Wednesday, May 15, 2013

Budget View-Part 4-The Freedom Account

Today is part 4 of my budget series. So far we have covered:

Today I would like to touch on The Freedom Account.
It is a bit of the Emergency Fund and a few other categories rolled into one.

I got this great idea from Kimberlee at The Peaceful Mom
Her blog has so many inspiring money saving & budgeting ideas. 
If you are a nerd like me, you could spend hours there! 
Her family of 6 lives on $28,000 a year (Click the link and check out her series on this subject.)!! 

I don't think living on $28,000 a year is for everyone, however you may just find one gem in a blog post that helps you manage your money a bit better like I did when I found her post about The Freedom Account(click this link to read all the details on how to start your own Freedom Account).
This is Kimberlee's system for managing regular and irregular expenses. It has really helped me maintain a successful budget from month to month.

There are a couple things I do differently:
#1- Kimberlee suggests having 2 checking accounts. I have a checking account and a savings account at the same bank so I can transfer money to and from each account with ease.
#2- I have my Emergency Fund listed as one of my Freedom Account categories.
#3- I use this account for all my irregular expenses. The categories I have listed right now are:
Emergency Fund, Car Maintenance & Tabs, Tires for Vehicles, Vacation, Garbage Pickup(every 3 months), Braces(Miss L gets them on this summer), Medical Expenses(co-pays & bills), and Christmas.

These are expenses that could break my budget if I didn't put away some money for each category with every paycheck. Realistically, I don't put away money every  paycheck but I do try to stick some money in my Freedom Account every month and disperse it evenly. 
I am working towards the point where I am disciplined enough to do it every 2 weeks.
Just remember your categories might be completely different than mine.

Just like My Emergency Fund, the Freedom Fund brings me complete peace of mind that I will not have to be a slave to credit card debt! 

I plan to show you my bill paying system in my next Budget View post. I know a lot of people use a computer program to keep track of their bills, but I find putting a pen to paper helps me to keep things organized better. Who knows maybe someday I will upgrade to a more technologically advanced system but for now, I'm keepin' it old school.

Enjoy your View~

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