Budget for 2011

Starting in February, Hubby and I are going to switch to a new budget. So far we've just been splitting our "extra" money, using about half to pay down credit cards and the other half to stash in emergency savings.

With our new budget, we're going to set aside money for several short-term savings goals, as well as to regularly save for non-monthly bills (like car insurance). It means hitting pause on the emergency fund, but overall it should be a better system.

Here are our anticipated categories & savings amounts, per month:

Vacation - $200

Car insurance - $210

House (maintenance/repairs) - $300

Mortgage (principal reduction) - $800

It's great to have so much "discretionary" income in our budget, it really makes it so much less stressful to know that we have a bit of a cushion to absorb unexpected items. Our immediate goals are to finish paying off credit cards (currently around $7k) and then to pay off the second mortgage. However, it'll probably take about 3 years.