Is this plan okay for our tax return

[ansley]

I know I should adjust withholdings so that we don't have a big refund. But I use this to save a little money. If DH sees it he spends it. He spends it sometimes without looking to see if we can make the payments. Yes, I said payments. Okay vent over.

The plan is to take the refund and put it on DS#2's med bills. It will pay about 50% of it. This is in line with BS# 2.0. Except I refused to put it on DH's tool box that he bought on payments without telling me anything about, not even to budget the new payment. My concern is that we don't have any sinking funds. I know Christmas comes Dec 25th but there is nothing set aside for that or school supplies or etc. I keep telling myself that the BEF is higher than $1000 so anything above that could be used for a sinking fund.

My security gland has been in overdrive lately for some reason. So, it may just be me. I don't know anyone IRL that is on the DR plan (any plan for that matter) and just need a little encouragement I guess.

As a side note: DH is doing better but it has only been 2 months. His record is 3 months.

[Greebo]

Maybe you should focus on planning for sinking funds - using emergency fund money for known, planned expenses like Christmas is ... not the smartest plan...

[Ceashels]

I am thinking that you should be putting something away for future expenses that you know of first and get those sinking funds started. As long as you are not missing payments of any kind, this way when school and Christmas comes you won't be calling it an emergency because you planned ahead.

[ansley]

I see what you are saying and that is kinda what has me unsettled but I thought that as we have more in the BEF than BS#1 I could use the extra as a sinking fund.

If I took out half the current BEF for sinking funds I would have 1 months take home for me in BS#1 and have fully funded School clothes, supplies and Christmas sinking funds.

[Denvergirlie]

If I took out half the current BEF for sinking funds I would have 1 months take home for me in BS#1 and have fully funded School clothes, supplies and Christmas sinking funds.

Does your 1 month of take home, cover a month of expenses? Is it at least the $1K for the BEF that you need in there?

If so, then yes, reallocate the BEF, to be called sinking funds.

If those sinking fund are then full, then yes, pay off debt with the tax return.

good luck

[AmyBoz]

I'm not the expert in this, but I just wanted to pipe in and say that at least you've got a plan! I've heard of so many people talk about the big screen tv's they are going to buy with their returns. A plan to pay off debt is a MUCH better way to go! So congrats on the plan!

[Samigirl]

It sounds like you have a good plan in place. We have our $1000 baby emergency fund and our sinking fund in the same account. I keep $1000 strictly for emergencies, but any amount over that gets allotted to different categories such as, Christmas, car repairs, etc. I have it broken down in Quicken the amount of money each "virtual envelope" has. It sure is helpful to have money set aside for those types of expenses. It keeps the REAL emergency fund intact. Keep up the good work!

[Samigirl]

I wanted to add....just because you've named every dollar, doesn't mean that money is suddenly gone (until it's actually spent of course ). You can always reevaluate and move money around if you have a higher priority that pops up.