Mallow and Sandi,
Good questions. I appreciate the feedback.
We have a larger emergency fund because we have real estate investments (4) plus our primary home. As the real estate market has deflated in Florida (3 of our investments are in Fla.) we have bumped up our emergency fund because the chances of having an empty unit (all 3 are currently rented, 2 are covering the carrying costs plus a bit of profit and 1 is just covering the carrying costs) have increased. Having 3 rental units (the 4th investment property is just land) also increases the emergency opportunities. Earlier this year we had a $1700 A/C replacement at one property, we also had $800 termite tenting at another property, etc. The $1700 A/C came out of the emergency fund.
So you've had $2500 in property expenses. Can't you make "property upkeep fund" a sub-account, and set a reasonable limit? I read somewhere that repairs on the average place cost ~ 2 months mortgage payments annually. So what if, once you reach that amount, you then start funneling the savings into retirement?
The e/r fund continues to grow because I also use it for our car insurance escrow (I generally don't pull that money back out) and my pay myself first savings. I've been shopping around for higher interest rates (thinking about a CD ladder) for about half of the e/r fund to increase our return.
Yes, that makes sense.
The car. I want a nused car. But, my paid for car continues to chug along (knock on wood) okay so we are not in a huge rush to make that purchase. And the more money I see in the car account the less excited I am about spending it. What I don't want to be doing is paying for an expensive repair when I think the car is worth about $3000 for trade in value. If an expensive repair comes up, the nused car will change from a want to a need.
You've already got $16K set aside for the car. Even if your car blew up tomorrow, you CAN'T tell me that you can't find a reasonable used car for $16K. Why not sell the used car now, and add in what you get in a sale price into the car savings? That would give you $19K to buy with. The advantage? You're CHOOSING WHEN TO BUY - so it's NOT a need, as it would be if you waited for the car to go belly-up entirely (and possibly inconveniently). If you start looking now, you're much more likely to buy smartly, rather than in a panic because you need transport TOMORROW.
Retirement. We are also putting money into our 401ks which is not reflected in our 2008 savings goals. Fully funding 2008 IRAs ($10,000) is last on our 2008 goal list because that goal can carry into 2009 (up to 4/15/09). Fully funding 2007 IRAs was a 2008 goal (we maxed out our 401ks in 2007 - $31,000) but we only put $4000 into my IRA by the time 4/15/08 rolled around.
Additional thoughts or suggestions welcome.
And this is why I think it's time to stop with the car savings. You have a very real possibility of NOT maxxing out your 2008 IRA, just like you did with 2007. And that's a bonehead mistake, especially with a robust EF and cash on hand for a car.