Life can get hectic and I can get lazy. I have noticed lately it has been harder to save money every month. We have had a lot of expenses come up this year. Sometimes it’s for items that eventually will happen like car maintenance, others are just spending extra money on food during the month, or buying contacts for hubby. Every month I try to stay within our allocated budget but our variable expenses like food or just another item always pop up. I have tried not to freak out too much because I know we still live very frugally, but the numbers always surprise me at the end of the month.
So, earlier this month I implemented a different strategy – automatic saving buckets. We have a Capital One 360 account which allows us to open new accounts and name them appropriately. I started doing this for our home and auto insurance and automatically deducting it from our checking account. This worked great because when it came time to pay our bi-annual bill, the money was already allocated for in the account, and I just had to transfer it over. It still hurts paying for insurance but I guess for now it’s a necessary evil.
Here’s our saving buckets so far:
– Emergency Fund – This is where we keep our emergency fund. I don’t have automatic deductions yet for this one since it’s 100% fully funded.
– Home Auto Insurance – $312 gets automatically deducted from our checking account and transferred to this savings account. It is as if we were paying the insurance company monthly, but since we are on a bi-annual plan, the money gets transferred until the bill is due.
– Vacation Fund – So I have a small amount of money getting transferred to the vacation fund. My hopes are this fund will grow so much little by little, one day we will be able to go to Europe. Hopefully before we are 30!
– Brokerage/Property Fund – At the end of this month a small amount of money will get transferred to this account. Originally, my thoughts were this fund will be for buying funds in our after tax brokerage account. But we have been talking about potentially saving up to buy property (land) somewhere down the road.
– IRAs – Money to fund our IRAs on a yearly basis will be transferred to this account on a monthly basis, making sure we have enough money to fund them.
I have also been thinking about adding another fund for Christmas and one for home improvements. I have so many projects that I want to do around the house, but they require some money of course. So far, the cost has just been floated on a monthly basis on the credit card, but it would be nice to know there’s some money already allocated separately for home improvements.