Three Must Have Savings Funds

You are saving money right?

I’m in the camp that believes you should save money WHILE you’re paying down debt.

You are paying down debt right?

Outside of spending less than you earn, the best financial advice I can give is to create the following three savings funds.

These savings funds changed our lives and have been a huge part of our financial success over the last few years.

Savings Funds

1. Fixed Non-Monthly Expenses Fund

Use this fund to prepare for all the purchases you know will happen, but are not regular monthly bills.

Just write them all down, calculate their yearly cost, divide by 12, and add together. This final amount will be the amount you put into the fund each month.

Anytime one of the expenses comes due, just transfer the amount from the FNM Expenses account to your checking account and pay the bill.

For example, here’s our 2013 FNM Expenses list:

  1. Auto insurance (pay every six months to take advantage of the discount) = $1,000/yr
  2. Renters insurance = $250/yr
  3. CSA = $400/yr
  4. Bulk pastured beef = $600/yr
  5. Auto registration/plates = $150/yr
  6. Betsy’s continuing ed and pro license renewal = $275/yr
  7. Xbox live subscription = $50/yr
  8. Food coop membership = $50/yr

Total cost/year = $2,773 divided by 12 (months) = $232 per month.

So we created a separate savings account, named it FNM Expenses, set up a monthly auto draft for $232, and use this money whenever these expenses come due.

2. Auto Repair and Maintenance Fund

In this account you will save $100 per vehicle per month to pay for all vehicle maintenance and repair.

When you need tires, brakes, car washes, repairs, etc. – you’ll have the money.

You can play with the amounts to see what works best for you, but we’ve been using the $100/car/month plan for years and it seems to work perfect.

Note: All our vehicles are used, paid off, and no longer under warranty.

3. Next Auto Fund

This is the fund you’ll build up so you can pay cash for your next vehicle. Yes, cash!

We employed this strategy to pay cash for our last two vehicle purchases.

Here’s how it works: figure out what year, make, and model of car you want to save for, decide how many months in the future you want to purchase it, estimate its future purchase cost, and divide that amount by the number of months you have to save.

For example, here’s our savings plan for our next vehicle purchase:

  • we’re looking at a 2013 Ford Escape (or maybe a 2012 Honda CR-V EX)
  • planning our purchase for January of 2017 (48 months)
  • figuring a cost of around $12,000 at that time
  • $12,000/45=$250 per month

We set up another savings account called Next Auto Fund and auto-draft $250/month into it so we can pay cash when we go to buy.

We may make small adjustments to our goal along the way to ensure we’re on track, but the point is to plan and start saving ASAP.

Where we Save?

We save for short-term goals (FNM Expenses and Auto Repair and Maintenance) with our local credit union.

We save for long-term goals using Betterment. (Check out their $25 bonus for new accounts.)

Following these tips changed our lives.

And we think they’ll help change yours too, that’s why we’re sharing.

Do you plan to set up these or other targeted savings funds?


About Matt Jabs

Adventure. Stewardship. Purpose. You can also follow my financial insights on and my sustainable living adventures on


  1. We do this as well and it works great. Two other savings funds that we have are for “Gifts” and “Travel”. This way when Christmas comes we can afford to buy gifts with cash and when summer comes around we have money to travel. So far it has worked without a hitch.

    • Good call Deacon, we do those too and it’s just so much nicer to have that money set aside than to try and come up with it from who-knows-where.