Old Versus New: Figuring Out Where I Go From Here

Here’s the absolute truth of the matter. I’m stuck. Every, single, major purchase that I have ever made, I made using credit. I’ve purchased washing machines, dryers, cars, trucks, sofas, recliners, etc. using credit. But my goal is to purchase items with cash. When setting my personal finance goals I have to keep in mind that I will not be borrowing ANY money. If I want a new car, then I have save up cash and pay for it. If I want a new dryer? I must have the cash on hand. (Granted, this is a restriction that I have placed on myself. But, I am committed to a debt free, credit free life.) Whenever I sit down to create my personal finance plan for the future, I have to keep in mind that I will always need a considerable amount of NON-EMERGENCY-FUND cash money on hand for major purchases. I’ve got to figure out where to save this money, whether I should invest it or not, and how much of it I actually need to save. Think of it as credit in reverse. I will need want to purchase 2 automobiles in the next 2 years. That means I need an additional 20K or so, on hand, available for such a purchase. In other words, if I put all of my extra cash in retirement or education accounts, then I will not have cash on-hand for major purchases. I must create budget categories for these purchases, and faithfully deposit monthly amounts into my savings, reserved for said purchases. Instead of paying a monthly payment to Ford or Citi, I’ll be paying a monthly payment to myself. While this is a GOOD “problem” to have, it’s still a “problem”. I CANNOT so aggressively fund my retirement account that I lose out on my ability to purchase major items. I must budget for these items NOW, and not wait. I know what some of you are thinking… “DUH”. I know, I know. But, I’ve spent my entire last two years with a DEFINITE goal before me, debt reduction or saving money, and I’ve not had any non-essential budget categories. NOW, I’ve got to budget for POSSIBLE purchases, not just ACTUAL purchases. I MIGHT buy a car next year, or in three years. I MIGHT need a new dryer in 2009, or in 2012. Who knows? But, I’ve got to budget for these items. I am thinking about creating a huge cash “slush-fund” for all major purchases (non-monthly or reoccurring expenses) where I just stash as much cash as I can. I’ll be spending the next few days figuring out how much I can “afford” to put in my retirement accounts, and how much I will need to save in my conventional savings account with ING Direct. Decisions, decisions.