Choices

Here are my choices for the $500 we'll have "extra" this month if no more of my appointments cancel. Since I'm trying out the zero-based budget system, this has to go towards something.

• Open a new ING account for the baby's educational expenses. This is for opportunities such as field trips, considering private schools, etc., not college. Right now this is not factored into my FSA accounts.
  
• Open a new ING account for a house down payment. This is a goal we need to start saving for now. Right now this is not factored into my FSA accounts.
  
• Put it in our FSA ING account in the "car emergency fund" which is for car repairs or replacement. Right now I'm putting in $3000/24, or about $125/month.
• Put it in my Roth IRA, which I have not contributed to since 7/07 due to upcoming maternity leave and knowing my business would fall back. This would almost make up for not putting in my $60/month in the meantime.
  
• Pay off $500 more towards Capital One which would reduce my monthly payment by another $15. I mentioned before that I realize at 0% APR this is not the loan to pay off first, however lowering my monthly payment frees up monthly cash and gives us some breathing room if we need it. We are still going to have the full amount we planned on paying automatically deducted each month and only change it if something happens. (I know, good intentions, right? That's why it's automatic.)
  
• Pay off $500 towards the BOA Gold Loan which has an APR of 15.99%. This will reduce the term by about a month and a half but not reduce the amount we pay each month.
• Put it into our FSA for next month, see if we need it, and then apply it to an above option if we don't.
• Put it into our FSA in the "unexpected expense" category.

This scenario may need to be for $1000; I haven't gotten my first due date for the Bank of America Gold Loan yet. The counselor on the phone said it would very likely be the beginning of June. If it's at the beginning of June, it's covered with next month's pay. If it's at the end of May, it's covered with this month's.

What is an FSA? Something new to me. It's a Freedom Savings Account. Basically instead of having my life insurance, which is $44 every three months, come out in one lump sum that we plan for four times a year, we're taking a third of that and putting it into our FSA account each month. Then when the $44 "hits" I withdraw the amount from FSA (which has meanwhile been earning 3% interest) and put it into the account the expense comes out of. We have this set up for all our expenses that happen every two years, annually, and several times a year.

I also have set up a vacation fund and emergency car fund. I want to have these fully funded in a certain amount of time. The down payment for a house should be automatic, as should the educational expenses, but in our zero-based budgeting system we don't have it every month. It depends on how many appointments I have (and cancellations), and whether or not the school renews my faculty option in August after this round of classes ends. It also depends on student loans that come due. Since my husband is due for a raise, possibly, this month, that will also affect it as well as the amount of payments that he needs to make.

We have our FSA through ING. It's just a savings account that we named "FSA". We also have one named "Emergency Savings".