Lack of money today

[Anonymous]

Anonymous wrote:I bought the house I have knowing things would be tight until DC entered public school. It was a one year window of "tight budget" and I agree - one little thing can throw the budget off completely. And one little thing seems to happen every month!! Hang in there - you will make it.

I have to add - I'm certainly glad I bought a year ago and not now. Not sure I could afford my neighborhood this year! Of course who knows where the housing market is headed over the long term. Again - OP - just hang in there.

[Anonymous]

Ok. Wait.

You have $350 in emergency funds. Stock options just sitting there (losing value every day, btw). And you over fund retirement.

You do what financial planners call "bucketing." You designate buckets for money and you are loathe to touch them, even when it means not getting your kids ice cream or haircuts.

Tomorrow, pull $36k out of the emergency fund and put it into your checking account. Walla. Things don't feel so tight anymore. And you still have $314k just in case.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Not a good plan to count chickens before they hatched...
it seems you did not account for emergencies...or if anyone lost their jobs...
Can u sell ur house?

We could sell the house, but why? If I lost my job, daycare would no longer be an issue. If DH lost his job, we would have to dip into the emergency account. There is about $350K in the emergency fund that is liquid.

if you have $350,00 in liquid assets in an emergency fund...then money really is not tight...u have something to pull for the expenses you say you are not sure how to cover over the next few months...or do u need $350,000 to cover 6 months of expenses in case of an emergency....??

Oh heck no! I can't imagine spending all that money in 6 months! I guess I always thought of those funds as untouchable unless there was a true emergency. To me, this is uncomfortable, annoying, inconvenient but not an emergency.

[Anonymous]

Anonymous wrote:Ok. Wait.

You have $350 in emergency funds. Stock options just sitting there (losing value every day, btw). And you over fund retirement.

You do what financial planners call "bucketing." You designate buckets for money and you are loathe to touch them, even when it means not getting your kids ice cream or haircuts.

Tomorrow, pull $36k out of the emergency fund and put it into your checking account. Walla. Things don't feel so tight anymore. And you still have $314k just in case.

THIS!

[Anonymous]

Anonymous wrote:Ok. Wait.

You have $350 in emergency funds. Stock options just sitting there (losing value every day, btw). And you over fund retirement.

You do what financial planners call "bucketing." You designate buckets for money and you are loathe to touch them, even when it means not getting your kids ice cream or haircuts.

Tomorrow, pull $36k out of the emergency fund and put it into your checking account. Walla. Things don't feel so tight anymore. And you still have $314k just in case.

Yes, that is exactly what I do. I understand what you are saying. But is this truly an emergency? And yes the options are losing money. I look every day to see if today is a better day. It is not.

[Anonymous]

I'm like the OP. We have the options, but we have no cash and we are completely strapped despite making a good living. This was largely due to poor planning on our part and some life emergencies that ate away at our emergency fund.

You have to ask yourself: are you really out of cash or are you having to budget? In other words, if an emergency came up (like your roof caved in) could you sell the stock immediately to cover your expenses? Or would there be an issue. You also have to ask yourself if you would spend the money once you sell the stock. Is it worth it to sell the stock to buy ice cream? No. Is it worth to sell the stock b/c you can't afford to clothe your children and put food on the table, yes. For me, I like knowing that there is stock that I can sell if I have to do so, but I don't sell it until I need to do it. That is terrible financial planning, I know, but I'd rather have some money possibility than have it in an account and blow it. For us, we will be selling stock at the end of the summer, and it is earmarked for a very specific purpose. Everything else will go in a bank account that we can't touch. And that is becaue I want to make sure that we don't spend it on things that we don't need.

So you have to ask yourself if you really need the money or if you want the money. I wish that I had been more frugal in my earlier year.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Ok. Wait.

You have $350 in emergency funds. Stock options just sitting there (losing value every day, btw). And you over fund retirement.

You do what financial planners call "bucketing." You designate buckets for money and you are loathe to touch them, even when it means not getting your kids ice cream or haircuts.

Tomorrow, pull $36k out of the emergency fund and put it into your checking account. Walla. Things don't feel so tight anymore. And you still have $314k just in case.

Yes, that is exactly what I do. I understand what you are saying. But is this truly an emergency? And yes the options are losing money. I look every day to see if today is a better day. It is not.

Me again.

You labeled the "emergency fund" bucket. That money is not special. It is just money,same as the money in your checking account and the money in your couch cushions.

Move $36k from the "emergency" bucket to the "ok to use for haircuts" bucket, whatever you call that.

Call it an emergency if that gives you permission to touch it. But that's just semantics.

[Anonymous]

350k liquid is not tight. I applaud you for not touching it though, I suspect that is how you accumulated it in the first place.

[Anonymous]

You have $350k in an emergency fund, you save, apart from 401k contributions, $1500 per month, and you're claiming that you can't buy your kids ice cream ort get them haircuts?

Are you flying them to Los Angeles for the haircuts? Going to Buenos Aires for the ice cream?

Words fail me.

[Anonymous]

You could take $50k out of your emergency fund and be fine. You seem to have really good saving habits, but lets get real. You do not have a lack of money right now. You have plenty of money. It's often harder to save when kids are in daycare. Cut yourself a little slack for the next couple of years then resume where you were.

[Anonymous]

OP we are the same. If money is in savings ity cannot be touched.

[Anonymous]

Oh for heaven's sake. If you have $350K in emergency savings and are saving as much as you indicate for retirement and college, you do not have an actual financial problem. Was this just a veiled brag?

[Anonymous]

It's all relative I guess -- OP I can understand not wanting to touch savings because where is the line/it can be a slippery slope of taking money out of such an account. Certainly your prudence with the savings is what has gotten you to be able to save so much.

With that said, "not being able to pay for daily/monthly costs that are occurring" is emergent enough for me to take some out of the 350K. What, when you created that bucket, did you consider as possible/"acceptable" emergencies for its use? 350K is a wonderful amount of savings, and you can continue to add to it later when not so tight in expenses.

Go this weekend and buy your dear children a big ice cream, with sprinkles.

[Anonymous]

So to translate:

You are saving $17K each into 401K, plus employer matches, so thats about $45K a year.
You are putting away $1500 a month into savings, so thats another $18K a year.
Plus the $15K a year into 529.
Plus presumably, $5K to $10K a year in mortgage debt reduction
With at least $350K in investments (If this is your emergency fund, then whats your investment fund? $1M? $2M?) growing at 6% a year or so...

That means that in a normal year, you save $70 to $80,000 a year in savings.
You probably reduce your debt load by $10K a year.
You likely gain at least $20K or $30K a year in investment income.

So, your net worth is growing by at least $120K a year.

Dont sweat the next two years honey.

I have $1.2 to $1.3M ... saving every penny and being careful. It became very stressful for me to worry about the little expenses. I just decided "screw it, im young, i make good money, ill make more later, im going to stop hitting $100K a year in net worth, and I'm going to aim for $75K." Since I did that, my stress has melted away.

Simple solution here sweetie. Really simple.

[Anonymous]

Anonymous wrote:Oh for heaven's sake. If you have $350K in emergency savings and are saving as much as you indicate for retirement and college, you do not have an actual financial problem. Was this just a veiled brag?

I know, right?! OP, I thought you meant actual financial trouble, like rotating which bills you pay late because you don't have enough money to pay them all on time. True poverty is not having any other options. If I had $350K in an emergency fund, I would sleep so much better at night.