The problem with savings is that I always dip into it before I should. I never really save up for anything – I just take what is in there and spend it on an immediate need, such as a credit card payment or a little extra money for the weekend.
Well, I want to start savings for upcoming expenses that I know are coming up, and also things I want and have been lusting over. Isn’t that what money is for?
So there are three big things I see coming up and want to schedule for:
- Debt payments
- Hunter boots
- Capsule collection for Spring 2015
As mentioned in my last post, I am cutting up the cards. I want to move strictly to cash. All but one are cut at this point as I have a few items to return prior to chopping, but there will be nothing else placed on it. Therefore, I know exactly what is left of my debt. From my 100% debt starting point I shared already, I will be paying 12% of that total off each month until June. Boom, debt gone. These payments are already automated in my Bank of America bill pay section. If you do not have this feature, many credit cards will also let you schedule recurring payments. Do it – the payments are already set and you know what is going out when.
Another automated payment for each Friday, I am contributing 12.50 per week to my savings so that in 12 weeks, I will be able to purchase my original, black matte Hunter boots, right before rainy season. I am really excited about these as I have wanted to purchase them for a few years and never made a plan to purchase them without my credit card.
Capsule collection for spring 2015
This is my final, current recurring payment. For this past capsule, I purchased $375 of new items, which included 2 pairs of a bit pricey Madewell jeans that I am definitely considering investment pieces. With this $400 estimate in mind, I am contributing $80 biweekly to my savings account. By mid-March, when capsule planning and purchasing begins again, I will have $400 in savings allotted to clothing purchases. I am assuming this will be an over-estimate, so anything extra will stay in that savings account!
A final thought I want to talk about is the Zero-Based Budget method, prescribed to by my favorite, Dave Ramsey. This method states that you don’t carry a balance from paycheck to paycheck – it all goes somewhere. For me, I am dumping that into my savings account as well. If that savings account starts to really bloom, I will be placing it towards my debt, but having a buffer for emergencies or unexpected expenses is always a great idea. I have my budget sheet, and just about every day, if there is an extra dollar or two in my account, I transfer it right into my savings account to get back to $0.
Another way to do this, if you are not obsessive over your expenses like me, is Digit. It is a brand new, totally safe program that scans your accounts and sees where it can dump a few cents or dollars here and there into your savings account. It is money you wouldn’t notice, but it adds up quickly! Digit is a text-based and online service, and you can always cancel. Digit also guarantees that you will never overdraft due to their service, or Digit will pay any fees associated with the overdraft. I think this is the next big thing, and you best believe I already downloaded Digit. I’ll give a review in a few months to see if it works for me, or if I’m already too on top of my money for their algorithm to detect any extra I have, haha.
Any other methods you all use to save for purchases? I’d love more ideas. Are you hands on or hands off when it comes to monitoring your accounts?