No one can predict the future, but having goals and saving for the future is one way you can hedge against the unknowns you will certainly encounter in life.
Christy and I haven’t always been good about saving. Being disciplined enough to not live paycheck to paycheck takes a conscious decision and practice. Is it fun? Not particularly. At least not at the beginning, when your balances are low. It does bring peace of mind, though, when you know where you are heading and that you are prepared for many of the roadblocks that life will send your way.
As Christy wrote previously, we fell off the savings wagon a little bit, but we are getting back to it. We are back to saving $500 a month into our savings and $200 a month towards our vacation fund.
This Saturday we went to the bank and opened 2 new savings accounts. We have a ridiculous amount of savings accounts. We don’t write out a monthly budget, but in a way we do budget with all of our accounts through the magic of automated transfers.
In addition to our savings we have the kids college savings, the savings from chores for the oldest two and our Home and Auto account to pay for property taxes, home insurance, and auto insurance. Our 2 latest additions are for vacation and an emergency fund.
In 2008 when I thought the sky was falling, we pulled cash out of the bank to pay for emergencies so that the cash was completely liquid and we didn’t have to worry about getting to the bank to withdraw it. Recently, we made the decision that we probably wouldn’t need it that readily available until our kids were old enough to need bail posted, so we decided to put it in an account and start saving towards a 6 month net pay emergency fund in case we ever fell on hard times due to a loss of income.
With the addition of these new accounts, we decided to document our savings journey in hopes that it might inspire someone else to tighten their belt and start saving for their future.
Savings
Our primary savings is for anything really. Right now we are saving up to redo our kitchen this fall. We originally wanted to gut it and get everything new, but with the drastic change in my compensation less than a year after I went to salary, that isn’t really an option anymore. At least not in the near future. So we are scaling back on that remodel and trying to make it more affordable, unfortunately.
We are currently a little above $34,000, which is pretty good considering that is one of the accounts that we took down to $1,001 last summer when we paid off our mortgage. A good portion of that was from bonuses before those went bye bye. Now that we are contributing $500 a month again (and whatever else we can scrounge up) we will continue to keep that account at a healthy amount.
This account is also to cash flow little emergencies life throws our way, like car repairs, a new roof, HVAC repairs, etc.
Vacation
Our interest at our bank is dismal, but it’s actually better than most in our area. Christy wanted to open a basic savings account with a $100 minimum at a .1% APR because she didn’t want to have $1000 tied up in an account just to avoid charges, but we ended up opening the same as all of our others with a $1000 minimum at .5% APR.
I remember when I was younger and the banks offered full percentages. Those were the days. We took $1000 of what used to be our emergency fund we kept in cash to open that and added the $910 Christy made from selling stuff from our crawl space on Facebook.
Emergency fund
We used the rest of our back up money to open up an emergency fund. We should have deposited $7000, but when I withdrew the money a decade or so ago, they gave it to me in wrapped bundles of $1000.
I know that I counted each one to make sure it was correct, but I guess I just counted the bills and didn’t look at each denomination. In one of the wraps there was a $20 bill instead of a $100, so we got jipped by our old bank all those years ago and we didn’t even know it.
Aside from being pissed that we were shorted $80 and couldn’t do anything about it, it was pretty embarrassing being called out on it. The teller may not have thought anything about it, but I’m paranoid and was afraid they would think I was trying to pull one over on them. She probably didn’t. Who would try to scam $80 when they are depositing $8,000…or what they thought was $8,000 (emergency and vacation combined). In the end, we only deposited $6,920 into our emergency fund, but since Christy hates uneven numbers, she transferred the $80 we were short from checking to even it out.
Our goal is to raise it to a true emergency fund of $30,000. To do that, we are going to commit to tightening our belt further and transfer $300 each check until we get there.
Until then we have our normal savings to back us up if a true emergency happens. Once we meet our goal, what we call an emergency will only be a loss of income. Any other issues that come up will need to be handled out of our normal savings.
So here is where we stand at this inaugural post on saving for the future.
| Savings | $34,751 |
| Vacation | $2,010 |
| Emergency Fund | $7,300 |
Start today. Talk to your spouse, if you are married, figure out where you want to be in life, and start working toward your goals.