Today I am going to write about a topic I have never written about before: personal finance. I am writing about this not so much for you, faithful reader, as for my kids.
Loved this! We've taken this approach with a few future costs (e.g., replacing a car in 5 years), but not with others (replacing flooring). I enjoyed learning from this set of experiences, and it serves as a great conversation starter to review our budget and future forecasting.
This is awesome, thank you for sharing. My husband and I built a budgeting app together and included sinking fund categories so we can see what future purchases we’re saving for each month. Keeping sinking funds in mind has really helped us plan for our future!
Did this to survive a tax problem many years ago. Kept doing it when the problem was solved, and it changed my life as well -- control, peace, visibility, early retirement, and ultimately sustainable wealth. Thanks for putting it in words.
Add a “Goalkeeper” to your savings account for each of these future expenses. Start this early with your kids and the habit will be engrained. Peace of mind managing money is one of the great gifts you can give your children. They will be empowered to make better choices when they know they have organized where they spend. This before investing.
I’ve lived by sinking funds since 21. I think it’s the reason I’ve avoided debt. Another approach that has served well is putting annual/routine rises into your budget immediately, but put promotion rises straight into investments.
Great article. One thing I consistently note is that growing up in an Indian household and now living in the US, somehow, we never needed to learn to save. It is something that every Indian has in their blood - to some degree. Also, spirituality runs in the Indian culture so deeply that fancy things lose their value very quickly post-mid-30s. To some degree, this budgeting work is not required because of the mindset that I grew up with. Only when I came to America, did I realize people do impulsive buying? It was a revelation to me :)
"My four- and twelve-year-old girls are probably too young for this discussion, but my eighteen-year-old son, Jonah, is right on the cusp of needing to learn about it."
You have left it too late - many of his habits will have already been formed.
Much better to have started at 12. A 12 year old will be far more receptive to advice and will not have formed any spending habits yet.
Very much enjoyed this as an engaged mother of 3 in our blended family. We have a TON of variables within our individual budgets that we will be merging into one. Thank you for sharing this insightful and easy read.
You can forecast based on car make performance data at certain mileages and then track that back to your personal mileage coverage per year. This will tell you at what mileage the make of your car will start requiring major repairs & part replacements (manufacturers also share this data). Now forecast how quickly you’re going to get to that point based on your travel stats. On car value, like any other asset you can forecast anticipated depreciation over time. This is basically what company acccountants do, you just need to apply the same practices to your personal finances and assets. Hope this helps.
Loved this! We've taken this approach with a few future costs (e.g., replacing a car in 5 years), but not with others (replacing flooring). I enjoyed learning from this set of experiences, and it serves as a great conversation starter to review our budget and future forecasting.
This is awesome, thank you for sharing. My husband and I built a budgeting app together and included sinking fund categories so we can see what future purchases we’re saving for each month. Keeping sinking funds in mind has really helped us plan for our future!
Is it on the App Store?
Yes! https://apps.apple.com/us/app/accountable-budgeting/id1542898267
Android version coming soon.
Did this to survive a tax problem many years ago. Kept doing it when the problem was solved, and it changed my life as well -- control, peace, visibility, early retirement, and ultimately sustainable wealth. Thanks for putting it in words.
Add a “Goalkeeper” to your savings account for each of these future expenses. Start this early with your kids and the habit will be engrained. Peace of mind managing money is one of the great gifts you can give your children. They will be empowered to make better choices when they know they have organized where they spend. This before investing.
I’ve lived by sinking funds since 21. I think it’s the reason I’ve avoided debt. Another approach that has served well is putting annual/routine rises into your budget immediately, but put promotion rises straight into investments.
“Health, experiences, time, and education”
Right on. Great read.
The thumbnail looks like my banking dashboard.
The sinking fund advice is great, but I really loved learning about Berlioz! Thank you for sharing!
Great article. One thing I consistently note is that growing up in an Indian household and now living in the US, somehow, we never needed to learn to save. It is something that every Indian has in their blood - to some degree. Also, spirituality runs in the Indian culture so deeply that fancy things lose their value very quickly post-mid-30s. To some degree, this budgeting work is not required because of the mindset that I grew up with. Only when I came to America, did I realize people do impulsive buying? It was a revelation to me :)
So wise. Thanks for sharing!
"My four- and twelve-year-old girls are probably too young for this discussion, but my eighteen-year-old son, Jonah, is right on the cusp of needing to learn about it."
You have left it too late - many of his habits will have already been formed.
Much better to have started at 12. A 12 year old will be far more receptive to advice and will not have formed any spending habits yet.
Very much enjoyed this as an engaged mother of 3 in our blended family. We have a TON of variables within our individual budgets that we will be merging into one. Thank you for sharing this insightful and easy read.
Where can I find one of these machines that spew money out like that 😂
how would u know in 5 years you will need a car, and how would you know your current car will be worth 5k
You can forecast based on car make performance data at certain mileages and then track that back to your personal mileage coverage per year. This will tell you at what mileage the make of your car will start requiring major repairs & part replacements (manufacturers also share this data). Now forecast how quickly you’re going to get to that point based on your travel stats. On car value, like any other asset you can forecast anticipated depreciation over time. This is basically what company acccountants do, you just need to apply the same practices to your personal finances and assets. Hope this helps.
It’s simplier than this.
If you need to pay for it: it’s not education, is clasifying.
Loved the article.
Ended up creating an easy web app, with the idea of sinking funds. Nothing fancy.
Would love to know what people think
https://bplan.netlify.app/