Budget

[MamaENH]

I am having a hard time setting up my budget, not for the fact of not knowing what I owe where- but because I am now adding categories that I have not saved for before. For instance furniture replacement, car replacement, etc. If you feel comfortable could you give me the dollar amount for each category you are keeping an envelope system for?

[mombottoo]

It would depend upon what your income/expenses are and what you can set aside without having your "have to pay" debts go late or unpaid.

And, how often you replace your furniture or car. I generally drive my cars into the dirt. When I do replace my car I know it's going to run between 3-6 thousand to replace. Since I drive my cars for 5 or more years at a time I try to put aside at least $1,000 per year. For furniture I don't do anything...I rarely buy new and if I do need to replace something I pay for it out of our general fund.

[MissouriAngel]

I'm in the same boat as you. Plus our income varies every paycheck since we're self employed. I'm working on it though! Good luck!

[Sumacaroni]

Yup, depends on how soon and how often you'll plan on replacing your vehicle, furniture, etc. We have to replace our truck this year but first we're finishing off our debt snowballing. After that is finished next month, we know we'll need about $4000 to buy a truck. $2000 will come from selling our current truck, the other $2000 needs to be saved by summer, so we have 4 or 5 months to come up with the other $2000. The plan is to stick $750/month in the Truck Replacement Fund.

You have to figure how much you think you'll need to spend and when in order to set a savings figure. If you are unable to meet the "when" because you don't have the available money to save in that amount of time, then either the how much or the when (or both) needs to be adjusted.

[Wendy99]

What you save will depend on your budget - how much do you have left for these items - where does it fit on your priority list. Do you need to buy new car/furniture or are you willing to get them used? Do you have a lot of debt to pay off first, do you have an emergency fund? We are not saving for a vehicle until our debt is paid off. We go used for 99 per cent of our stuff .

[Anna43]

It is easy to over complicate a budget. I think no more than 4 categories for savings. Emergency fund. Long term savings for retirment. Auto. And general for everything else. If you are planning to purchase a home in the future, then you might want to add a category for that. When you look at your general savings account you have to make choices -- do you want new furniture or vacation or ??

If you make your budget too complicated you will not stick with it.

[gmarie]

DR does teach that you should having "sinking funds" for many categories, including car and furniture replacement IF you are beyond BS2 or BS3.

He teaches that if you are in debt, there is really no reason to be saving for furniture replacement -you should save your $1000 baby emergency fund and throw every extra penny toward your debt.

Good luck!