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December. I spend all year preparing for this month. It’s a magical time of year that includes using my sinking funds to avoid sinking my budget.
For years, I didn’t plan for the fallout of December. Instead, I would take the random expenses as they came. This created a lopsided effect on my budget. Some months I would have plenty of money for saving, other months I would barely saving anything.
It was a choppy sea of finances and my budget would end up randomly vomiting money.
After much support from the various books and blogs, I finally decided to make an excel sheet of my big annual expenses. It took effort to establish but I am so glad I took the time to grind it out.
It is much easier to plan for an escape route when the ship isn’t sinking. When the December expenses loom like an iceberg on the horizon, I use my prior year’s inventory of expenses to avoid colliding with large bills and keep speeding towards my financial destination.
TYING DOWN TRIVIAL
Adulting Adventures is the name of my sinking funds account.
As I was setting up this separate high-interest savings account, I christened it Adulting Adventures. I have different names for all my accounts because naming them gives them a journey to call their own.
Adulting Adventures gets the brunt of hardship because it isn’t meant for retirement, traveling, or any other dreamboat journey. It is a battleship that is designed to keep my budget afloat when those big bills come calling.
I reverse engineered how much to save every month. First, I calculated my yearly expenses which include medical expenses for glasses and a mouth guard, car bills like insurance, and gifts. I even throw in accident money like my car deductible and replacing my laptop.
Next, I divide that large number by the number of paychecks I am expecting. Saving this small amount every month feels much less painful than the large, gaping holes of big expenses.
Since I can pay for bigger bills in full thanks to my sinking funds, I get rewarded for this foresight.
Back when I paid for insurance monthly, it always charged me a bit more for “convenience”. I am not interested in paying any more than I have to, convenience or otherwise.
In some instances, I can use a credit card for these bigger purchases. I put everything on my credit card, mostly for the points but also because I would rather my credit card get hacked than my checking account. Since I pay my credit card in full every month, I don’t have to worry about interest or fees.
Turns out I enjoy the adulting game of saving money and getting rewarded for it. But I sound so old when I put it that way!
SAILING ON SAVINGS
When I was younger, I didn’t think about trying to make my life easier. I accepted that things were hard and I just had to “deal” with it.
Being older has many advantages. For example, I learned that I can, and I should, make unpleasant things easier. It will take more time and effort initially but once the autopilot is engaged, it’s smooth sailing for the rest of the year.
That is how I prefer to travel through adulting adventures. Preparing for those moments with a sea of savings but also with a financial lifeboat attached, just encase.