How/where do you save for "irregular/infrequent expenses"?

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AnnetteLouisan
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Location: New York, NY

Re: How/where do you save for "irregular/infrequent expenses"?

Post by AnnetteLouisan »

I have line items for stuff like that in my budget. I also have a “miscellaneous/unexpected” budget line item. It’s very rare that I go over my overall budget, which has extra fat built in, although here and there I go over a budget line item. I’m a lot more relaxed about this stuff since I hardly ever go over budget. I have a HYSA and income coming in. That’s where I pay bills out of. If anything I need to increase spending.
Last edited by AnnetteLouisan on Sun Oct 02, 2022 7:13 pm, edited 2 times in total.
Tamalak
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Joined: Fri May 06, 2016 2:29 pm

Re: How/where do you save for "irregular/infrequent expenses"?

Post by Tamalak »

I pay my investments first, then use the rest of my money for whatever I want. As long as I don't run out of money, I'm in my budget.
JayB
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Joined: Sat May 28, 2022 9:57 am

Re: How/where do you save for "irregular/infrequent expenses"?

Post by JayB »

As part of my liability-driven expense planning using a custom-designed Excel spreadsheet, I schedule recurring replacements for costly items by year, with a specified replacement schedule (how many years in between), and with a specified inflation rate. In my planning, I make sure that the projected cash available -- often from income and maturing bonds -- for each year stays subtantially positive. I also have a funding strategy established in my IPS for unexpected expenses and replacements needed before schedule or that go over cost to a point of depleting my cash available; basically, this entails selling bonds nearing maturity if necessary, delaying discretionary purchases, and/or taking a short-term margin loan. My income tends to exceed my expenses enough so that depletion of cash position is very unlikely.
Scotttheking
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Joined: Wed Apr 09, 2008 7:58 pm

Re: How/where do you save for "irregular/infrequent expenses"?

Post by Scotttheking »

Not retired.

I have a “savings” bucket which contains a quantity of cash by virtue of it being my central cash hub. From this account regular plus irregular known (taxes, insurance, etc.) expenses come out as needed.
I have an account with buckets for specifically budgeted variable amount items (wine, travel, etc.) which are spent from as wanted. They are buckets because my ability to spend money on that category is limited by available money.
I have a taxable investment account which is where big unknown irregulars come from. The amount I am willing to spend is governed by targets as this is the same account that will fund early retirement. Everything from major emergencies to new cars to house renovations go here.
hudson
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Joined: Fri Apr 06, 2007 9:15 am

Re: How/where do you save for "irregular/infrequent expenses"?

Post by hudson »

My current practice as a retiree:
Emergency fund...brokerage account
Problem Solving Fund (in a savings account): For when I don't have enough in my checking account.
It usually gets drained during the warm season by vacations, insurance, and property taxes. I fill it back with dividends/interest until it gets to 20 or 30K.
junior
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Re: How/where do you save for "irregular/infrequent expenses"?

Post by junior »

Marseille07 wrote: Fri Feb 11, 2022 12:34 am I just use Ally's overdraft feature where I essentially park $0 in checking and let them automatically pull from savings as necessary. I park 3 months worth of expenses there, and holding the rest of my fixed income allocation elsewhere. I rebalance once a month.

I don't earmark irregular / infrequent expenses ahead of time. However, I might temporarily tweak my fixed income allocation to accommodate known & big expenses such as buying a car.
It's my understanding that Ally will send you a sternly worded warning if you do more than 6 transfers a month from savings to checking. Does your system keep the overdrafts transfers at 6 or less per month?
sureshoe
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Joined: Tue Jan 15, 2019 3:26 pm

Re: How/where do you save for "irregular/infrequent expenses"?

Post by sureshoe »

The real question is how big.

I find that over a 12 month period, my checking account and spending fluctuate around 10%+/-. Christmas, vacation, repairs, etc... I find it all evens out. I know that each month I have a mortgage, utilities, insurance, etc. And then, I have $1000 or whatever of "stuff" that comes up. If the accounts starts getting below a certain mark, I take notice. If I get over a certain mark, I ship it off.

I think sometimes people overthink these things and their time is better spent making money than tinkering with it.
Marseille07
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Joined: Fri Nov 06, 2020 12:41 pm

Re: How/where do you save for "irregular/infrequent expenses"?

Post by Marseille07 »

junior wrote: Mon Oct 03, 2022 11:48 am It's my understanding that Ally will send you a sternly worded warning if you do more than 6 transfers a month from savings to checking. Does your system keep the overdrafts transfers at 6 or less per month?
Yes, I've had 3~4 transfers but no higher. That said, I no longer use this system as I changed my hub elsewhere.
Broken Man 1999
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Location: West coast of Florida, near Champa Bay !

Re: How/where do you save for "irregular/infrequent expenses"?

Post by Broken Man 1999 »

We are retired, and have no dedicated savings/investment accounts for "this" or "that" expense. All we have are our TIRA accounts from which we distribute $$ each month for our expenses.

Some months we distribute more, some months we distribute less.

Honestly, the fewer accounts of any type we have the better, at least for me.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
stargazerlily03
Posts: 59
Joined: Fri Mar 27, 2015 10:00 am

Re: How/where do you save for "irregular/infrequent expenses"?

Post by stargazerlily03 »

We have it in an American Express High Yield Savings account....for years.
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