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New User. Best way to set up slush funds?

Becca H

Hi,
I am trying to set this up and get it working best for me. What is the best way to set up a slush fund (I mean, a pile of cash set aside for something like a vet bill or a car repair, which I may or may not ever actually need to spend)?

What about a yearly bill?

Should I use a category in Planned Spend that I add to each month, or a savings goal?

Thanks

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Accepted answers

DryHeat

@Becca H

What is the best way to set up a slush fund

There are (at least) two ways to look at this.

Spending based: You just want to limit your monthly spending so you can absorb occasional surprises.
Funds based: You want to have an actual cash reserve held back to provide for whatever eventuality.

If all you want to do is limit your spending, then an Expense series (with rollover) in Planned Spend will do that. It will earmark whatever amount you choose every month and reduce the "Left this month" amount. BUT… it is limited to a particular category, which may be a deal breaker for you

If you want to be able to see where the cash reserve is, and how much it is, in your account listings then a Savings Goal is probably better. It performs the same spending limitation function as the Expense series, but it is not limited to a particular category. And (if you choose) the amount "set aside" can show up in the Account listing and reduce the apparently available amount. That makes the "slush fund" visible.

Personally, I would prefer to use Savings Goals for this purpose. They seems better designed for it. But if you search the discussions you will find that there have been some problems with SGs. I abandoned their use a while back, but they may be working better now. I don't know for sure.

All comments

SRC54

There are several ways you can do this. This is what I do.

We service our cars once per year and it varies how much it will cost as some years it needs brake work or different service types. So I use a reminder and I put in a cost, say $150 or $200. If it turns out just to be oil and filter, that's great!

When I think new tires are coming up, I put in a reminder for that, which is about $1000 since Alabama roads are full of holes and road hazards, so I buy the best tires I can get.

Every month, I look ahead and try to "budget" for these things. Of course, if the car just breaks down unexpectedly, what can you do but fix it "off budget". Then it's time for the One-Time Bill. At least, you hope it is one time.

DryHeat

@Becca H

What is the best way to set up a slush fund

There are (at least) two ways to look at this.

Spending based: You just want to limit your monthly spending so you can absorb occasional surprises.
Funds based: You want to have an actual cash reserve held back to provide for whatever eventuality.

KP_9

Welcome, @Becca H. Great suggestions by previous commenters. I personally like using Savings Goals for this type of slush saving, though as @DryHeat noted, the functionality's limited and hopefully due for a refresh soon.

For potential/known upcoming expenses, I create a Savings Goal to set aside the money for it. I use Goals to reserve money for everything from small expenses (emergency car repair, next year's auto insurance payment) to big ones that are many years away (a new roof). It helps me stay organized and refrain from spending because that money is no longer "available" in my mind, it's been allocated to something.

If the expense eventually materializes, no problem - you can either draw down slowly against the Goal if it requires over-time spending, or just delete it after a one-time expense - any unused funds return to the "Available To Save" bucket again to be repurposed elsewhere, and you simply spin up a new Goal for whatever's needed next. If not, the funds sit reserved in the various Goals indefinitely.

Happy saving!

DryHeat

@KP_9, @Becca H

One caveat about deleting Savings Goals … it can alter Spending Plan results for previous months. That may or may not be important to you. Some people are only concerned with the Spending Plan for the present and the future, but others like to look back at how things turned out in previous months.

Here's what happens. Deleting a Savings Goal deletes all records of contributions to that goal. So let's say you contributed $500 to a particular goal every month for the last 6 months, but then you delete that goal. When you look back at those months, the contributions to the goal will have disappeared. So the Spending Plan will show that you had $500 more "Left this month" (each month) than it showed previously. That can make sense in certain circumstances, but not in others.

KP_9

https://community.simplifimoney.com/discussion/comment/67144#Comment_67144

Good callout, @DryHeat, thanks for clarifying. I don't link any of my Savings Goals to the Spending Plan, so I'd never noticed this. For people who have them tied in, though, that's for sure a challenge. Hopefully Simplifi will add some type of Archive feature for Savings Goals soon to resolve.