Another budgeting Question: where should I save first?

[Abby5]

So I just was going over my budget.

And I have about $725 to use for savings every month.

I am just wondering how much to put in each category??

Right now I have:

Gifts/clothes:$75 (need $1100/yr)
Vacations:$100 (I need to know I can go on a vacation one day..or working sucks too much ) (need ??)
Car Savings: $200 ( my car is 11 yrs old and I am trying to squeeze everything out of him! But I know 4 years will be the very max ) (need about $30000)
RRSP/RESP:$250 + any money my ex decides to pay me from FRO ( need min. $5000/yr)
Emergency Fund:$100 (I figure I need $12000 in here)

What does everyone else do? Or where can /should I adjust ?

[sweet sparrow]

My first question would be about the car savings. Do you really need $30,000? You might be able to get three really good used cars for that price - probably four, but I'm leaving a bit of room for specifics in your criteria. If your car options were more flexible, I'm sure it would be much easier to meet your other goals.

[brwonsugal]

Although you can put money in an emergency fund until you're rich. You have to think of your priorites. For me, my job isn't that secure so I have 4 months living expenses (rent and bills not food) 4 month food stockpile and I'm not putting into that. My priorites right now is a vacation, so I would put more into that. It is specific to what you need/want right now.

I agree with sweet sparrow. $30 000 for a car seems like a LOT.

Maybe put some of that into your vacation fund so you can get out of the country sooner, then come back and save for a car.

[Abby5]

My first question would be about the car savings. Do you really need $30,000? You might be able to get three really good used cars for that price - probably four, but I'm leaving a bit of room for specifics in your criteria. If your car options were more flexible, I'm sure it would be much easier to meet your other goals.

I really want a new car and keep it for 12 years. I have only ever had used cars and really want a new one But maybe I am being unrealistic about what I want thanks for your in put

[momof5boys]

Personally, I would budget for giving as well....so many without even water and electricity....

[Abby5]

Personally, I would budget for giving as well....so many without even water and electricity....

Great point!!

[sweet sparrow]

I really want a new car and keep it for 12 years. I have only ever had used cars and really want a new one But maybe I am being unrealistic about what I want thanks for your in put

I totally get it. I had tons of friends and family members trying to talk me out of a used car, but I was pretty adamant that I wanted the money for something else.

OTOH, with something that depreciates so quickly, you can easily find a demo, or a car that's off lease with a single owner. We found a gently used car that had just over 4,000 km/year, only a few years old, cleaned throughout, and came with the dealership certification. It had a record of complete oil changes and regular servicing, plus, the price was half the cost of a new one. We knew we'd be running it into the ground (over 60,000 km/year) so we definitely weren’t going to spend more than what we had to on it.

There are places where you can get 0% financing, but I think the profit is quietly worked into the deal.

You don't have to give up your dream, but explore that option if you want to and see if there are any at a dealer near you that might be passable.

An extra $10,000 in your pocket buys a pretty darn nice vacation, let me tell you!! Or even an $8,000 vacation and a $2,000 donation to charity….

[Abby5]

Any more thoughts???

[tobiwobi]

Interesting thread! There is really no right or wrong answer here, and your original budget looks good to me.

I am going to say that 30,000 for a car is ok for you - you keep your cars for a long time, if you go with something used or cheaper, it may not last you 12 years. I also like to buy a decent car and drive it forever.

I don't see what I would move, other than the $75 for gifts/clothes a month. I find that I have accumulated so much stuff, so I stopped buying clothes. I don't need to buy something new every month, I have a whole bunch of new stuff in my closet already. I'm making an effort to actually wear it all.

[Abby5]

Interesting thread! There is really no right or wrong answer here, and your original budget looks good to me.

I am going to say that 30,000 for a car is ok for you - you keep your cars for a long time, if you go with something used or cheaper, it may not last you 12 years. I also like to buy a decent car and drive it forever.

I don't see what I would move, other than the $75 for gifts/clothes a month. I find that I have accumulated so much stuff, so I stopped buying clothes. I don't need to buy something new every month, I have a whole bunch of new stuff in my closet already. I'm making an effort to actually wear it all.

I have 2 teens and lots of gifts to buy through out the year. It is going to be hard to stick to this amount

[oddduck]

I'm going to ditto on the car thing. You could likely pick up a 1-2 year old car, with 30-40km on it for significantly less then the price of new.

My 2011 Ford Fusion (bought in Nov 2011) was easily $10,000 less then the price of a new car.

[wishmeaway]

Ouu savings is hard since there is so much to save for. Personally I stockpile/groupon on gifts for people so it generally does not cost me that much and clothes I have been finding almost everything I need at thrift stores. My savings budget a month is:
200 + RRSPs,
100 emergency savings,
100 into a housing fund (when I buy my place for lawyer fees and such),
$20-$40 into a Christmas fund cause I know I get a little crazy,
$40 gifts/clothes
$100 vacation
$50 charity
$50 + anything extra into a want fund for things like buying a new computer, or camera

[Brad]

I would put more money toward retirement savings, unless you work for the government and will retire with a nice government pension. If you're not using a TFSA you should use that in addition to the RRSP.

[carmanelectric]

One thing I would look at is making your money do double duty. The biggest thing is the emergency fund. Yes it is important to have it. But are you going to just let it sit in your savings account not really working for you, does it reeeeallly have to be 'that' liquidable. If you have it acting as a cashable investment. It may take a couple days to get at it, but it also removes the temptation to tap into it for ummm "lesser emergencies" But is still available if you really really need it. Make it work either as a money maker, a tax shelter, or as a portfolio or credit builder.

[Abby5]

Love all the ideas !! Thanks so much for sharing