Simple Savings Plans

[lessisbest]

It will be 2015 before we know it, and now is a good time to consider some savings plans if you don't already have one that works for you. We currently live off 1/3 of our income and give/save/invest the rest, but I also have incorporated a couple little saving methods that might work for others to fund a vacation, Christmas, emergency fund, etc.

We fund a little savings account we call the "Emergency/Christmas Savings Account" by saving our $1 bills and depositing them once a month. We always save at least $500, and as much as $1,000 using this method. Naturally, it works best if you are a ca$h person, which we are. Along with the $1 bills I budget $20/month for a hair cut, but I cut my own hair so I put that money into the fund and that adds another $240 each year. We also add any "found" money to this account, which includes rebates, recycled metal, etc. At the end of the year we leave $100 in the account and distribute the remaining amount for Christmas giving to organizations we like to help support. When we first started this account when we were young and just getting started, it was used to pay for Christmas or an emergency, like a water heater going out.

Another method I ran across last year is called the 52 Week Savings Challenge. You can find printable charts on-line to follow. I just tuck the money each week into my desk calendar from my "walking around" money, and then deposit it once a month. The first week of the year you save $1, week two $2, etc., until at the end of 52 weeks you should have $1,378.

Does anyone else have a savings method to share....

[iris lilies]

I like that method, OP! That's another way to show how those $1 bills mount up. Whether outgoing for lattes or incoming for Christmas fund, they DO add up.

[pinkytoe]

What has worked for me is to set up automatic savings accounts at online banks like Ally. I have several categories - vacation, replacement car, etc. I never miss the money because it happens automatically but am always surprised to see how the balances have grown. Also, whenever I sell a household item on craigslist or cash a gift check, I put the money in a tucked away envelope so that I have cash when needed which is rare these days.

[Spartana]

I only have one category of savings now that I'm retired. Just have the pension check go into a saving account (money market account in this case) and then transfer the fixed amount I generally need each month to cover bills and normal living expenses to my checking account (yes I still pay my few bill (3) with check and also use cash for most purchases) and the rest says in savings to grow and use as needed. I also put any left over cash I didn't use in any given month back into savings. Tthat includes money I ALMOST was going to spend but talked myself out of spending it. "Spartana you really don't need that sweater or that latte or that fancy weekend away so put that money in saving instead for something you REALLY want down the road".

[kib]

Oh Spartana, that is my dream situation! I hate how complicated finances for 2 with several income streams is, especially with the extra nonsense thrown in ("but if I buy this with credit card x, I'll save 5%. And if I buy that with credit card y, I'll save 2%. And if I use a coupon that's 2 for 1, my cost per ounce is cut in half" and blah blah blah til I have to ask myself how much a mental breakdown costs.) Part of my fantasy finance picks is that I have a fixed but more than adequate income from a reliable source(s) I don't have to fiddle with, like T Bonds, an MMA for the income to go into, and a checking account to pay out from. Done Already!

[SteveinMN]

A variation on this is to save every day's leftover change (except for car-wash quarters and my ALDI quarter) until the container is full and then take it to the bank. For us, that usually adds up to $40-60 per "fill". Save the money or make that your budget for splurges. We probably empty the container twice a year. Once that money is gone, the lattes and used CDs and other little splurges are done with. Self-limiting.

Another thing we do is to take unexpected-income checks (like the class-action reimbursements I mentioned in Frugals) and kind of forget they're there. We can set up a number of savings accounts with our credit union, so we can have one that's nothing but that "found money" type of income.

[CathyA]

Good ideas Lessisbest!
When I first got my own washer and dryer........MANY years ago, I would "pay" for each load, like I was at the laundromat. I quit doing that, unfortunately....but for awhile, it was a good thing.
I haven't earned money for about 28 years. But between DH and I, I have been the one that has saved. And getting it out of that checking account, ASAP has worked for me. Unfortunately, some months I have to take it back to pay bills.
Every little bit counts, so I try to put a little something in our varoius savings/CD accounts fairly often.
My credit union has probably given me over $1,000 in the past couple of years, just as reward points on my VISA. (which we pay off every month).

[Miss Cellane]

I do the spare change thing.

Other things I've done--deposit my pay check and immediately move a certain amount of money into the savings account. The amount varied depending on how much I was making at the time and how often I was paid--$25, $50, $100.

Or I'd deposit my check. Let's say it was for $847.50. I'd put the $47.50 immediately into savings. I did that when I was paid weekly and it was surprising how little it affected my spending and how quickly the money added up.

Even when I was unemployed and temping, I put $5 from every weekly paycheck into my savings account, just to be able to know that I had something, anything, saved.

[merince]

I use rewards card for regular transactions like the phone bill, the insurance, etc. The rewards are the "Christmas fund".

[Blackdog Lin]

Good ideas all - some for me to think about.

I treat all our savings categories as bills. Just like the utility bills, they HAVE to be paid every month. We have only the Freedom Fund (those bigger annual expenses like homeowners and auto insurance, and property taxes); and the Vacation/travel Fund; the Emergency Fund; and the Retirement IRA. I have a set minimum amount that MUST go into them every month, then I add to that amount if the finances allow. And if we need to use monies from the Emergency Fund, I treat that just like a loan from the bank - I make myself pay it back with a minimum amount each month till it's paid back, even if we have to eat beans and rice and forego eating out and new clothes for awhile.

[catherine]

When DH and I are doing the cash envelope thing (which is a great system, but I go in and out of it because it does take a little work and organization), we each have our own budgeted discretionary money, which we can spend any way we want. (Dave Ramsey calls this "blow money" but I'm old enough to feel queazy using this term around people who don't know me).

So I have my weekly allotment in my envelope. At the end of the week, whatever I haven't spent doesn't get rolled over to the next week--it gets taken out and put into a little bank in my sock drawer.

It really works. I find myself during the week holding back on small purchases because I'm trying to maximize the few bucks that might wind up in my sock drawer fund.

[Spartana]

Oh Spartana, that is my dream situation! I hate how complicated finances for 2 with several income streams is, especially with the extra nonsense thrown in ("but if I buy this with credit card x, I'll save 5%. And if I buy that with credit card y, I'll save 2%. And if I use a coupon that's 2 for 1, my cost per ounce is cut in half" and blah blah blah til I have to ask myself how much a mental breakdown costs.) Part of my fantasy finance picks is that I have a fixed but more than adequate income from a reliable source(s) I don't have to fiddle with, like T Bonds, an MMA for the income to go into, and a checking account to pay out from. Done Already!Yep it's the lazy girls way of doing finances :-)! Simple living for me is all about ease. I don't want a lot of complications and complicated ways of doing things to deal with. So this is easiest for me and it also is sort of self-imposed savings since I only take out the amount I am willing to spend each month and put it into my checking account and live on that amount (often pretending that is all I actually have and trying to live within that "means" even if I have a fat stash to draw from if needed/wanted). I also do a modified envelope system - a lazy girls system - that is basically one envelope that has cash in in for the months spending. I don't do separate envelopes or budgets or track any longer, just put the amount of cash I am willing to spend each month into an envelope and draw from that as needed for spending. I usually never over-spend on things so often have some cash left in the envelope at the end of the month.

[awakenedsoul]

I work backwards, too. I withdraw $1,000. each month from my savings and put it into my checking account. I try not to spend more than that. I almost always need more, but it keeps me on track. (I generally end up spending an average of $1,500. each month.) Most of the extra money goes to property taxes, home insurance, home repairs, and that sort of thing. Now that I'm car free, I may be able to spend closer to $17,000. a year. We'll see. Having a boyfriend who can fix anything in the house is helping me greatly, too. Last year I spent a ton of money on repairs. I also bought a high end fridge and a new water heater. Those two purchases put me over my yearly budget by a few thousand dollars...

[Tussiemussies]

We have started the 52 week savings plan but are doubling the amount every week. It is working out great and this time next year I shoukd be able to buy new furniture whuch we really need! I am so glad I saw this plan online!

[sylvia]

I am a super saver but unfortunately whatever I save gets spent since there is always an emergency and I hate credit cards. Do I guess you can say that emergency fund is there to keep me afloat. I did develop excellent credit 830 and we bought a second home. This was our best investment foreclosure priced our renter flipped it for us by beautifying the home creating instant equity. Hope all these current sacrificed will pay off into retirement.