Savings — How many different accounts/divisions do you have?

WordPress’s widgets are getting the best of me today. I was trying to edit my emergency fund savings total to $68, but it’s not getting saved. Gremlins in the system perhaps, but regardless (note: fixed) — I’m up a tiny bit towards the goal of $1000 for my emergency fund.

I set up a new online, high yield savings account with Amboy Direct that I plan to funnel money to once my Bank of America savings account gets past $100 (this also functions as my checking account overdraft protection — I plan to always keep $100 in that account).

How do I plan to save for the emergency fund?

  • Last week, I set up two $25 automatic deductions from my checking to my savings for the 1st and 15th of the month (pay days). I’ve also budgetted this into my monthly budget.
  • I’m enrolled in Bank of America’s Keep the Change program which rounds up all retail purchases to the nearest dollar and daily transfers the balance from the checking account to the savings account. I simply record my daily transactions rounded up in my check register so the accounts reconcile.
  • At the end of the month, I’ll also look to see if any additional funds are left over above and beyond the monthly budget to move into the savings account.
  • Miscellaneous income (like the $30 rebate from my recent monitor purchase, due in May) will also go directly into this fund.

But what about saving for other, smaller goals like Christmas and vacations?

While I want to get aggressive with my debt reduction and savings, I also have other needs to meet.

My holiday gift budget, for example, shrunk last year and I continue to trim the list and find less expensive ways to gift the people in my life, I know I will be spending several hundred dollars throughout November and December. Also, I will likely be visiting California or taking another vacation in the fall/winter.

I refuse to put any of those expenses on a credit card. But I also refuse to deprive myself completely in this arena.

Instead, I went back to my ING account I have had a while (with nothing in it) and set up two separate subaccounts — Xmas 2007 and Vacation 2007. I seeded the Xmas fund with $25 and the Vacation fund with $10. I plan to budget that amount every month, as well.

While my debt may go down just a bit less and my emergency savings fund may grow just a bit slower — I feel good about taking these steps to make sure that all of my bases are covered.

Any tips from my readers how you budget for these kinds of savings?


  1. Congrats on increasing your emergency fund!!

  2. fey

    Its good you are saving for your emergency fund. But unless your credit card debt is on a 0% interest card, wouldn’t it be better to pay off high-interest credit cards first before starting an emergency fund?

    Example: If your savings was earning 5% APR while your credit cards are charging you 15% then that would be 10% you are loosing dollar for dollar that’s sitting in your savings account……

    For xmas have you thought of a secret santa gift exchange between the adults? I know you have lots of family members…And for the kids (mine and everyone elses) I write up a budget and decided how much money I will spend on each one. Then I start shopping in September and pick up things here and there with my spare money grocery money. By the time Thanksgiving rolls around I am done.

    We used to have a special xmas fund, but then it became the vacation fund. And now its our emergency fund. But I just took out the measly $4k that was in there and opened up my first Roth Ira with Vanguard and I feel like throwing up.

    I am a queasy investor……

    Have you thought of getting a house mate and using the money to pay down your credit card debt. And once that is wiped out you could kick them out (if they were a pain and unlovable) or if they turned out to be cool you could then start socking away all that extra dough twoards your next financial goal……..

    so if you rented a room at $200/month it would take you 7.5 years to pay down your credit card debt assuming it is not collecting interest….rent it for more?? Rent out 2 rooms? I have a friend who did this. He always had house mates till he married.

    Food for thought.

    Theres always getting a second job :p yuck

  1. 1 In response to a few comments... « Debt Free For Life

    […] 9:29 am | In Savings | My good friend, Fey, posed a few questions and ideas in her comment on my previous post about saving for an emergency fund that I wanted to highlight and talk through a little of my decision-making process on this. […]

  2. 2 Emergency Fund -- Backbone of Personal Finance? « finance psychology

    […] I think the key is that this emergency buffer is part of the debt-reduction strategy. This post at Debt Free Forever helped me to make sense of the […]

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