Coastal Reflections

Freedom Accounts

One of my roles here on the homestead is that of accountant (you know - bill paying, balancing the checkbook, keeping track of expenses, budgeting, preparing the taxes, etc.).  I know some believe this role should be the man's, but we decided it made much more sense for me to be the responsible party in our household since I hold an accounting degree, I enjoy the tasks, and I'm passionate about frugality. 

One thing I have set up for us that is a tremendous help is a freedom account.  I basically wrote down the expenses we have throughout the year that don't occur every month, the $ amount, and how often they are paid.  I choose to add to our freedom account every other paycheck.  Dh is paid every 2 weeks so that's 26 times a year.  Divide that by 2 and the result is 13 paychecks that are used for funding the freedom account.

Some of the categories I have in ours are...

* Insurance (examples in this category could be life insurance, cancer policies, etc.)

* Auto insurance

* Homeschool (I use this for purchasing curricula, field trips, supplies, etc.)

* Pet expenses (yearly exams, yearly licensing fees required by our county, heartworm preventative, etc. - I do not include food in this as it is a monthly expense for us)

* Christmas/Birthdays (and I allow enough that we can purchase other gifts out of this as necessary such as wedding presents, etc.)

* Vacation

* Hair cuts (wish I could do these myself and save us the expense!)

* Optical (contact lens, saline, glasses, exams, etc.)

* Clothing & Shoes

* Professional dues & licensing fees (pertaining to dh's work)

* Auto tags

and so on.  You get the idea.  If your mortgage lender does not require escrow, certainly include homeowner's insurance and property taxes in your freedom account as well. 

I have a notebook that I keep track of all of this in.  Each category has its own page and additions and expenditures are noted in a running tally.  It's so easy to set up, takes just a few minutes of time to update as needed, and provides such a feeling of peace and relief when one of these expenses comes due and the money is sitting there already waiting.

Untitled Comment

02:46, 2006-Jun-23 .. Posted by Carol

I for one know how frugal you are and how you can stretch that dollar. I'm always amazed at what you do Kim. Great job on having a freedom account.
~carol