Where to put money for car/house expenses

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jehovasfitness
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Where to put money for car/house expenses

Post by jehovasfitness » Mon Feb 12, 2018 9:41 am

This is likely trivial, but where do you put money that you plan to set aside for a car replacement fund and/or house repairs?

Do you just let it stay in checking or put it into higher yield savings since they're funds you won't need immediate access to?

Do you have it automatically sent from your paycheck to a special savings account, or do you just move the money yourself?

From the mental aspect it seems better to have it out of sight out of mind in savings account. I was thinking of just putting it into the emergency fund account since that would provide higher yields.

lostdog
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Re: Where to put money for car/house expenses

Post by lostdog » Mon Feb 12, 2018 9:45 am

We put it in the prime money market at Vanguard. I combine the short term money and emergency money and just call it all short term money to keep it simple.
100% Vanguard Total World Equity Index. Simplicity 100%.

Jags4186
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Re: Where to put money for car/house expenses

Post by Jags4186 » Mon Feb 12, 2018 9:49 am

I guess it depends on how much money you're talking about. Most planned home repairs/car replacements should be saved up for in less than a year so I would just let it accumulate in a savings account. It helps if you don't have expensive taste. For example a replacement car for me might cost $20,000. Say my current car is worth $5000 that gives me a year to save up $1250/mo for a year which fits in my budget. Same with a house repair--whats the biggest ticket maintenance item? The roof? $9,000 or so every 25 years? The year you want to replace it set aside $750/mo and replace it.

annielouise
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Re: Where to put money for car/house expenses

Post by annielouise » Mon Feb 12, 2018 9:53 am

1.5% online savings account. Car fund is currently in a 2% 12 month CD, because we are a few years away from buying again.

I move the money myself. Our expenses are extremely variable throughout the year (we pay a lot of bills yearly rather than monthly), so a regular transfer would probably not work as well.

jehovasfitness
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Re: Where to put money for car/house expenses

Post by jehovasfitness » Mon Feb 12, 2018 10:02 am

I was just going to factor in $400/mo for house repairs based upon the 1% of house cost on a yearly basis.

Also, our main car likely has about 5 yrs left if I had to guess, so was gonna start setting aside now each month

mega317
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Re: Where to put money for car/house expenses

Post by mega317 » Mon Feb 12, 2018 10:02 am

VTSAX/VTIAX whichever is underweight.

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yukonjack
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Re: Where to put money for car/house expenses

Post by yukonjack » Mon Feb 12, 2018 10:10 am

lostdog wrote:
Mon Feb 12, 2018 9:45 am
We put it in the prime money market at Vanguard. I combine the short term money and emergency money and just call it all short term money to keep it simple.
+1. Sounds like both the auto and house expenses are well into the future so I wouldn’t worry too much about them now. Just invest most of your money in a taxable account and set aside a comfortable amount in your emergency fund if you have one.

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lthenderson
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Re: Where to put money for car/house expenses

Post by lthenderson » Mon Feb 12, 2018 10:20 am

Since we tend to drive cars until they stop driving and most most of our house expenses are unforseen (i.e. the water heater springs a leak), we just keep the money in our emergency fund. I like to keep between a year and 18 months of expenses in my emergency fund so if we need a car or a major repair for our house, we just take it out of there and then build it back up again. This is in a plain savings account. For planned housing expenses, we generally have enough foresight to save up enough money ahead of time from our regular income.

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Toons
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Re: Where to put money for car/house expenses

Post by Toons » Mon Feb 12, 2018 10:22 am

Capital One 360 Money Market.
Transfer it to checking if needed ,
which I did last week for a car.
:happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

Nate79
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Re: Where to put money for car/house expenses

Post by Nate79 » Mon Feb 12, 2018 11:03 am

All extra money gets piled into TSM or S&P500 fund above our 6 month emergency fund (cash/I-bonds/short term bonds). We do not have a specific car fund, just a big pile that keeps building.

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climber2020
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Re: Where to put money for car/house expenses

Post by climber2020 » Mon Feb 12, 2018 11:07 am

Haven't had to do this yet, but the plan is to keep the money invested in my taxable account in either Total Stock or Total International. If I need to withdraw a large amount, I'll sell the lots with the most favorable tax consequences.

If this happens during a time when stocks are down, I'll sell an equivalent dollar amount of bonds in my 401k and transfer it to stocks so that my overall stock shares are unchanged and I don't sell when stocks are low.

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