Easy savings method...

jamie_mtJuly 14, 2003

Just thought someone out there might appreciate this tip. My fiance and I recently decided to each start saving half of what we'd like our house payment to be when we get our house. It will be a bit more than $600 for each of us (total around $1300 per month), and my "savings" will consist of $120 because I currently have a house payment (so my half of our projected payment minus my current payment is $120).

Anyways, I have a really hard time saving money in my current account, because it's attached to my checking account, and very easy to transfer funds between the two online or via telephone. So last Friday, I went to a completely different bank, all the way on the other end of town, and got a new savings account. No card, no online access, no nothing - the only way I can use it is to go to the bank (which is out of the way). I have my paycheck automatically deposited into my checking account right now, so I'm going to change it so that the $120 gets deposited into that new savings account right from my paycheck. That way, the only money I'll see in the checking account will be minus that savings, and the savings will be a huge hassle to get ahold of, requiring a special trip.

I'm sure it wouldn't work for everyone, but for me, the hassle in getting to the money will help me with self-discipline, simply because it will really make me think before acting. Maybe this should be in household finances since it isn't really about shopping or buying (or not buying) things, but I thought it might appy here as well. :-)

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I think this is a very smart idea. Many homebuyers are not prepared for the change in their lifestyle (i.e. money to spend) that it entails.

I might suggest you throw in a little extra to see what it will really be like. An older house will invariably have things that need to be fixed (water heater, windows, etc..) and a newer house needs improvements (shelves, hooks for hanging things, etc.) that you will spend money on.

Good luck!

    Bookmark   July 14, 2003 at 7:05PM
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Funny you should mention that idea...I've seen a neighborhood credit union & have been thinking of a savings acct. w/no atm card, checking, etc...just to stash $$ into, I'm also not into the "hassle" & I know I'll leave it alone that way, lol.

Azarae D.

    Bookmark   July 14, 2003 at 8:33PM
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Jamie -
That's a good idea. Out of reach makes it good for emergencies.

When I was married, I started having a set amount from my paycheck sent to checking for living expenses with the "surplus" going to a savings account. DH did the same with his pay. What with raises and promotions, and keeping the same cheapskate lifestyle for several years, we had more than enough for a down payment on a house.

    Bookmark   July 15, 2003 at 9:48AM
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I actually have a house now, so my "extra" goes into the house I have as far as fixing things in order to get ready to sell it when we get married (we will be getting a new house - putting a modular on a foundation). But I do plan on putting any extra I have leftover at the end of each month in that account as well - if I can remember to take it to the bank! LOL

I do agree though - for those who have never owned before, putting extra aside for all the stuff you will need on top of the house payment is very, very smart. :-)

    Bookmark   July 15, 2003 at 10:56AM
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I agree also, we had a bit put aside for when we moved into our home...and the worst came, we had to evict the lady who we bought the home from, for some reason she would NOT move out after closing!

It sucked all our savings to keep our U-Haul for an extra week & rent hotel rooms, etc... as we had it planned to the day on moving out of our rental apt...it was(still is to think of) a nightmare.

Definitely pack away more than "extra" for buying that home...

Azarae D.

    Bookmark   July 15, 2003 at 2:18PM
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This is a wonderful idea. I have one account that is my own apart from the family ones ....it isn't a huge amount by any means but is totally mine and I feel like a millionaire having something of my own apart from the family finances.

    Bookmark   July 17, 2003 at 8:03PM
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I have our short-term savings in a credit union from my last job. When I worked there, I could go to the ATM in the lobby. Now that I work at a different company, I'd have to drive 15 miles, so it's really inconvienent and that works GREAT for us! I do have online access to it and an ATM, but I leave the ATM card at home and only get it out to make deposits. Speaking of deposits, any checks we get - birthdays, refunds, rebates, etc...I put in savings. I've only budegeted for my paycheck, so they don't need to go into checking!

    Bookmark   July 18, 2003 at 10:18AM
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I cringe whenever I read "fiance", no matter where it is printed.. newspapers, forums, whatever. Do you have a set date for the wedding?

If so, I'd like to send you a wedding gift. email me at clamshell@hotmail.com

    Bookmark   July 20, 2003 at 2:30AM
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Oops.. forgot to tell you to specify ThatHomeSite as the subject. If not, I'll just delete it.

    Bookmark   July 20, 2003 at 4:14AM
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I deposit all checks into savings, too--esp. the childcare FSA reimbursement, and the medical reimbursement.

    Bookmark   July 22, 2003 at 5:24PM
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There is nothing like an automatic deduction that is funnelled into your savings account! And wise are you to limit your access to that account if you lack the discipline to leave it alone; GOOD FOR YOU. That's a hard thing to do, initially.

This is the first time I've ever had access to a tax-deferred retirement account and I've calculated the percent increase in my earnings and directed every one to that account. I save money and reduce my taxable gross at the same time. I am stunned and how EASY it is to save and that's coming from someone who has saved money from every paycheck she's earned... .

Be patient, be frugal in your lifestyle (live BELOW your means) and you'll be AMAZED how fast the shekels add up.

    Bookmark   July 26, 2003 at 6:20PM
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Jaime_MT, I too keep my savings account at a separate bank although my fixer upper sure does swallow a lot of money I'd like to put there. One tip from one of the Suze Orman broadcasts-make yourself a "maintenance account" to contribute to as well as you are saving, this way you won't be tempted to go to the absolute limit on the mortgage payment and then not be able to handle household emergencies, and/or basic maintainence which if put off can cost big bucks. Hadn't thought about that myself. Good luck with your savings, don't forget to have some fun, maybe a potluck/swap with your friends, game night, etc.

    Bookmark   August 11, 2003 at 3:29PM
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No worries, Cindy - I budget monthly for little "splurges"...after living for so long (my whole life, almost) on so little, I know well the value of spending on yourself occasionally so you don't feel deprived. :-)

    Bookmark   August 12, 2003 at 4:06PM
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They call that a Single Small Splurge, don't they?

Joyful (Semi-annual [more or less] Slight Splurger)

    Bookmark   August 16, 2003 at 2:00AM
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