Starting Small

Once I realized that saving money was important and I set goals, I ran into a new problem.  I didn't (at the time) have any extra money in my budget to put aside.  And then when I got "a little extra" it just didn't seem worth it.  Eventually I got over that.  Putting away $5 a month is better than nothing, and putting away $10 is better than that.  

The next hurdle was to respect those savings as savings.  Looking at an "emergency fund" with $40 in it may seem silly.  But I finally realized, I'd never have "an extra $3,000" to put in my emergency fund, so it was going to have to build.  And I'd never have $3,000 if I never got to $1,000 - and I'd never get the first $1,000 if I didn't make it to $500 etc.

My two main savings projects right now are building an emergency fund, and saving enough money to move out of my place (1st & last month's rent, moving truck, etc.)  They're both currently hovering right around $500, which isn't nearly enough, obiviously.  But thanks to automated savings, they are growing.  So with a little luck and a lot of patience, I'll get there.

What does work for me

Hooray for auto-savings transfers.

The following system may seem absurd to some people, but it works for me.

I have accounts at ING Direct. Multiple accounts. I have them labeled for different purposes: taxes, gifts, insurance, house, car, medical, hobbies. Every one of these accounts has an auto-transfer set up either monthly or bi-monthly. It's counted with the expenses on my monthly budget sheet.

Where I've always gotten to trouble in the past is not planning ahead. So when anything not on my monthly budget sheet came up, I'd be screwed.

So I tried to put the money for all those different things in my savings account. But I would always screw it up - an overdraft from checking or me taking "just a few dollars" a few times. It was all a big pile and I was never sure how much was saved for any one thing.

Now when I log into my ING Direct account, I can see immediately how much I've saved for any one purpose. So it stays there. Because it's accounted for. Plus the auto-transfers mean I don't have to actually *do* anything.

Also, even though I love them, this isn't a plug for ING Direct. I use them because they let you create as many savings accounts as you want.

Hodge Podge

1) Wachovia has introduced Way 2 Save a service that automatically transfers $1 for every transaction you make to a special savings account. I signed up for it yesterday & it already has $6 in it. The only down side is that it creates a new savings account, rather than linking to your existing one - so I have to go in periodically and transfer the funds. (I don't have a goal for my Way 2 Save account, but I do for my regular savings account.)

2) I paid my property taxes yesterday. :)

3) I still have to pay my income taxes. :(

4) I'm requesting a credit limit increase on one of my cards so I can transfer and close another card.

5) I have to figure out how to rework my budget to allow more spending on food. I was a bit unrealistic in my figures.

6) We're coming to a close in tutoring season, so there's a few hundred dollars/month I won't see.