How do you pay for a "big ticket" item?

[Anonymous]

I agree with Singletary's approach. Don't put all your savings in an "emergency" fund because sometimes you need to spend on big ticket items that are not emergencies, like cars, etc. It is much more financially savvy to pay cash for these than take out loans.

Slice up your savings into a portion that really goes into long-term "savings" and a portion that allows you to preemptively save for big-ticket items that you do need or want to purchase at some point (cars, home repair, etc.). Allocate monthly or whatever works for you.

I go a step father and have a "vacation" fund. Otherwise I would feel reluctant to spend the money, but travel is DH's favorite hobby so I need to make room for it in the budget. My hobbies are more a monthly thing so it's only fair we spend on his too.

[Anonymous]

My husband and I are kind of frugal/cheap. So, even though we make a lot of $$ -- we go out and get second jobs like coaching or tutoring and use that cash to buy whatever we want.

[Anonymous]

We used to do this -- what I would call liquid cash; ie what we had on hand without going into savings accounts. But I found that for true big ticket items I was always selling myself short. Cars are expensive. Renovations are expensive. Appliances also. Buying the cheapest is not always the best. Now I use a no interest loan (need to be careful with those) or take it month by month out of savings (renovations.)

[Anonymous]

^^we also have a vacation fund.

[Anonymous]

Just reading this thread to "absorb" the knowledge so jumping in with ??? - are mutual funds considered liquid? Is this a common way to save your emergency fund?

I have an ING account as well with one month expenses but hope to soon save 3 months, 6 months, etc. - should things above the other slush funds go into mutual funds??

[Anonymous]

Personally, I think (stock) mutual funds are not liquid. The stock market could tank tomorrow and you would lose 1/2 your value.

In general,

http://financial-dictionary.thefreedictionary.com/liquid+asset

Could you convert it to cash in a few days for roughly the same value? Then it is liquid enough.