Comments on: Savings accounts need a specific purpose

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Mon, 30 Jun 2008 14:01:16 +0000

[...] Savings accounts need a specific purpose [...]

By: Megan

Megan — Thu, 26 Jun 2008 17:37:42 +0000

I think I interpreted the original post differently.

If I buy something originally priced at $100 for $25, did I save $75? No. I spent $25.

Whether or not I saved anything depends on what I intended to do. Did I go to the store intending to spend $100 on that item? If yes, then I saved $75. If I went, thinking it was on sale for $50, because I would never spend $100 on it, then I only saved $25. If I bought it because it was a bargain, and I wouldn’t have bought it for anything more, then I didn’t actually “save” anything.

By: SavingDiva

SavingDiva — Thu, 26 Jun 2008 14:18:21 +0000

I also have to set aside different amounts of money for things...if I had one huge pool, I would probably think that I have a lot more money to spend on clothes or travel...I even have multiple checking accounts! :) SavingDiva's last blog post..What?!

By: Lisa

Lisa — Thu, 26 Jun 2008 12:54:39 +0000

I am getting everything ready to open accounts for my “savings payday” [i.e. the paycheck with no house payment] I like the idea of sub-accounts and naming accounts for a specific purpose–great help visualizing what I’m doing. It’s kind of “reverse Dave Ramsey”–instead of putting money into the “envelope” to spend, you’re putting it in to save [and possibly spend later for a car, new heat pump, braces or whatever.]

Lisa’s last blog post..What I’ve been reading

By: Shevy

Shevy — Thu, 26 Jun 2008 02:45:18 +0000

I just recently added a Vacation Pay sub-account to my ING Direct and formally named my first account as an Emergency fund. I added the Vacation one because I got paid all my 2008 Vacation in a lump sum (even though I'm only taking 3 days of vacation out of 15 available, starting tomorrow). This way the money earns interest until I need it and I can put a per diem amount back into my chequing account as I use my vacation days. And I *used* to save monthly for my car insurance and pay it annually but haven't done that since I remarried. Hubby pays it monthly, which means there is an associated cost. But we don't have the $1,500 or so just hanging around to pay upfront. Kacie, your suggestion to set aside an amount monthly (even if it's less than a full monthly payment) is a good idea. We should try it. Shevy's last blog post..Burning the Candle at Both Ends

By: lulugal11

lulugal11 — Thu, 26 Jun 2008 02:09:21 +0000

Hi Kacie,
I guess I was not clear enough so I was misinterpreted. I do have sub accounts for different savings like emergency fund etc.

I was just referring to the fact that if something was $100 and then went on sale for $75 I would not have to do anything to the $25 difference because it is already in a savings account and earning interest because I would pay for it using my cash back card and then pay $75 to the card to cover the payment.

Your analogy was saying that you have to physically move the ’savings’ over to an account and I was just saying that it sounds like you are assuming that everyone keeps money in a non interest bearing checking account, but that does not apply to those who already keep their money in savings.

Glad to see that this topic is generating interest though. :-)

BTW Keep on with the CVS posts…..you are the reason I started shopping there! You explained it really well.

lulugal11’s last blog post..Mother In The Hospital: June 25

By: Kacie

Kacie — Thu, 26 Jun 2008 01:19:43 +0000

@ Vanessa– It can be a challenge to pay that very first car insurance premium in full.

But when you do it once, then you just have to pay yourself monthly and it’s a piece of cake.

To get to that point, maybe you can put aside a set amount per month to go toward paying the policy in full. It might take awhile, but eventually you’ll save a bit of money.

By: Vanessa

Vanessa — Thu, 26 Jun 2008 01:02:09 +0000

Kacie, I am exactly like you. I need to have certain goals for each amount I save and I need to have each amount seperate. It is easier for me to keep track of, to know exactly what is what, and what I can touch if need be and what is a no go. This is exactly how I plan to go about savings and hopefully, we as well will be able to have accounts for Holidays/Birthdays, Christmas, House Down Payments, ect.

I also think that is an awesome idea for your car insurance premium, I never thought of doing that. We pay month to month, which is the long run we lose a lot of money doing that. We just never have the full amount to put down when it’s time to do insurance again.

By: Mrs. Micah

Mrs. Micah — Wed, 25 Jun 2008 22:17:19 +0000

I’m more of a hide-the-savings-account girl. I should really get on top of my ING subaccounts to make them useful. And ignore what’s not in the subaccounts.

By: MrsMoney

MrsMoney — Wed, 25 Jun 2008 22:15:21 +0000

I'm the same way as you- I need to see where the money is broken down into. I have thought about creating a spreadsheet to track the different "funds" but I think it's easier just to have different accounts. For example, I have my emergency fund and then a hardwood floor fund. Now I won't touch the emergency fund for hardwood floors! :) MrsMoney's last blog post..Pinecone Research Changing Their Payouts for “Grandfathered” Panelists