I know what my wife and I are going to be wearing when we attend Star Wars Celebration V in August! 

Another good design sports the logo of the Hoth Blue Milk Brewing Company.

Only 107 days to go…

StarWars.com has posted an exciting preview video of what you can expect to see and do at Star Wars Celebration V.  Using a montage of clips from the previous United States Celebrations, as well as Celebration Japan and Celebration Europe, this is just the ticket to get your blood pumping in anticipation of Star Wars Celebration V, August 12-15 in Orlando, Florida. 

As a reminder, The Budget Geek will be there and our goal is to post daily updates from the show.  Not only will we be covering it from a geek standpoint, we will also be posting daily updates to our Celebration V budget.  Can we stick to our budget in such a hive of scum and villainy, or will we give in to the Dark Side and overspend? 

Prior to finding Dave Ramsey and getting our finances in order, we used to be blind-sided by our semi-annual auto insurance bill.  It seemed to us that we had just paid our auto insurance and here it would come again and smack us in the face.  Fortunately, we no longer have that problem because we started a sinking  fund that we contribute to weekly to cover our auto insurance bill when it comes due.  The idea of a sinking fund is to save money in regular increments to pay for a large purchase down the road.

Our chosen method for implementing our sinking funds into our budget is via online bank, ING Direct.  Our auto insurance bill is usually in the $500-600 range every 6 months.  Therefore, we have $25 per week automatically drafted from our checking account every Friday into an ING Direct Orange Savings Account that is earmarked specifically for Auto Insurance.  ING allows you to open as many accounts as you would like, so you can have multiple sinking funds going at the same time.

Other good uses for sinking funds include:

Auto Repairs - Your car is going to break.  That is an unavoidable fact of life.  You should prepare for this by saving money regularly into a sinking fund for Auto Repairs.  Just as with Auto Insurance, we have $25 per week automatically drafted from our checking account into an ING account that is earmarked specifically for Auto Repairs.  Over the years, we have used this account to pay for things like alternators, water pumps, and new tires.

Income Taxes - If you are self-employed, then you usually have a sizable income tax bill due at the end of each year (or at the end of each quarter if you pay quarterly estimates).  As mentioned in a previous article, you should withhold on yourself by saving at least 25% of the income that you take home from the business to pay your tax bill.  We use another ING account for this sinking fund.

Vacations - Typically, most people know several months in advance when and where they plan to take a vacation.  It is never too early to save for that vacation using a sinking fund.  For our August trip to Star Wars Celebration V, we booked our hotel, purchased passes to the convention, checked out the driving distance via Google Maps, studied meal options for the area surrounding the convention, and budgeted an amount for spending money at the convention.  We added everything up and came to a dollar amount that we need to save between now and August.  Then, we divided that amount by the number of weeks until the convention and came to a figure of $45 per week that needed to be saved in order to have enough money to take the trip.  As with our other sinking funds, we opened a separate ING savings account and that $45 is automatically drafted from our checking account every Friday.

Home Improvement / Repairs - We don’t have a standing sinking fund for home improvement / repairs like we do for auto repairs.  However, we have used a sinking fund approach to save up and have the interior of the house professionally painted.  Other potential uses are to replace a roof, to replace a heating and cooling system, or to have new flooring installed.

Large Purchases - Pretty much any large purchase can be saved for via the sinking fund method.  We used a sinking fund to purchase two cars, a new computer, and an HDTV over the past year.

If you are interested in opening an ING Direct savings or checking account, use the Contact Me button to the right to send me an email, and I will send you an ING Direct referral link that will earn you $25 when you make an initial deposit of $250 into your new ING Direct account.  As a matter of full disclosure, I will receive $10 from ING Direct if you open an account using my referral link.