Back in the discretionary budgeting post, we talked about saving for all those little expenses that pop up. Here is what I’m currently saving for:
- General savings in case of emergency, job loss, etc.
- A nice vacation
- Self funded pet insurance (see previous post)
- General repairs to the house
- Christmas Gifts
- Car replacement
I try to put some money away each month for each of these items. With Christmas coming, I want to make sure that my Christmas savings is where I want it to be. Therefore, I might be putting less in the car replacement or general house repairs account.
It’s not necessary to have seperate accounts for each thing you are saving for. You can keep a sheet of paper to keep your savings allocated. Some companies, like ING direct, make it easier to open multiple savings accounts, link them all together and even make automatic deposits to your savings accounts each time you get paid. I personally like internet banks, like ING direct and HSBC direct, for savings. First, they all pay well above what my bank is paying on a savings account, but they are still FDIC insured. Second, I can’t run to an ATM to access the money if I want a new something on a whim. Plus, the balance doesn’t show up when I check internet banking for my checking account so I don’t see the balance everyday and think about the things I could spend it on. It’s like my retirement accounts; sometimes, I forget the money is there.
Once you make your budget and you’ve set up how much will go into your savings each time you get paid, make that the first thing you do, not the last. If you put your leftover money in savings, you will be sure there is little or no money leftover. If you save first, you’ll always make your savings goals for the month. Set up automatic transfers from your checking to your savings so that each time your paycheck is direct deposited, the following day, your transfer will take place. This way you are guarenteed success!
So, what are you saving for?