Now we have made other strides since then, though still not easy. Of course, as debt drops, meeting that 25% of actual gross income to go to countable savings will get easier and easier to meet. As such, so will meeting our daily residual improvement amount goal become easier. Ideally, I have plans to be totally out of debt by 2018, but will that happen, not entirely sure. More than likely, yes, but you just never know with regards to inflation vs pay increases as real pay increases (taking into account benefit levels as how the value of such benefits has either costed a lot more or the value of such benefits really dropped or some combination of both) has NOT kept up with the rate of inflation. As such, I was forced to look for other sources of income and that’s when I turned to investments via Scottrade (coincidentally what’s referred to in this article).

For me, I lump all 3 into one. As for the Home, Auto and other long-term assets, I use depreciation schedules to determine what needs to be put into the emergency fund. However, the emergency fund is not just some saving account or money market account with very low interest rate. I will keep a small amount in a such account just for those times when a small amount that I had potentially forgotten about or didn’t catch in time is going to be covered by that small cushion, but that’s about all I keep in a such account along with what’s planed for the current rolling one year out as shown via the cash flow management worksheet. Anything beyond that goes to an investment account as for the 3 funds you mentioned among what you would have created as a 4th fund, other long-term assets fund.

As for college vs retirement, I’m in the camp to fund retirement before funding college cause no one else is going to pay for your retirement vs with college, there are certainly other things out there for it. Ideally, you stress and get your kids to do very well in school (get into and stay in the top 10% academically), so as they can get academic scholarships. I don’t know about the private school sector, but it’s not that hard to do within the public schools as most students don’t put forth the effort needed. For me, I did graduate in the top 10% of my high school class (10th out of 115 students) and got a partial academic scholarship. The only reason why I didn’t get the full ride, I needed a minimal score of 28 on my ACT out of a possible of 31, which I got 25 on the ACT. But then it was in English and History that hit me hard on it, but then my LD was primarily in language. Hecks, for that matter, 6 of my 25 credits (yes, I had one extra credit my senior year as compared to most students given I took that one extra course) were in Accounting and Computers at a vocational high school, which the accounting stuff were equivalent to the sophomore level of undergrad college Accounting. The only difference, it was taught from the bookkeeping point of view instead of from the financial statement point of view, but otherwise, the course materials were no different. How do I know this, I was forced to retake it again in college as they didn’t accept it from high school and other than it was from a different perspective, none of the 3 college accounting courses in the sophomore year taught me anything new as I already knew all of those items inside out from when I had it in high school.

I can’t argue with you. (Notice I didn’t specify an amount for the emergency fund.) Many people just feel more comfortable knowing they have money at their finger tips, and that psychological benefit is worth the financial sacrifice. Also, in the case of job loss you may lose access to credit, so if that is a possibility the emergency fund does have real value. But if you are confident your ability to access credit will remain in a situation where you need it, and if you don’t need money in the bank for peace of mind, than a minimal or even zero emergency fund would be fine.