Goals Meet Reality: I Nurture My Savings
As you know, I don’t use my money to acquire a vast collection of teabag holders. What do I do with it?
I basically have two types of savings: use when circumstances in the future dictate (i.e. emergency fund, retirement fund) and use when I want to (i.e. Positive Surprises).
I fund my savings automatically. Over a year ago I spent a few minutes setting up automatic transfers from my credit union’s checking account to a few ING Direct savings accounts, and amazingly, my savings have grown! I also have automatic transfers that go into my 401K and a Roth IRA.
I also put some money into a modest investment in a mutual fund from time to time, and have had CDs (certificates of deposit) in the past.
Why do I do this instead of renting a bigger apartment or eating my way through every interesting restaurant on Lake St?
Because it protects me from falling into debt.
Because it was like magic that I didn’t have to worry when my car needed new brakes; I just pulled the money out of the “Car” account I had set up. Even nicer is that car maintenance just disappeared off my mental radar for a while after the brake work, but my automatic transfers continued while my head was in the clouds. As a result, my “Car” account is almost back where it was before the brake work and I didn’t have to pay a lick of attention.
Because it’s not my low-stress personality that’s keeping me from being frantic about how nonprofits are faring as the Governor, legislature and Feds make tough money choices during the recession. I just keep popping money into my general emergency fund.
Because it’s exciting to watch my “Positive Opportunities” savings grow. That little account is different from the “buffers between me and disaster” accounts. It means that when I find a good deal on the computer I want, I can pounce. It means I can attend professional conferences that aren’t necessarily related to my job. It means guilt-free, worry-free spending on whatever worthwhile developments I want. It’s a little shot of freedom.
And of course, all of these choices relate back to what I want. I think they’re solid tactics, but they could easily be too conservative or too risky for others depending on what they’re looking for. It really all comes down to what’s important to you.