Budgeting For Savings

One thing I’ve been struggling with as of late is how exactly to budget for savings. My emergency fund currently stands at $70, enough to avoid any unexpected overdrafts or the like, but that’s pretty much. I’ve settled on a good base of 3 months that I want to save up for right off the bat – Dave Ramsey’s $1000 won’t go far if I lose my job (especially considering how paltry my unemployment benefits were). This comes to $2500.

I’m also planning on building a new computer. The parts I selected will cost an estimated $700, so I’m budgeting $800 for the build. It’s something that I’m really, really excited for, but is also approaching the point of it’s own little emergency (in my mind anyway). My current laptop is a 4 year old, sluggish, wildly overheating bastard of a thing that really, really needs replaced, badly. Building a new box is also an investment in the future, of sorts, as boxes are easily upgradeable, rather than having to replace them every few years for the latest hardware (as is the case with laptops).

The real question is how to prioritize and budget for these two savings goals. Throwing them into my spreadsheets as debts results in a new computer in September, but the emergency fund being pretty empty until February through June of next year. I’ve tried budgeting them in smaller amounts into my paycheck allocation shedule (the awesome name I gave my budget), but that also ends up long and drawn out.

I’m realizing that my real problem here is the desire not to knock out a bunch of debts and attain savings goals all at once, because it’s long, drawn out, and BORING. I want to be able to tackle one at a time, and instantly see huge leaps in progress. To be perfectly honest, I’m completely fine with that, because I know that’s how I am – it’s in my personality. Hell, if I could, I’d stop making all my regular monthly payments and apply my big chunk of change to only one debt at a time.

I’m also looking in to using the avalanche method instead (highest interest first, that being Capital One and it’s awesome 23% default rate that I’m assuming I’m being charged), which would save me over $5,000 in interest over the next 5 years. Hell, I’ve even toyed with spreading my snowball evenly across all debts equally. And proportionally (which would theoretically result in everything being paid off all at once, 5 years from now).

The other thing that irks me is how long it’ll take me to get rid of my personal debts (Comcast, my sister, Met-Ed, my landlord, my investor) and start paying on real loans.

I am a terribly impatient, indecisive person, and I suspect that constantly playing with the numbers while waiting for the next paycheck is driving me mad. On top of growing increasingly depressed from the rampant singleness.

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