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Save Money Organizing Your Bank Accounts Pt. 2
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If you have come across this Hub first, you can start at the beginning by going here, Save Money Organizing Your Bank Accounts. Otherwise I am picking up where I left off.
Goal Savings account: This is a savings account that you are using to save for a specific goal. This could be for a new car, a trip, a shopping spree, or anything else. There are a couple points I want to get across which makes this more than just a savings account.
- Notice that you are setting a goal. This is for something that you want. For an example through this article, I will say we are saving for a trip to Florida. Now many are thinking, well I could just put the trip on my credit card, or I have a bunch of money in my savings account, I will just take it from that. By setting a goal and having to strive towards it, you become disciplined. You will cherish what you have achieved, instead of just paying for it with credit. By separating the money from your general accounts, it again creates a goal and makes a purpose for those dollars. Lastly, you will save money on interest you earn while it is in your savings account, and by not paying interest on your credit card.
- This account will change. When you reach a goal, and achieve it, you will transfer or withdraw this money and use it. The purpose of this account is to use it. To reward yourself, and accomplish a goal. Once you spend it, start towards another goal. I am able to customize the name of my savings account, currently the name of my goal savings account is New York Trip, as we will be going there in August. To help with this, have a list of many goals you want to save for, and when one is accomplished, start the next.
So how do we get there? Simple math. Our Florida trip example will cost $3,000. Make sure you account for everything, not just part of the trip or expense, but everything. So my goal of $3,000 includes air fair, hotel, food and spending money. All you do now is take the amount and divide it by your time frame, or when you want to achieve your goal. We will say 10 months for even math. So I will need to save $300 a month to reach my goal.
If you cannot afford the amount you need to save to reach your goal in the given time frame, you will need to make some adjustments. Maybe you will drive instead of fly, or pack lunches, or go in 12 months instead of 10. The point is, have a goal, set an obtainable timeline, then set automatic transfers from your direct deposit savings account and away you go!
Another tip. Do not try to factor in interest. Let that sit in your account, and you will begin to see the money you are actually EARNING by saving for your goal.
This rounds out my skeleton structure for organizing your bank accounts. Do this, and you will save and earn money. But we are not done yet. To follow are ways you can customize this system to make it yours, and increase your saving and earning. Remember, this is your system, and your money, use my guidelines, but please make it your own.
Up next: Tips, Tricks, Do’s and Do not’s
For other resources on personal finance, visit my blog at http://www.stewardology.com/blog