Saturday, November 18, 2017

Rain Drop Funds

Many money bloggers use the word snowflakes to call the little bits of money they save or accumulate on the side in order to put towards debt. I've not read much directly from financial planner Dave Ramsey, but my understanding is snowflakes are part of the bigger savings plan to pay off debt, by snowballing efforts on either the largest debt, or the largest interest debt. After living very tight financially in our early years of marriage, when we finally started to have more favorable means, we didn't rush out and spend to our new income levels, thus not accruing unaffordable consumer debt. More than a decade ago we decided to throw a chunk of personal savings and a bit of money DH received after his grandmother passed away and payed off our mortgage.

We have a 0% interest loan on my car, which could be paid off at any time should we want as there is enough in a side savings we set up when we finished paying off a different car. We just kept making payments to ourselves, and continued to do so even after buying the new car two years later. We used that fund to buy a car for DD2 to use, straight cash, after DH came across a brand new small car that through his layering perks and discounts, was able to get for about the same cost as an equivalent five year old car. DH has a lease car through work. Others may disagree with our car budget, but for us, with me commuting 300 miles a week on both freeway, and isolated roads, the peace of mind is worth it. Plus having cars available for our kids to use when they launch out of college is a gift we can afford to give them as one less worry when they started completely on their own. While the older kids did not have new cars to use, both got years out of the cars we passed on until they became unaffordable to drive, saving needed cash flow at the time.

So this is a long back drop story to why we don't really have the need to put snowflake savings towards snowballing debt. We have been extremely fortunate, some through just luck of being in families that elders had put away a bit of money. We've been fortunate to mostly have good jobs, with a few blips in the road with unemployment. In hindsight, those blips probably helped ground us to not spend to our supposed means. This is why for the extras in life, I like to have other pots of money, rain drops for rainy days, that we can tap into without derailing  savings that is intended for retirement and college. The car account is one of those. Continuing to pay ourselves was one way, even after buying the new car, that our cash flow stayed the same with increased earnings, but also did the set aside bank account.

I've been much more deliberate about using credit card and store perks and gift cards, particularly when there are bonus dollars attached, the same as cash, using them towards items or activities I would have spent money on anyway. As of today, I have $215 in gift cards and store perks. These will help in December when we have extra people in the house and to put towards remaining Christmas gifts.

$30 in Kohl's cash 
$25 Kohl's gift card from Mother's Day as for new sheets for cabin, but I ended up getting them elsewhere)(
$15 Target cards
$50 Bar and Grill from last year
$25 balance on movie card from last year
$20 on two different Caribou Coffee cards
$25 Green Mill card from ages ago for coaching
$25 McDonald card that I can't even remember what it was for

I've also started to count and measure the little extra earnings in this way. I've earned $50 reffing volleyball a few nights, and am committed to four more before the end of the year, so another $120 in rain drop money. Well, it covers a few beers out with the girls at least. I helped at a couple fundraisers for choir that will put $50 in DD2's account, which means it won't come out of our bank account. It's not a lot, but every bit helps in not feeling too stretched at the end of the year. I'm a newbie to this snowflake and rain drop game. If others have had great success, let me hear about it. If you blog about your efforts, feel free to include your blog link. No one knows when a little rain in life will fall.

14 comments:

  1. I try to put: work reimbursements & rebates in our "extra" savings account. Unless I've somehow charged the hotel expense on my personal card accidentally this go round. I was able to get a lot of gift cards this year by maximizing travel rewards, and we've gotten a $500 rebate for our electric car + a $125 rebate for our automatic sprinkler system (energy efficient).

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    1. Forgot to add, I think it's smart to plan to spend extra when you're with family in town. It's definitely our peak spend as well. If I really plan the menu well, it's fun & we enjoy eating at the house. But, we also plan a few special meals out as well.

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    2. Last year I spent so much more than I thought we would, but nothing extravagant, just a few meals and rinks out, some special food and drink at home, more movies. I think I have a nice plan this year, and will feel free and guilt free for everyone to participate and have a good holiday.

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  2. I remember reading Dave Ramsey's book and I just LOVED it. It was so detailed and so inspiring and basically "if you can't pay cash for it you can't have it". I also, incidentally loved Moneysavingmom's blog. She had some great articles (and I still use the envelope system!!!). I stopped reading when it became all about "you can get a 2 dollar coupon for this and 1 dollar for that" because I'm not in the US but, again, she made great sense. My ex was diagnosed bi-polar (manic depressive) and one of the symptoms is extreme spending spurts. (Bought himself a 60,000 dollar car one day on a whim). We divorced because he ran off but he was also violent. That being said, we had damned good incomes between the two of us (and no savings, just plenty of debt). After he left and on just half the income, I am slamming down my mortgage, still going on holidays and have been able to buy one kid a car (he makes less than the minimum wage as an apprentice) and paid a large sum towards the other kid's wedding. All my pleasure to do. So my biggest money saving tip for me had to be getting rid of the ex. Sad but true. Anna

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    1. I have to admit, with the exception of his little shopping trips, DH is as thrifty as I am, but also not shy to spend when it matters. I'm sorry you had to experience that, but how wonderful for you and your children that you were stronger than the circumstances.

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  3. We are in a similar situation - nothing to pay off. Zero long term debt so no snowflakes but I do have little funds. Other than travel/christmas/household appliance/medical-dental-vision which is where most of my paychecks go I have a weekends away fund. We can also spend it on whatever we want if a weekend away is not doable. This is where I am putting my ebates.ca money, and also any money from reselling things (old records and vintage christmas ornaments) and selling household items we no longer need. After draining it in August it already has over $100 in it that did not come from our paychecks. Separate from that I use all our grocery store points for Christmas groceries and gifts, I am in fact doing a redemption this weekend to help stock the fridge for the next six weeks :) My Mom has a saying "every little bit helps" which basically means every penny counts and shouldn't be frittered away.

    With your hubby in the car industry it is important that he drive the current thing so I completely understand why you lease. We have two cars, one which is like hubby, the face of the business and one which is an old truck which I drive to the thrift store and we haul kayaks. We try and save up for those although we could technically lease and write it off at this point in time I would rather just pay ourselves more out of the company

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    1. You are right about the cars and my husband. I look at it as part of his business expense, which I have as well in other forms.I feel really comfortable about how I am approaching the holidays financially. It is moderate, but not Scrooge like. I'm saving where I can, and splurging a bit when the experience merits it. Your mom is wise-every little bit does help.

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  4. I was able to pay off both our truck and car early with little bis of this and that. I am a firm believer in snowflakes as they call them.

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    1. good for you. The volleyball reffing makes a huge dent in end of year fun with my family, or will cover the two nights of hotel, just about, for our road trip the end of January to see DD2 perform.

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  5. I just went through my gift card box and recalculated what's in there. $1700+ in gift cards. At least $275 of those are earmarked for either Xmas gifts are for purchasing Xmas gifts. Some are older and I need to get out there and use them up! Thanks for the reminder.

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    1. Wow, that's an impressive bunch of gift cards to have. Lucky you. Anna

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    2. Are these part of the ones that you pre-purchase at reduced cost, or have bundled with Rite Aid? You are the master at that, Sluggy.

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  6. I have never heard the word snowflake used that way.

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    1. I hadn't either before reading some of the blogs, and then it was explained to me last year.

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