Until recently my savings plan was very simple. I had opened a CD a couple years ago when I found that we had some extra cash. We also had one savings account that we would fund with any extra money we wanted to (ideally we try to pay ourselves 10% of our monthly net income, not always possible but it is a goal). This method worked well for us until a couple years ago when we bought our first home and recently when we bought our first car resulting in our first car payment (we had a car before this but it was given to us, thus no car payment.)
On our way home from vacation a couple weeks ago we decided we needed to revamp our savings plan. Having one account that held all of our savings wasn't working for us anymore. We were talking about future plans. We want to be able to fly home for Christmas, and we want to go on a cruise next year. I would love new kitchen counter tops and what about those pesky bills that come up every six months like car insurance? We decided that one savings account wasn't working for us anymore. Plus that one savings account was supposed to be our emergency fund that we shouldn't really touch anyways.
The plan we came up with was simple: we would start multiple savings accounts with different purposes. As soon as we got out of the car I ran downstairs to the computer and quickly logged into my bank. I set up three more savings accounts. One for vacations, one for those pesky bills and one for home improvement. Now this does seem a little overwhelming. All of the sudden I have four savings accounts that need to be growing! I decided that instead of feeling pressure and overwhelmed I can only do what I can do. This means that I won't be throwing hundreds of dollars into each account every month because we don't have that kind of money. Instead this month I will start by putting $20 in each account and see how that goes. If it goes well and I think I can contribute more and still stay safely afloat every month and avoid debt *side note: your savings program should not at all force you to have to use a credit card to pay for things unless you can immediately pay that credit card off* I will add more next month. If you have the financial resources to throw more money into each account every month than consider yourself blessed and please do it. I realize this will be a slow start for these accounts, but something is better than nothing. Plus I hope for my husband to get yearly raises and such that will eventually increase the amount of money we will be able to throw into these accounts. By starting slowly we won't get overwhelmed and we won't over spend. If there is a month when it is impossible to contribute anything into savings it is ok. We will start over the next month and will contribute what we can. Even if you are only able to start our with a couple dollars at a time do it! Put those couple dollars in an interest bearing savings account and let them work for you. I am sure there are several accounts that when friends refer you to that bank you get money and so do they. That would be a great way to get a couple extra bucks in your account. I know that ING Direct does this. Ask your friends and see if you are able to get any referral bonus as your start your savings plan.
Summary: Figure out the things you need to be saving for, as well as having an emergency fund. Start those accounts and begin your savings plan. If you have to start small that is fine! Don't get overwhelmed. This is fun, and in the long run will reduce stress as you find you have the money to buy what you want to buy or pay that pesky bill that just came up! Saving money is fun and empowering! *Having money in a savings account is also VITAL. This means that it will be ok for you to sacrifice a couple of the extras you are used to getting every month. Only go out to dinner once a month instead of every week, cancel or put on hold your movie rental subscription, make a grocery list and budget so you don't throw a bunch of extra stuff into your cart at the store. By making little sacrifices it will help your savings accounts grow much more fast and you will feel satisfaction in being able to have some self control to make a better future for yourself and your family.*
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