been happy with that ever since. The beauty of ING is how easy it is to seperate your savings into "Emergency" and "Spending".
I also like the idea of adding Christmas spending to the account. You can either start the account now and plan on using it for Christmas 2007 or transfer some cash from your emergency fund and work with the budget now and work on rebuilding the emergency fund ASAP.
I think I might be well advised to make a separate account for Xmas (and perhaps also for Bday gifts throughout the year).
If I went over-budget, I'd be short when it came time to pay the big bills.
Better to let gifts have their own account, and when it's empty it's empty, rather than having hundreds of dollars sitting there taunting me. I know I'd be thinking, "but my car insurance isn't due til March. By then I'll pay it back."
Even more than gifts, tho, we should be saving throughout the year for travel.
Now, how to find all this money to save?
Thanks for sharing. This is such a good idea. I always have this problem when I want to make charitable gifts or pay my renter's insurance. They are huge expenses but I save so much that my "free money" is really tight.
Ing is having a sweepstakes now for those who initiate direct deposit on a monthly basis. I think the minimum was $200...you'll see when you go on-line.
I have used the 60% plan, but I ran into a little trouble by not depositing fun money into a separate account with it's own debit card. Trying to keep track of fun spending and moving money around as I participated in various fun things became a headache, with not enough money getting tracked accurately.
Great idea.
We accrue into an interest bearing account for infrequent bills. Depending upon the frequency either an interest bearing checking account or a money market account.
I think your partner is right about xmas expenses too.
The 60% idea is great. I have to look and see if we're actualy doing it.
Have a great day,
makingourway
PS If you go to our blog, you can see our monthly budget - just search on budget.
Very late to the game here, but I absolutely love dividing up my paycheck every two weeks! It takes all of 5 minutes to make all the arrangements when things are working well and about 2 hours when not, but either way it totally provides fodder for fiscal fussin'.
I definitely feel like this is the best way to deal with the big chunks of bills like insurance: every couple of months [my insurance company is letarded] that huge bill comes, I suck in my breath, check online and voila! I usually only need to add a small chunk of money to top up the insurance account, if anything.
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