5 Savings Funds Every Family Budget Needs

Sarah Brumley

Sarah Brumley

If you want a family budget that helps you achieve your debt payoff goals, increase your savings, and just plain feel more freedom financially, then you won’t want to miss today’s episode. We’re chatting about five savings funds every family budget should have in order to be successful long-term. Sound like a plan? Well then, let’s get started.

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5 Savings Funds Every Family Budget Needs

Well hey there and welcome to the Financial Fix Up Podcast. I’m your host, Sarah Brumley, and if you’re listening to this in real time, it’s the end of May and I don’t know about you, but I am absolutely baffled by how quickly this year is passing us by. I mean, I’m definitely appreciating the warmer weather and I’m looking forward to summer break, taking a vacation, and just enjoying time with my family for a couple of months, but how are we nearly halfway through 2024?

Of course, we can’t keep the time from passing, but we can use it wisely, and that’s why I want to spend some time talking about savings funds today, and specifically five funds that I believe should be part of every successful family budget. Are there more? Sure, you can definitely add more, but these five are ones that can make or break your financial success, at least that’s been my experience.

So, without further ado, let’s get that budget in tip top shape for the summer months and beyond.

What is a Savings Fund?

But before we jump into the savings funds themselves, I think it’s probably a good idea for us to discuss what a savings fund actually is. Put simply, a savings fund is money that you set aside for a specific purpose. Of course, we’re all aware of emergency funds and what those look like – and if you aren’t, you’ll definitely want to listen to episode #6 all about that topic – I’ll link to that in the show notes, but when I talk about savings funds in this instance, I’m referring to a more specific category that you add money to on a monthly basis. It allows you to keep your monthly budget consistent, while also planning ahead for bigger expenses that might come seasonally, annually or may just be inconsistent overall.

So, typically you’ll estimate what you would need yearly in that category and then split that up by 12 months or however many pay periods you have. Then you’re not stuck with a large and, slightly unexpected bill, that could derail your entire monthly budget. See? Pretty simple, right?

But it all comes down to know which savings funds you need. So I’m going to share the five I highly recommend in no particular order. Often these get missed and can sink a budget by either having you put the expense on a credit card or drain your emergency fund to account for them. We don’t want that. So, include these ASAP.

Savings Fund #1: Household Maintenance

The first savings fund I recommend is a household maintenance fund. I like to think of this fund less of an emergency-type situation and more of an ongoing maintenance fund. Things like minor repairs, seasonal expenses like tree trimming or sprinkler replacement, light bulb replacements, HVAC inspections, among other things. It’s things that aren’t emergencies necessarily, but need to be maintained throughout the course of the year.

And it might be hard to know how much to put in this fund each month, but every little bit can help offset this type of cost and keep you from placing these expenses on credit or depleting your emergency fund that’s meant for true emergencies.

When we first started with this category, I spent time going back through the previous 12 months of our bank statements and noting how much we spent at the local hardware store and for anything I could immediately recognize as a household expense. I then took that total amount and divided it by the 12 pay periods we have in a year so that I’d know about how much to add to that savings fund each month. Of course, if that amount is more than you can come up with out of each pay period, then you might want to start smaller and work your way up. Just remember that you might need to postpone some maintenance items until you have the funds to spend.

Savings Fund #2: Medical Expenses

The second savings fund I believe to be critical for families is a medical expenses fund. Sure, if you have a major emergency, your emergency fund might help, but what about those pesky co-pays, prescription costs, or the random bill that you receive from the dentist? The last thing you want to do is dip into your emergency fund each time one of those comes along, so what better way to set yourself up for success than to put a little money aside each month for that very purpose, knowing that some months you might have more expenses in this category than others.

I chose to aim for our yearly individual deductible for this category on the off chance that one of us has a major medical crisis. For us, that’s $750 total, which means that I set aside about $60 each month. Some months we don’t need that money at all so it accrues in the savings fund, but on months that we receive a bill, I can deduct it directly from that fund without worrying about messing up the rest of the budget.

Savings Fund #3: School Year Expenses

The third fund I recommend, especially for those with school-aged kids is a school year expenses fund. Of course, when we think about school expenses, our minds immediately go to those back-to-school supplies and clothing expenses, but I’d also like to challenge you to consider things like the holiday parties, Valentine’s Day cards, teacher gifts, and anything else that might come up throughout the school year. Will your kiddo likely need new pencils in January? Will he or she have outgrown their PE shoes? These are all expenses that could feel inconvenient in the moment unless you have a plan in place. That plan: a school year savings fund.

I’d recommend thinking through each month of the year and estimating how much you’ll need to spend based on activities or past history. Then, take the total amount and divide it by the total amount of paychecks you might have over the course of the year and use that to determine how much you’ll contribute each pay period.

The key here is not to get bogged down in the details. Even if you can’t contribute much to this savings fund, every little bit will help when your kiddo comes home from school to tell you they volunteered to bring paper plates to the upcoming class party. You can check your fund, see that you have $5 available and hunt for some inexpensive paper plates for your kiddo to take with them – along with a reminder not to volunteer without running it by you first in the future. Right?

But seriously, this fund has saved us so much stress and frustration over the years, so I highly recommend it.

Savings Fund #4: Pet Expenses

A saving fund that’s necessary for all pet-loving families is a pet expenses fund. Much like the school year fund, a pet fund is necessary to accommodate for expenses that could come up throughout the year.

We have cats, so in our case, the fund accommodates:

  • Cat food (that we purchase every other month)
  • Prescriptions
  • Vet bills
  • Flea and tick deterrent
  • Litter

…and any other random cat expenses.

Of course, if you have to board your animal for an upcoming vacation, have nails trimmed, or any other random expenses, you’ll want to include those, too. Remember: YOU WILL have these expenses, so why not spend some time to plan ahead for them now. Then, when they come up, you won’t be left scrambling for how to pay for them.

Once again, take the total amount you’d spend over the course of the year – it might be a shocking amount – and then divide by the number of pay periods. That’s the number to contribute to your pet savings fund each and every pay period.

Savings Fund #5: Holiday and Birthday Expenses

The final savings fund I recommend is a holiday and birthday expense fund. And, really this could be two funds – mine are, but you can lump them together as one if that helps to simplify things for you. Personally, I make a list of everyone that I’m going to give a Christmas or birthday gift to and then assign an amount I feel comfortable with. Add that up for the entire year and – you know where I’m going with this, right? – divide the total amount by the total amount of pay periods over the year.

You could also include any parties you plan to host, but don’t overcomplicate it, okay.

I’ll probably do an entire episode on this coming up soon so that we can ahead of the holiday rush, so if that’s something you’re interested in, please tag me on instagram at lemonblessings and let me know, but ultimately, like all of the funds we’ve talked about, this one will really help you stay on track with your financial goals and prevent the need for overspending or credit card use when the holidays come up or that birthday is on the horizon.

So, definitely something to implement.

Which Savings Funds Do You Need?

Alrighty, so let’s do a quick recap. The savings funds we definitely should have (beyond the emergency fund) include:

  • Household maintenance
  • Medical expenses
  • School year expenses
  • Pet expenses
  • Holiday and birthday expenses

Now if this feels overwhelming to put all of these in place right this moment, I challenge you to choose at least one of these to implement. Then, when you’ve got that under control, come back and add the rest. The more you can create a consistent budget from month to month, the easier it’s going to be to get out of debt, increase your savings, and the sooner you’ll feel more freedom financially.

And if you want to set up a budget that really works for you, but you aren’t sure where to start, then grab my FREE Family Budgeting Worksheet. You can find it at lemonblessings.com/family-budget or click the link in the show notes.

Whatever you decide, just know that I’m cheering you on! You’ve got this! Have an amazing day and I’ll chat with you again next time!

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