What is a freedom account?
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What is a freedom account?
| Thu, 09-16-2004 - 1:54pm |
What is a freedom account? I am new to this board and in some of the posts I've read people mention a freedom account. Is that different from emergency savings?
Thanks,
Joy

Julie
The concept comes from Mary Hunt's "Debt-Proof Living" that is a recommended read around here from what I can tell. I just got a copy but haven't had a minute to sit and read it. But basically, from what I understand, the point of the freedom acount is to put money into it towards unanticipated and regular expenses that aren't monthly. IE: If you have property taxes to pay quarterly, divide the amount up and put that amount in monthly towards it so that when it's due, you're taking it out of the freedom account rather than having to suddenly come up with that money every third month. Or you know you're going to need about $200 this fall for new winter coats for the kids. Break that cost up and pay it into the freedom account every month so that when it's time, you're taking it from the freedom account rather than suddenly needing it.
The way I look at it is "Bank Of Beth Line of 'Credit' " I'm crediting my own account for the things that aren't regular monthly expenses so that I don't suddenly have to come up with it and not be able to pay a necessary cost ie: delay the phone bill because the van needed a new starter or something like that! I've budgeted x amount of money every month to go into the freedom account in case of vehicle repairs, kids' clothing needs, school field trips and other things like that.
Someone else might be able to give a better explanation..I hope I haven't confused you too much!!
Thanks for all the great information and overwhelming support on this board!
Joy